Sensex tanks 900 points; aviation stocks decline following AI crash
12 Jun 2025

The Indian stock market witnessed a major slump today, with the BSE Sensex crashing over 900 points to hit a low of 81,531 earlier today.

The NSE Nifty also plummeted by nearly 300 points, falling below the crucial mark of 24,850.

The market capitalization of all listed companies on the BSE dropped by ₹4.19 lakh crore to ₹451 lakh crore due to widespread selling across sectors.

Following the Air India mishap in Ahmedabad, aviations stocks fell over 3%.

Global uncertainties lead to sharp decline in Indian markets
Market influences

The sharp decline in the Indian stock market can be attributed to a number of global uncertainties.

These include rising tensions in the Middle East and a cautious approach ahead of the weekly F&O expiry.

IT stocks led the sell-off, with benchmark indices slipping nearly 1% during intraday trade.

US pulls out personnel from Middle East
Geopolitical tensions

US President Donald Trump announced that American personnel are being withdrawn from the Middle East due to security concerns.

The move comes amid fears of an Israeli strike on Iran's nuclear facilities, with Iranian Defense Minister Aziz Nasirzadeh warning retaliation against US bases if attacked.

Regional markets reflected these tensions, with Saudi Arabia's benchmark index falling 1.3% and Dubai's main share index recording its steepest intraday fall since April at 1.7%.

'Tariff crisis is not yet over'
Trade concerns

Along with geopolitical tensions, Trump also announced plans to send out letters for new trade deals within weeks.

The lack of detail and his tariff warning have contributed to a risk-off mood in global markets.

"The tariff crisis is not yet over," said Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments.

Global equities fall on Thursday
Market impact

Global equities fell on Thursday, adding pressure on Indian markets. This was due to lingering tariff concerns and fragile geopolitical dynamics.

European equities were set for a weak open with futures on Germany's DAX and London's FTSE 100 down 0.8% and 0.4%, respectively.

In Asia, MSCI's broadest index of Asia-Pacific shares outside Japan slipped 0.2% after hitting a three-year high yesterday.

US dollar hits lowest level in 2 months
Currency fluctuations

The US dollar weakened to its lowest level in nearly two months on Thursday, dragged down by soft inflation data and rising expectations that the Federal Reserve could cut interest rates later this year.

The dollar index hit its lowest since April 22 at 98.246 and was last down 0.04% at 98.419.

Markets are now pricing in two rate cuts of 25 basis points each by year-end, according to Reuters.