The benchmark BSE Sensex crashed by 1800 points on Wednesday after US President Donald Trump hinted at the resumption of the war with Iran.
Sensex crashed 1,677.12 points, or 2.15 per cent, to 76,503.60, while Nifty plummeted 516.65 points, or 2.12 per cent, to 23,882.05. These are the biggest percentage drops for the benchmarks in more than two months.
Why is the market down today?
The sharp drop in the stock market came after US President Donald Trump on Wednesday said the ceasefire with Iran was “over" as fighting flared between Tehran and Washington.
US launched strikes on Iran on Tuesday and cited Iranian attacks on ships in the vital Strait of Hormuz as the reason for it. The strategic shipping route remains a flashpoint in the conflict, which began in late February with massive US-Israeli strikes on Iran.
Tehran insists on controlling the waterway, saying it will charge fees for passage and threatening to hit vessels that deviate from its authorised route.
"As far as I'm concerned, it's over," Trump said at a NATO summit in Turkey on Wednesday when asked if the truce was intact, saying, "It's just a waste of time dealing with them".
{{/usCountry}}"As far as I'm concerned, it's over," Trump said at a NATO summit in Turkey on Wednesday when asked if the truce was intact, saying, "It's just a waste of time dealing with them".
{{/usCountry}}"I'll let our wonderful negotiators keep talking if they want, but I don't see it. I don't like these people," he added.
The fighting between the US and Iran was largely on pause under a fragile peace memorandum. Maritime traffic had also tentatively resumed after Washington and Tehran signed the memorandum last month, but Iran has been insisting there will be no return to pre-war arrangements, under which vessels could pass freely through the strait.
Under the 14-point US-Iran memorandum, Iran and Oman, which border Hormuz, must hold talks "to define the future administration and maritime services" in the waterway with other Gulf states.
US Central Command (CENTCOM) said on Tuesday its forces had hit with strikes over 80 targets, including Iranian air defence systems, coastal radar sites and 60 IRGC small boats.
The strikes aimed "to degrade Iran's ability to continue attacking international commerce flowing through the international trade corridor", it said.
Iran was quick to respond, with the Guards saying they hit dozens of US military facilities in Kuwait and Bahrain.