Market suffers worst day in 9 months as global and local sentiments weaken

Indian stock markets experienced a meltdown crashing over 3% as oil spiked to $114 a dollar and US Fed reserve signalled higher inflation on 18, March 2026. This was the worst day since June 2024, when markets crashed over 5% in a session.

This is also the fifth instance since 2021, when benchmark indices dipped lower than 3%.

Iran-Israel updates on March 19, 2026

Nifty opened at 23,197.75 and Sensex at 74,750.92 points down about 2.4% from previous close. Both the indices maintained the level before crashing to the day’s low of 22,930.35 and 73,950.95 points  before closing at 23,002.15 and 74,207.24 points. These were levels that markets were trading at in mid 2024. 

The sudden slump towards the final trading hours were due to soaring Brent crude futures price hitting a new high of $114 a barrel and the rupee depreciating to a new low of ₹92.89 a dollar.  

All the 21 sectoral indices were down with Nifty Auto down more than 4%. 

Increasing risk of inflation due to the war in West Asia led gold tumbling 3% to $4650 an ounce. “The decline was largely driven by the Federal Reserve’s hawkish stance, with any potential easing now contingent on clear signs of moderating inflation,” said Kaynat Chainwala, AVP Commodity Research, Kotak Securities

Markets witnessed the perfect storm, when Israel attacked the world’s largest gas field in Iran and the latter retaliated attacking major energy sites in the gulf region. This sent crude prices soaring to $114 a barrel.

On the global macro front, U.S. Central Bank – the Federal Reserve held interest rates steady ranging between 3.5% and 3.75% signalling higher inflation could stymie further rate cuts in 2026. But a rate hike by the U.S. Fed would make American markets more attractive for foreign funds, intensifying their current exit from the Indian market. 

“Going ahead, markets appear to be in a phase of heightened fragility, where sentiment is being driven by rapidly evolving geopolitical developments and sharp rise in crude prices. Given the intensifying tensions around energy infrastructure in West Asia, we remain cautious on the market in the near term and expect volatility to persist,” said Siddhartha Khemka, Head of Research, Wealth Management, Motilal Oswal Financial Services Ltd.

“Nifty breached its key prior swing low of 22,955, confirming bears’ return with a vengeance. Now below all major moving averages, the index faces resistance at 23,378, with support shifting to 22,500–22,700,” said Vinay Rajani, Senior Technical Research Analyst, HDFC Securities.