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Stock Market Crash, 27 March 2026: Benchmark indices Nifty 50 and Sensex came under pressure on Friday, after ending higher in the previous session on Wednesday. The domestic markets were closed on the occasion of Ram Navami on Thursday.
On Friday, however, the markets continued the panic-selling spree put in motion at the start of the month as the crisis in the Middle East escalated. Notably, the oil price flirted with USD 110 again on Friday. However, a broader weakness in the market came as the rupee hit a new record low of 94.60 against the dollar amid heavy sell-offs and rising oil prices.
The Nifty 50 declined 1.53 per cent to hit an intraday low of 22,948.10 mark. Meanwhile, Sensex shed over 1,176 points as it declined 1.56 per cent to hit an intraday low of 74,097.30
Subsequently, as the rupee tumbled to a record low of 94.60 against the US dollar, breaching the 94 mark for the first time the bond market also came under strain, as the 10‑year government bond yield climbed to around 6.94 per cent, its highest level since August 2024, reflecting mounting fiscal and inflation concerns. The stress came amid to a sharp surge in crude oil prices, expectations of higher government borrowing, and persistent FII outflows, which together weighed on both the currency and domestic assets. Notably, RBI is increasingly expected to focus on managing bond‑market volatility, even as rising yields and currency weakness deepen risk aversion across equities.
Indian equity markets opened on a weak note, with most major sectoral indices trading in the red, reflecting broad‑based selling pressure. The Nifty 50 opened gap‑down at 23,173, slipping below the previous session’s low, while Nifty Bank also started lower at 53,244, breaching its prior day’s support levels. Market breadth remained firmly negative, with only 10 advances against 40 declines on the Nifty, highlighting a clear risk‑off tone in early trade.
Adding to the market weakness, both benchmark indices are now significantly off their peaks. The Nifty 50 is down 12.6 per cent from its record high, while the Sensex has corrected nearly 15.3 per cent from its all‑time high, reflecting deepening risk aversion amid geopolitical and macroeconomic uncertainty.
The rupee fell to a fresh record low of 94.60 against the dollar on Friday, pressured by a stronger US currency, weak equity markets and elevated crude oil prices. “Exporters may sell for their near term exposures maximum for April-26 while Importers may buy the dips are the the suggestions for the day,” suggested Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said.
Foreign fund outflows remain a major drag on sentiment. Persistent selling by FIIs has continued to weigh on the market, as global investors trim their exposure to Indian equities amid elevated uncertainty and risk aversion.
Data from exchanges showed foreign portfolio investors continued their heavy selling streak, pulling out Rs 1,805.37 crore from Indian equities on Feb 18, 2026, as per exchange data. FPI sell orders worth Rs 16,353.07 crore far exceeded their purchases of Rs 14,547 crore, marking a sharp net outflow that has added to the sustained pressure on the markets.
In contrast, domestic institutional investors stepped in as stabilising buyers, recording a strong net inflow of Rs 5,429.78 crore on the same day, with total purchases of Rs 22,921.89 crore against sales of Rs 17,492.11 crore. The persistent FPI withdrawal amid global uncertainty has been a key factor amplifying volatility and deepening.
The steep decline in the domestic benchmark is led by rising tension in the Middle East triggered by ongoing tension between the US, Israel, and Iran. The US and Israel launched military strikes on Iran on February 28, killing Ayatollah Ali Khamenei. Following the killing of Iran’s supreme leader, the country announced his son, Mojtaba Khamenei as his successor.
The markets came under pressure as India remains deeply exposed to Middle East risks, sourcing 52–60 per cent of its crude oil imports from the region, with nearly 40 per cent of supplies passing through the vulnerable Strait of Hormuz. Any further escalation could directly affect domestic fuel prices, inflation, currency stability and overall growth, while heightened volatility may also dampen foreign portfolio inflows and weigh on the balance of payments.
The sharp spike in crude oil prices is adding to the market’s stress. Oil has jumped amid growing fears that the ongoing conflict could disrupt global supply chains and further strain availability. For India, which depends heavily on imported crude, the surge poses clear risks, from a higher import bill to renewed upward pressure on inflation.
Notably, Brent was up 0.3 per cent at USD 107.6 a barrel, while WTI crude surged nearly 0.6 per cent to trade at USD 93.80 a barrel.
Earlier, Iran warned that oil prices could surge to USD 200 per barrel if attacks continue and exports get disrupted. Iran signaled through intermediaries that it would only consider a ceasefire if the US guarantees that neither it nor Israel would carry out future strikes, an assurance Washington is unlikely to provide. Adding to market anxiety, the strategically vital Strait of Hormuz remains effectively closed, with reports of multiple commercial vessels being hit off Iran’s coast.
On March 9, Brent crude surged over 27 per cent to trade at a multi-year high of USD 119 a barrel amid escalating Middle East tensions.
The prices later dropped significantly after the announcement of coordinated oil reserve release by major G7 economies. The oil price, although at a multi-year high, was still lower than its all-time high of USD 147 per barrel seen in July, 2008. The recent hike was also lower than USD 130 per barrel price that was hit in 2022 during the Russia-Ukraine crisis.
(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money related decisions.)
