Mumbai, March 4: The Indian stock market suffered a major crash during opening trade today, March 4, as investors reacted to the rapidly escalating conflict between the United States, Israel, and Iran. Following a one-day closure for the Holi festival, benchmark indices reopened to a "sea of red," with the BSE Sensex plunging over 1,700 points and the NSE Nifty 50 crashing below the crucial 24,400 mark, a drop of more than 2 per cent.

The primary driver of the selloff is the intensifying military campaign in the Middle East. Markets were rattled by reports of a "third wave" of strikes and the potential closure of the Strait of Hormuz, a vital artery for global energy supplies. Stock Market Holidays March 2026: Full List and Holiday Dates.

For India, the threat of a prolonged conflict is particularly acute due to its heavy reliance on oil imports. Brent crude prices have surged toward USD 85 per barrel, stoking fears of "sticky" inflation, a widening trade deficit, and a weakened Rupee, which recently slipped past 91 per US dollar.

Stock Market Witnesses Broad-Based Selling Across Sectors

The crash was visible across nearly all sectoral indices. Heavyweights in the Banking, Auto, and Information Technology sectors led the decline:

  • Larsen & Toubro (L&T): Shares tumbled over 6 per cent in early trade.

  • Auto & IT: Stocks like Maruti Suzuki and Infosys faced heavy selling as investors pivoted away from high-beta and growth-oriented sectors.

  • Midcap & Smallcap: The broader market was not spared, with midcap and smallcap indices falling between 1.5 per cent and 2.1 per cent.

Conversely, Defense and Gold emerged as the only notable beneficiaries. Stocks like Bharat Electronics (BEL) showed resilience, while domestic gold prices hit record highs near ₹1,67,610 per 10 grams as capital sought safety.

Surge in Market Volatility

The India VIX, or the market’s "fear gauge," witnessed a dramatic spike, jumping over 25 per cent to reach levels not seen in nearly a year. This surge indicates that traders are bracing for extreme price swings in the coming sessions. Foreign Institutional Investors (FIIs) have reportedly increased their selling pace, offloading shares worth thousands of crores as part of a global "risk-off" sentiment. While Domestic Institutional Investors (DIIs) have attempted to provide a cushion through net buying, the sheer volume of global panic has overwhelmed domestic support. Stock Market Holiday Today: Are BSE and NSE Closed on March 3 for Holi?

Technical Outlook

Market analysts warn that the Nifty has broken major support levels at 24,900 and 24,600. "The immediate technical structure has turned bearish," noted a senior researcher at Religare Broking. "Unless there is a diplomatic de-escalation, the index could test the 24,000–24,200 zone in the near term."

(The above story first appeared on LatestLY on Mar 04, 2026 09:31 AM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).