Final Trade (June 13): Sensex tanks 573 pts, investors lose Rs 2 lakh crore: 5 reasons why Dalal Street tumbled

Geopolitical tensions and surging crude oil prices sent Indian markets tumbling on Friday, June 13. The benchmark indices, which crashed sharply in early trade following Israel's strikes on Iran, recovered partially by the closing bell but still ended in deep red. The selloff erased nearly Rs 2 lakh crore in investor wealth in a single session.

Benchmarks log sharp losses; Midcaps, Smallcaps outperform

The Sensex opened sharply lower at 80,427.81 and went on to hit an intraday low of 80,354.59 — a fall of over 1,300 points. It eventually settled 573.08 points, or 0.70 per cent, lower at 81,118.60. The Nifty 50 also dropped 170 points, or 0.68 per cent, to close at 24,718.60, after touching an intraday low of 24,473.

The broader markets, however, fared better. The BSE Midcap index ended 0.32 per cent lower while the Smallcap index lost 0.30 per cent, showing some relative strength despite global headwinds.

Israel-Iran conflict rattles market mood

Investor sentiment turned sour after Israel carried out targeted strikes on Iran, hitting key military and nuclear sites. The strikes, according to Israeli officials, were aimed at dismantling Iran’s nuclear infrastructure and are expected to continue for “as many days as necessary”.

“The consequences of prolonged conflict in the Middle East are economically damaging, particularly for oil-importing nations like India,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Crude oil prices surge, inflation risk returns

WTI and Brent crude prices jumped over 10 per cent on Friday as supply concerns mounted. For India, which relies on imports for nearly 85 per cent of its oil needs, this is a worrying signal.

A sustained rise in crude could dent the country’s fiscal balance, stoke inflation, and squeeze margins across sectors like aviation, paints, and logistics.

Rupee hits 86/USD, foreign outflows a threat

The Indian rupee plunged 73 paise to open at 86.25 per dollar and closed at 86.08 — its worst one-day fall in over a month. Currency weakness raises import costs, increases inflationary pressures, and may trigger fresh foreign portfolio outflows.

Flight to safety hurts equity appetite

Amid the global risk-off environment, investors fled to safe-haven assets such as gold, US Treasury bonds, and the dollar. Gold futures rose 2 per cent intraday, while US bond yields dipped on rising demand. This shift further weighed on equities across the globe, including India.

What should investors do now?

Analysts suggest a cautious, stock-specific approach for the near term. With volatility expected to remain elevated due to global developments, traders may prefer defensive sectors like FMCG, pharma, and IT. Long-term investors are advised to avoid panic selling and focus on quality names.