Indian shares logged their biggest monthly slump since March 2020 on Monday, with the benchmark Sensex closing at its lowest in over two years, as the intensifying Middle East war drove oil above $115 a barrel and stoked growth worries in the world's third-largest crude importer.
The Nifty 50 dropped 2.14% to a near one-year low of 22,331.4 and the BSE Sensex shed 2.22% to 71,947.55.
The benchmarks have lost more than 11% each in March and are down 5.1% and 7.1% in financial year 2026, which ends on Monday.
Meanwhile, the Indian rupee fell to a record low for the third straight session, finding only fleeting relief from the central bank's tightening of banks' forex position caps, as the outlook for currency remained weak amid the Middle East war.
Markets are closed on Tuesday for a holiday.
All 16 major sectors fell in March, with the small-caps and mid-caps falling 10.2% and 10.9%.
The Israeli military said on Monday that Iran launched multiple waves of missiles at Israel, and an attack had also been launched from Yemen for only the second time since the U.S.-Israeli war began.
The war, which began in late February, has disrupted global supply routes and pushed Brent crude prices up about 60% in March - a record monthly jump. [MKTS/GLOB]
Heavyweight financials slid 15.6% during the month on record monthly foreign outflows and a sharp drop in HDFC Bank after the resignation of its part-time chairman.
The index dropped 3.5% on Monday after the central bank tightened position limits on onshore forex exposure - a move analysts say could trigger potential losses for banks.
Auto stocks dropped 15.6% this month, while consumer durables lost 12.1% on concerns linked to the war.
The volatility index, a gauge of market uncertainty, more than doubled to 27.89 in March - its biggest monthly jump in six years.
"It's too early to be bottom-fishing in this market; valuations may be cheaper relative to their own history, but versus other Asian markets, they are still expensive - particularly North Asia," said Sat Duhra, portfolio manager at Henderson Far East Income.
Among individual stocks, Coal India was the biggest Nifty 50 gainer this month, jumping 4.6%, as demand for the commodity rose amid war-linked oil and gas supply disruptions.
