Sensex, Nifty crash 3.26% in biggest fall since June 2024
BIG SHOCK. Crude above $110 & hawkish US Fed hurt sentiment; HDFC Bank leads fall Anupama Ghosh — Mumbai
In their worst single-day fall since June 2024, the BSE Sensex and the Nifty50 crashed 3.3 per cent on Thursday, weighed down by a sharp sell-off in HDFC Bank, a spike in crude prices, and the hawkish stance of the US Federal Reserve. The Sensex fell nearly 2,500 points and the Nifty tumbled over 775 points, with Shriram Finance, Eternal, and HDFC Bank leading the losses.
INDIA VIX SURGES
The volatility indicator, India VIX, surged over 21 per cent to 22.80. The sell-off, triggered by the escalating West Asia conflict that sent Brent crude surging past $110 per barrel, wiped out the gains of the past three sessions in a single day. The US Federal Reserve’s decision to hold benchmark rates steady at 3.50-3.75 per cent, while signalling a higher inflation outlook due to rising energy prices, compounded the negative sentiment.
“... The near-term outlook remains strongly bearish, and any pullback towards resistance levels is likely to be sold into unless sentiment improves materially,” said Hitesh Tailor, Technical Research Analyst at Choice Equity Broking. The Nifty opened with a gap-down of 580 points and slid further to close near a one-year low. Bank Nifty fell 3.4 per cent, and all sectoral indices closed in the red, with auto, realty, financial services, and private bank indices among the worst losers.
DII buying provided only a partial cushion. Against FPI selling of ₹7,207 crore, DIIs bought shares worth ₹3,410 crore on Thursday. Downstream oil refiners, paint companies, tyre manufacturers, and aviation stocks bore additional pain from margin-compression fears. The Nifty Midcap 100 fell 3.19 per cent and the Nifty Smallcap 100 dropped 2.94 per cent. Globally, Asian markets closed sharply lower, falling between 1 and 3.5 per cent, while equities across Europe were down in the range of 1-4 per cent.
BULLION TUMBLES
Contrary to expectations, safe-haven assets offered no refuge. Gold fell over 3.4 per cent on the Comex, breaching $4,700/oz, while silver dropped nearly 6 per cent as the Fed’s hawkish posture strengthened the dollar. Analysts stated that a clear de-escalation in West Asia is the only near-term catalyst that can arrest the downtrend, failing which the index remains biased towards further weakness.
‘Iranian attack wipes out 17% of Qatar’s LNG capacity for up to five years’
Reuters — Dubai / Doha
Iranian attacks have knocked out 17 per cent of Qatar’s LNG export capacity, causing an estimated $20 billion in lost annual revenue and threatening supplies to Europe and Asia, said QatarEnergy’s CEO.
Saad Al-Kaabi said two of Qatar’s 14 LNG trains and one of its two gas-to-liquids (GTL) facilities were damaged in the strikes. The repairs will sideline 12.8 million tonnes per year of LNG for three to five years, he said. “I never in my wildest dreams would have thought that Qatar and the region would be in such an attack, especially from a brotherly Muslim country,” said Kaabi.
Hours earlier, Iran aimed a series of attacks at Gulf oil and gas facilities after Israeli attacks on its own gas infrastructure. State-owned QatarEnergy will have to declare force majeure on long-term contracts for up to five years for LNG supplies bound for Italy, Belgium, South Korea and China due to the two damaged trains, said Kaabi.
Exit rattles mutual fund investors, concerns loom
Suresh P Iyengar — Mumbai
The top 10 fund houses have invested about ₹90,000 crore in the shares of the bank
The sudden exit of Atanu Chakraborty as Part-time Chairman of HDFC Bank has not only wiped out ₹1 lakh crore in market-cap of the bank but also sent chills across the mutual fund industry, with top fund houses having significant exposure to the stock. The top 10 mutual fund houses alone have invested about ₹90,000 crore in the shares of the country’s second largest bank.
The stock has already fallen 9 per cent so far in this month, touching a new low of ₹772 before closing at ₹800 on Thursday. The stock has seen a 15 per cent decline year-to-date. Among MF schemes, most of the Nifty Bank Index Funds and ETFs have exposure of 19.83 per cent to 19.70 per cent in HDFC Bank.
Global financial services firm Macquarie stated that while fundamentals remain strong with healthy return on assets, investor sentiment will stay pressured until the board offers greater clarity. The brokerage also warned that uncertainty around CEO Sashidhar Jagdishan’s reappointment could further weigh on the stock.
Gibin John, Senior Investment Strategist, Geojit Investments, said about 127 schemes had an exposure of over 5 per cent to the stock and any price movement in HDFC Bank will be reflected in the NAVs of these schemes. While short-term investors with high equity allocation could consider booking profit, he added that investors with a five-year horizon could stay invested.
Anuj Badjate, Managing Director, Badjate Stock & Shares, said shares of HDFC Bank had already corrected 20–25 per cent from ₹1,000 to ₹800 levels, suggesting that a significant portion of the current concerns had been reflected in valuations.
STABLE ASSET QUALITY
HDFC Bank continues to be one of the most institutionally owned and closely tracked franchises, with a historically stable asset quality profile and disciplined underwriting track record. At this stage, the development appears to be a sentiment and valuation adjustment, rather than a reflection of balance sheet stress, he added.
Earlier in the day, the Reserve Bank of India stepped in to assuage concerns and described HDFC Bank as a “domestic systemically important bank” with strong financials. The RBI said, based on its periodical assessment, there were no material concerns on record as regards to its conduct or governance.
Ravi Singh, Chief Research Officer, Master Capital Services, said while the fundamental attributes of the bank had not changed overnight, the comments from a senior official hold importance and introduce a degree of corporate governance scrutiny. Though investors holding banking sector funds or thematic financial services funds could see volatility in the NAV given the concentrated exposure, diversified funds will have a natural cushion against the blow, he added.
Market correction opens tremendous opportunity for FPIs: SEBI Member
ON THE CHART. Regulator eyes smoother access for Russian investors; pitches India listings, Gift City route Our Bureau — Mumbai
Recent corrections in Indian equities amid geopolitical tensions have made valuations “quite attractive,” creating a “tremendous opportunity” for foreign portfolio investors (FPIs) to increase allocations, said Kamlesh Chandra Varshney, Whole-Time Member, Securities and Exchange Board of India (SEBI). “There is a tremendous opportunity to invest in Indian equity markets with the kind of correction which has taken place in the last few months, particularly after the war broke out,” Varshney said at a Russia-India forum on capital market integration at the NSE.
His comments come even as FPIs have remained net sellers so far in FY26, with over ₹77,000 crore of outflows reported in the first half of March amid global volatility linked to the West Asia conflict. Varshney said the regulator would ease procedural and technical bottlenecks for Russian investors and may consider setting up dedicated working groups to address specific requirements. He also encouraged Russian companies to tap Indian markets through local listings, noting that some subsidiaries' valuations in India exceed those of their parent companies overseas. At present, 23 Russian entities are registered as FPIs in India.
INDIA’S OFFERINGS
Ashishkumar Chauhan, MD and CEO, NSE, said India offers a broader proposition for global issuers, particularly for Russians, providing access to capital and stronger valuation outcomes. He added that India’s capital markets are becoming an increasingly important channel for long-term international economic engagement.
At the same event, Sergey Glazyev, State Secretary of the Union State of Russia and Belarus, called for a “new financial architecture” based on national currency and international trust. Sriram Krishnan, Chief Business Development Officer, NSE, suggested that Russian firms explore fundraising through Gift City, Gujarat, and consider establishing a banking presence in the hub. Separately, Varshney noted that SEBI is working on technology-led solutions to ease access and reduce business costs.
Sarkozy’s indictment, and lessons for India
FURTHERING PROBITY. France has tough laws on campaign finance. In India, the proposed 130th Constitution Amendment Bill could bolster governance, holding those at the helm to account ROHINI RANGACHARI KARNIK
La loi, dans son majestueux égalité, interdit aux riches comme aux pauvres de coucher sous les ponts, de mendier dans les rues et de voler du pain [The law, in its majestic equality, forbids the rich and the poor alike to sleep under bridges, to beg in the streets, and to steal bread] — Anatole France in Le Lys Rouge (The Red Lily, 1894)
On March 16, France’s ex-President Nicolas Sarkozy went on trial on appeal over allegations that he accepted €50 million from Libyan dictator Muammar Gaddafi to fund his 2007 campaign. In 2025, he became the first political Head of State in modern French history to serve prison time. The only similarity dates back two centuries when King Louis XVI faced imprisonment, as other modern leaders like Jacques Chirac avoided actual jail time.
In 2013, France created the Haute Autorité pour la transparence de la vie publique (High Authority for the transparency of public life) to prevent conflicts of interest and inspect changes to the net assets of public servants. Sarkozy, who served as President from 2007 to 2012, was convicted of criminal conspiracy for accepting Libyan funding in exchange for boosting Libya’s global image. In September 2025, a Paris court sentenced him to five years in prison, a €100,000 fine, and five-year bans from public office.
STRICT OVERSIGHT
Under French law, campaign finance is strictly regulated, with donations and expenditures subject to strict caps and mandatory audits. The French Electoral Code (L.52-8) explicitly bars foreign states or legal entities from providing donations to political candidates. Sarkozy’s conviction has fueled debates on judicial independence, with some viewing it as a rule-of-law victory and others claiming it is politically driven. The ruling underscores the judiciary’s rising assertiveness against former leaders to ensure political decision-making is conducted in the public interest.
Indians recall Sarkozy as the Republic Day chief guest in 2008 and for his 2010 tour that advanced ties regarding Jaitapur nuclear power and Rafale jets. Unlike France, no Indian post-independence Prime Minister or President has been sentenced for such a long duration. While Indira Gandhi was briefly imprisoned after the Emergency and others like PV Narasimha Rao faced convictions without jail time, the Supreme Court and CBI have cleared others like Manmohan Singh in high-profile cases.
CMS IN JAIL
Conversely, several Indian Chief Ministers have been imprisoned on charges of corruption and money laundering. Arvind Kejriwal made history as the first sitting Chief Minister arrested in 2024. In Bihar, Lalu Prasad Yadav’s jailing ended the "Jungle Raj" era, leading to reforms under Nitish Kumar, though such imprisonments also often lead to political instability,.
India’s Constitution allows for branch overlaps and provides Prime Ministers and Presidents with indirect safeguards or complete immunity during their tenure. The Electoral Bond Scheme of 2018, intended to be a transparent funding method, was struck down by the Supreme Court in 2024 for violating the voters’ right to information. Currently, India still lacks a transparent method for accounting for campaign finance.
To bolster governance, the ongoing Constitution (130th Amendment) Bill 2025 seeks the removal of a Minister if they are accused of an offence punishable with five or more years of imprisonment and have been detained for 30 consecutive days. It also calls for the resignation of the Prime Minister or a Chief Minister after 30 days of detention. While under debate, this bill could strengthen public administration through constitutional morality and judicial prudence.
The writer teaches French at the Alliance française de Delhi
Investors turn to tax-loss harvesting
WORD OF CAUTION. Only genuine losses on paper qualify, regulatory or holding-period risks remain: Experts Shishir Sinha — New Delhi
Heightened market volatility and a late-March push to optimise tax outgo are prompting a growing number of equity investors to adopt tax-loss harvesting, a strategy that involves realising losses to offset gains and reduce tax liability, according to tax practitioners and wealth advisers.
HEDGE STRATEGY
Amid heightened market volatility and as the financial year nears to a close, equity investors are adopting tax-loss harvesting to offset gains and reduce tax liability. A Delhi-based entrepreneur, who asked not to be identified, said he rebalanced his portfolio after several holdings breached key price levels. He booked losses of about ₹1.2 lakh against short-term capital gains of ₹2 lakh in the current financial year, reducing his taxable gains to roughly ₹80,000. At prevailing short-term capital gains (STCG) rates, that translated into a significantly lower tax outgo.
“As prices of some of my stocks broke two support levels, I sold them at a loss of around ₹1.2 lakh. My short-term gain is effectively now ₹80,000. If I had to pay STCG tax on ₹2 lakh, my liability would have been ₹40,000, but I have paid only ₹16,000 (surcharge and cess not included). The adjustment is within the law,” he said.
GROWING TREND
Advisers said that such transactions are becoming more common as markets correct and investors reassess portfolios. “Tax-loss harvesting involves selling investments that are in a loss to reduce tax liability. This can be useful in planning strategy, particularly in the current market environment and at year-end,” said Hardik Mehta, Lead-Tax at Ionic Wealth. He added that the benefit is contingent on filing income tax returns within the deadline.
Under tax rules, short-term capital losses can be set off against both short- and long-term gains, while long-term losses can be adjusted only against long-term gains. Unabsorbed losses may be carried forward for up to eight assessment years, subject to timely filing.
TAX RULES
Some advisers view the current correction as creating a window to convert unrealised losses into tax assets. “The market environment presents an opportunity for investors to review portfolios and crystallise losses for tax efficiency,” said Rahul Jain, Partner at Khaitan & Co. He cautioned that only realised losses, not notional ones, qualify.
REGULATORY SCRUTINY
Practitioners, however, warn against treating the strategy as mechanical. “Factors such as overall portfolio strategy, impact of the FIFO method, and the possibility of scrutiny in cases of immediate repurchase of similar securities should be carefully evaluated,” said Amit Maheshwari, Managing Partner, AKM Global.
Priyanka Duggal, Partner at Grant Thornton Bharat, noted that selling and re-entering positions could convert what would have been long-term capital gains, taxed at lower rates, into short-term gains taxed at higher rates.
Advisers also flag anti-avoidance provisions. According to Duggal, the General Anti-Avoidance Rules (GAAR) may apply if transactions are deemed to lack commercial substance or are undertaken solely to evade tax. “Assessees must ensure transactions are backed by genuine commercial intent and not structured to create artificial losses,” said Rajat Mohan, Senior Partner at AMRG & Associates. He added that near-simultaneous buybacks of identical securities and inadequate documentation could invite scrutiny.
West Asia war to impact India’s direct investments in the UAE
DATA FOCUS. Sindhu Hariharan — Chennai
At a time when the ongoing political tensions in West Asia are casting a shadow of doubt on the investment potential of the GCC nations, data show that around 7 per cent of India’s monthly overseas direct investments (ODI) go to the United Arab Emirates. RBI data show that a total of $1.2 billion was invested in the UAE as outbound direct equity investment in FY26 (April-February), making up around 7 per cent of the total ODI in the 11-month period.
The investments are largely by small- and mid-size companies typically in the areas of logistics and warehousing, manufacturing, retail/trade, restaurants and hotels. In contrast, other GCC countries attract lesser ODI from India. On a monthly basis, the equity investments into the UAE are sporadic and do not follow a linear growth pattern. In December, for instance, Reliance Industries’ $350 million investment in West Asia subsidiary Reliance Industries DMCC led to a spike in overall ODI tally in the month.
Similarly, MakemyTrip and TVS Motor were among companies that made large ODI commitments into the UAE in May 2025. In February 2026, for instance, Neo Star Infraprojects, One Point One Solutions, Power Build, Sai Krish Healthcare Services, Thriveni Earthmovers and Infra, and Trejhara Solutions are among the companies with the highest equity ODI in the UAE. Similarly, Asian Paints, Bhima Jewels, Clean Max Enviro Energy Solutions, and Concord Enviro Systems made ODI in January, as per RBI data.
From April 2023 to August 2025, a cumulative $5 billion has been invested in the UAE by Indian companies as ODI (equity + loan + guarantee), which represents 10 per cent of the total ODI in this period, as per data from the Department of Economic Affairs. In the last two decades (April 2000 to August 2025), the ODI outflow from India to the UAE stands at $18.3 billion, making up 5 per cent of the total ODI.
EQUITY INVESTMENT
ODI refers to investments made by Indian entities/residents in foreign companies or their own foreign subsidiaries. Governed by the RBI, ODI can take various forms, such as equity investment in a foreign entity (joint ventures or wholly owned subsidiaries) or loans or guarantees extended to foreign affiliates.
Overall, India’s ODI in equity for FY26 (April-February) was $18.1 billion, a 28.7 per cent rise from the same period last year. Even as the ODI saw a rise in FY26, it has been tapering down in recent months due to increased macro uncertainty. In January 2026, ODI (equity) was down 13.6 per cent year-on-year at $1.5 billion, and in February it was $1.1 billion, again a 57.5 per cent drop y-o-y. Among the top ODIs in February were Tata Steel’s $625 million in wholly-owned subsidiary T Steel Holdings, Neo Star Infraprojects’ $27.7 million in its UAE subsidiary, and ONGC Videsh’s $52.8 million in its Mozambique JV.
‘World goods trade may slow to 1.9% due to Gulf crisis’
Amiti Sen — New Delhi
World trade in goods is projected to slow to 1.4-1.9 per cent in 2026 from 4.6 per cent in 2025. This decline is attributed to risks from the continued conflict in West Asia, coupled with a normalisation in the surge of AI-related products and tariff-driven front-loading of shipments, according to the WTO’s latest trade forecast. In 2027, world merchandise trade volume is projected to grow by 2.6 per cent.
The forecast noted that beyond fuels, the Strait of Hormuz blockade has disrupted fertilizer supplies critical to global agriculture. Around one-third of the world’s fertilizer exports normally pass through this waterway.
UREA IMPORTS
“Major agriculture producers like India, Thailand and Brazil depend on the Gulf for 40 per cent, 70 per cent and 35 per cent of their urea imports respectively. Gulf states face a food security challenge as well, with import dependency averaging 75 per cent for rice and exceeding 90 per cent for corn, soybeans and vegetable oil — commodities that would face higher costs through alternative routes,” the report stated.
Excluding energy price shocks, global merchandise trade growth would slow to 1.9 per cent in 2026 due to normalisation following the surge in AI-related products and front-loading of imports to avoid new tariffs in 2025.
ENERGY IMPORTS
“However, a scenario where both crude oil and LNG prices remain elevated throughout 2026 would shave 0.3 percentage points off the GDP forecast for 2026; this would in turn slash 0.5 percentage points off the trade forecast for this year and up to one percentage point for regions dependent on energy imports. This would mean merchandise trade volumes would grow by just 1.4 per cent,” the report added.
POSSIBLE LIFELINES
On the brighter side, WTO economists noted that if the conflict is short-lived and AI-related spending remains strong throughout 2026 and into 2027, merchandise trade growth could be boosted by 0.5 percentage points. This could lead to growth as high as 2.4 per cent this year and 2.7 per cent next year.
WTO Director General Ngozi Okonjo-Iweala stated that the outlook reflects the resilience of global trade, buoyed by high technology products, digitally delivered services, and supply chain adaptations.
“However, this baseline forecast is under pressure from the conflict in West Asia. Sustained increases in energy prices could increase risks for global trade, with potential spillovers for food security and cost pressures on consumers and businesses. Nevertheless, WTO members can help cushion the impact... by maintaining predictable trade policies and strengthening supply chain resilience,” she said.
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