Stock Market Crash: Rs 7 lakh crore wiped out in 7 hours; Sensex falls 1,124 points | DNA Explained

The Sensex plunged 1,124 points as investors lost around ₹7 lakh crore in seven hours, amid rising crude oil prices, foreign fund outflows and continued US-Iran tensions.

The Indian stock market witnessed a sharp decline, with investors losing around ₹7 lakh crore in wealth in just seven hours as the Sensex and Nifty fell sharply amid continued market uncertainty. The Sensex dropped 1,124 points to close at 72,772, while the Nifty also slipped below the 23,000 mark.

In today’s episode of DNA, Rahul Sinha, Managing Editor of Zee News, conducted a detailed analysis.

The Sensex has been declining for several weeks and, with Thursday's fall, closed below 73,000 for the first time in six months. The decline has come as the conflict between the US and Iran continues to affect global markets, with crude oil prices remaining elevated.

The fall in equities resulted in investors losing around ₹7.5 lakh crore. The total market capitalisation of all companies listed on the BSE, which stood at around ₹483 lakh crore at Friday's close, fell to nearly ₹475 lakh crore. The decline in investors' wealth was equivalent to around 14% of India's budget expenditure for the current year and was slightly below the country's defence budget.

Demat accounts surge

The stock market has increasingly become a preferred investment avenue for people seeking higher returns. Instead of keeping their savings in bank fixed deposits, many investors are putting money into stocks and mutual funds.

India had around 9 crore demat accounts until 2022. The number has now risen to 24 crore, marking an increase of around 166% in four years.

However, the recent market decline has raised concerns among investors. Those who have invested directly in stocks as well as through mutual funds are facing losses, particularly when they need to withdraw their money while returns remain negative.

Crude oil prices, foreign outflows weigh on market

Market experts have attributed the latest decline largely to the sharp rise in crude oil prices. International crude prices increased by around 4%, with Brent crude crossing $108. Oil prices have remained above $100 amid continuing tensions between the US and Iran.

Foreign investors are also continuing to withdraw money from Indian equities, weakening sentiment in the domestic market. Since the beginning of 2026, foreign investors have withdrawn ₹2 lakh 45 thousand crore from the Indian stock market. Although they returned to the market during July and August, selling resumed in September.

Higher returns on US bonds are another factor encouraging foreign investors to move money from India to the US.

Sensex down 15% in two years

The market's decline predates the Iran conflict. The Sensex closed at 85,572 on September 27, 2024, before falling to 80,426 on September 26, 2025. It stood at 72,772 today.

This represents a fall of 12,800 points, or around 15%, over two years. Had the market maintained its normal pace of growth during this period, the Sensex could have reached or approached the 1 lakh mark. Instead, various factors have pushed the market lower, leaving investors who have put money into stocks and mutual funds concerned.

The continuing US-Iran conflict, elevated oil prices and market uncertainty have further weighed on sentiment.

Also Read | Sensex, Nifty open lower as global headwinds weigh on sentiment

Gold, silver also decline

The decline has not been limited to equities. Gold and silver prices also fell sharply, despite traditionally being considered safe investments.

According to the India Bullion and Jewellers Association, the price of 10 grams of 24-carat gold in the bullion market fell by more than ₹4,000, bringing it below ₹1 lakh 48 thousand. Silver became cheaper by ₹9,297 per kilogram and fell to ₹2 lakh 23 thousand.

So far in September, gold has declined by around ₹8,000 and silver by ₹14,000. A similar trend has been seen in the futures market.

Gold and silver had recorded significant gains in 2025. According to bullion market data, gold prices rose by around 74% during 2025, while silver surged by more than 160%.

On January 29 this year, 24-carat gold reached a record ₹1 lakh 83 thousand per 10 grams, while silver crossed ₹4 lakh. At the time, market experts had estimated that silver could soon cross ₹10 lakh.

Since then, however, both precious metals have declined. Gold is now around 19% cheaper than its January level, while silver prices have fallen by around 45%.

With uncertainty continuing amid the US-Iran conflict, experts believe the volatility may persist as long as war-like conditions remain. Investors have therefore been advised to exercise caution while putting their hard-earned money into the stock market, gold or silver.

Also Read | Indian stock market to be impacted by crude oil, global yields, FII flows next week

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