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Indian equity markets witnessed a sharp sell-off across segments on Thursday; Know key reasons behind the crash
Stock Market Crash Today
Stock Market Crash: Indian equity markets witnessed a sharp sell-off across segments on Thursday, June 12, as weak global cues and profit-booking triggered a broad-based decline. Benchmark indices — the Sensex and Nifty 50 — fell nearly 1%, while broader markets followed suit with mid- and small-cap indices sliding over 1% each.
The BSE Sensex opened marginally higher at 82,571.67 but soon turned negative, plunging as much as 853 points to hit an intraday low of 81,661.68. It eventually closed deep in the red. Similarly, the Nifty 50, which opened at 25,164.45, slipped below the key 24,900 mark during the session, touching a low of 24,871.
The sharp fall wiped off substantial investor wealth. The total market capitalisation of BSE-listed companies dropped to around Rs 451 lakh crore, compared to ₹456 lakh crore in the previous session — a loss of nearly Rs 5 lakh crore in a single trading day.
Why is the Indian Stock Market Falling on June 12?
1. Escalating Geopolitical Tensions
Global markets, including India, were rattled by renewed geopolitical tensions in the Middle East. Asian and European indices fell sharply amid rising fears of a conflict between the US and Iran.
According to reports by The Times of Israel, the US is evacuating non-essential personnel from the Middle East due to heightened regional tensions and the deteriorating status of nuclear negotiations with Iran. There is growing speculation that Israeli forces may strike Iran’s nuclear facilities, adding to investor nervousness. Meanwhile, US President Donald Trump has reiterated his stance against allowing Iran to acquire nuclear weapons.
2. Uncertainty Over the US-China Trade Deal
The much-anticipated trade deal between the United States and China has failed to lift market sentiment, as investors were expecting a more comprehensive and conclusive agreement.
On Wednesday, former US President Donald Trump claimed that China would supply the US with rare-earth minerals and magnets, while the US would continue to welcome Chinese students into its universities. However, the final terms of the deal still await approval from both Trump and Chinese President Xi Jinping.
“Our deal with China is done, subject to final approval with President Xi and me,” Trump wrote on Truth Social. “We are getting a total of 55% tariffs, and China is getting 10%… The relationship is excellent!”
Despite this optimistic tone, market experts remain skeptical. “There are reports of a possible agreement between the US and China. But the Chinese haven’t officially confirmed anything,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services. “Trump is talking about a 55 percent tariff on China and a 10 percent tariff on the US. Given his track record, it’s too early to view this as a positive for markets.”
3. Global Markets Weaken Amid Risk-Off Mood
Global equities extended losses on Thursday, adding pressure to Indian markets as investors grappled with a combination of tepid U.S. inflation data, ongoing trade concerns, and heightened geopolitical tensions.
European markets were poised for a subdued start, with futures on Germany’s DAX and the UK’s FTSE 100 down 0.8% and 0.4%, respectively. U.S. equity futures also indicated a flat-to-negative open, reflecting caution on Wall Street.
Across Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan dipped 0.2%, retreating from a three-year high recorded a day earlier. Japan’s Nikkei 225 declined 0.5%, while key indices in China and Hong Kong also pulled back, reversing recent gains.
4. Dollar Slides as Fed Rate Cut Bets Rise
The U.S. dollar weakened to its lowest level in nearly two months, amid rising expectations that the Federal Reserve could initiate rate cuts later this year.
The dollar index, which tracks the greenback against a basket of major currencies, slipped to 98.246—its weakest since April 22—and was last seen at 98.419, down 0.04%. So far in 2025, the index has lost 10%.
The retreat in the dollar followed softer-than-expected U.S. inflation data and lingering doubts over the durability of the recent U.S.-China trade framework. Combined with elevated geopolitical risks, this has prompted investors to scale back exposure to the dollar.
According to Reuters, traders are now pricing in two 25-basis-point rate cuts by the end of 2025, and potentially up to 100 basis points by September 2026.
5. Oil Price Volatility Adds to Market Jitters
Crude oil prices slipped on Thursday, following a sharp rally in the previous session driven by escalating tensions in the Middle East ahead of planned U.S.-Iran negotiations.
Brent crude declined 0.7% to $69.28 per barrel after surging over 4% on Wednesday to hit a two-month high.
“The spike in Brent crude to $70 on heightened security risks is a clear negative for oil-importing countries like India,” noted Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services. “Industries such as paints, tyres, aviation, and adhesives may come under pressure, while upstream oil producers stand to benefit.”
Shares of ONGC and Oil India gained up to 5% on improved realisation expectations, whereas oil marketing companies such as IOC, BPCL, and HPCL fell between 2% and 4.5% on margin concerns. Aviation and tyre stocks also saw declines due to rising input cost pressures, with MRF, CEAT, and IndiGo among the key losers.
Aparna Deb is a Subeditor and writes for the business vertical of News18.com. She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a…Read More
Aparna Deb is a Subeditor and writes for the business vertical of News18.com. She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a… Read More
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