Black Monday: Sensex Crashes 1,200 Points; Nifty Near 22,450

Indian equity markets experienced a severe downturn on Monday as the BSE Sensex plunged about 1,200 points and the NSE Nifty 50 index hovered near 22,450, wiping out significant investor wealth and triggering broad‑based selling across sectors. :contentReference[oaicite:1]{index=1}

Key Factors Behind the Decline

1. Geopolitical Tensions and Risk Appetite

Ongoing geopolitical instability — particularly the widening conflict between the US‑Israel alliance and Iran — contributed to pervasive risk‑off sentiment among investors, pushing markets sharply lower. :contentReference[oaicite:2]{index=2}

2. Surging Crude Oil Prices

Global crude oil prices surged, with Brent crude nearing the $120 per barrel mark. Higher energy costs raise inflation concerns for import‑dependent economies like India and erode corporate profit expectations. :contentReference[oaicite:3]{index=3}

3. RBI Restrictions on Forex Positions

The Reserve Bank of India tightened limits on banks’ forex positions, impacting market liquidity and adding pressure on banking and financial stocks. :contentReference[oaicite:4]{index=4}

4. Weak Global Cues

Global markets traded lower amid risk aversion, mirroring the sell‑off on Dalal Street and reinforcing negative sentiment in Indian equities. :contentReference[oaicite:5]{index=5}

5. Foreign Institutional Selling

Persistent net selling by foreign institutional investors (FIIs) exacerbated the decline as foreign money continued to flow out of Indian markets. :contentReference[oaicite:6]{index=6}

Market Impact

The broad sell‑off was not limited to select sectors — most major indices and stock groups ended in the red, reflecting a broad erosion of confidence among investors. As markets reacted to both domestic and global headwinds, market participants cited elevated volatility and caution in trading. :contentReference[oaicite:7]{index=7}

Outlook

Analysts noted that unless geopolitical tensions ease and crude prices stabilise, markets may continue to exhibit volatility. Further, easing foreign outflows and clearer policy direction from regulators could be key to restoring investor confidence in the near term. :contentReference[oaicite:8]{index=8}