Explained – What led to Tuesday’s ₹12 lakh crore rout on Dalal Street

Indian equity benchmarks ended sharply lower on Tuesday, marking a third straight session of losses as a broad-based selloff across sectors dragged the Sensex down nearly 1,500 points and wiped out almost ₹12 lakh crore in investor wealth.The Sensex plunged 1,456 points to close at 74,559, while the Nifty fell 436 points to settle at 23,380, slipping below the 23,400 mark. Market breadth remained firmly negative, with 47 Nifty stocks ending in the red and the NSE advance-decline ratio standing at 1:6.

The selloff was led by IT stocks and financial heavyweights, with all sectoral indices ending lower. Nifty Defence, Realty and IT emerged as the worst-performing sectors during the session. Shares of TCS, Infosys and HCLTech hit fresh 52-week lows after concerns mounted over rising competition in AI-led technology services following OpenAI’s latest entry into the segment.
Banking and broader markets also remained under pressure. The Nifty Bank index declined 885 points to 53,555, while the Nifty Midcap index dropped 1,554 points to close at 59,705. Shriram Finance, Tech Mahindra and Adani Ports were among the top losers on the Nifty, while JSW Infrastructure, UPL, NLC India, Kalyan Jewellers and L&T Finance Holdings led declines in the midcap space.One of the key triggers behind the sharp decline was the spike in crude oil prices amid escalating tensions in West Asia. Brent crude surged past $107 per barrel, raising concerns over inflation, India’s import bill and corporate profitability. Oil marketing companies HPCL, BPCL and IOCfell up to 2%, while ONGC and Oil India rose as much as 8% after the government cut effective royalty rates on oil and gas production.

Markets also remained cautious after Prime Minister Narendra Modi’s recent remarks urging citizens to prioritise work from home, avoid international travel for a year and curb gold purchases amid the fuel crisis linked to the West Asia conflict.

Further pressure came from persistent foreign institutional investor selling, with FIIs offloading equities worth ₹8,437 crore on Monday. The rupee also weakened to a record closing low of 95.63 against the US dollar, while India VIX — the market’s fear gauge — rose 2% to 18.87, reflecting heightened volatility and investor anxiety.

Among individual stocks, Groww parent Billionbrains Garage Ventures fell 5% after shares worth ₹5,637 crore changed hands in multiple block deals, while JSW Energy tumbled over 7% following weak quarterly earnings. Dixon Technologies also declined nearly 6% ahead of its Q4 results announcement.