Indian equity markets are witnessing a sharp and broad-based correction, with benchmark indices and sectoral gauges falling steeply over the past one month amid escalating tensions in the Middle East. As a result, FIIs have sold Indian equities worth over Rs 1 lakh crore so far in the month of March.
The Nifty 50 has declined around 11.7% over the last month, slipping from its February 27 closing level of 25,178, reflecting sustained selling pressure across sectors. The Bank Nifty has also dropped 14.81%, while broader markets remain under significant stress with the Nifty Midcap 100 down 9.62% and Nifty Smallcap 100 falling 10.08% during the same period.
The sell-off has been even sharper across key sectoral indices. The Nifty Realty index has plunged 17.01%, making it one of the worst-performing sectors, followed by Nifty PSU Bank, which has fallen 15.27%. The Nifty Financial Services index is down 14.89%, while Nifty Auto has declined 13.86% over the past month.
Defensive and consumption-linked sectors have also not been spared, with Nifty FMCG falling 11.47% and Nifty IT dropping 8.34%. Meanwhile, Nifty Metal has declined 8.11%, and Nifty Pharma has shown relatively lower weakness with a 1.30% decline, indicating some resilience amid broader market stress.
Volatility has surged alongside the correction, with the India VIX rising nearly 77% over the past month to around 25.04, reflecting heightened uncertainty and risk aversion among investors.
The ongoing conflict involving the United States, Israel, and Iran has significantly impacted global markets. Crude oil prices have surged above $110 per barrel, driven by concerns over supply disruptions, particularly due to the strategic importance of the Strait of Hormuz, a key global oil transit route.
Disruptions in supply chains and rising geopolitical tensions have further weighed on investor sentiment. Adding to the uncertainty, former U.S. President Donald Trump has issued a 48-hour deadline warning, intensifying fears of further escalation in the region.
The sharp correction across indices and sectors underscores the extent of the risk-off sentiment currently gripping markets, with global developments expected to remain the key driver for equities in the near term.