Sensex Crashes 1000 Points, When the market falls over 1,000 points in a day, it grabs everyone’s attention, right? That’s exactly what happened on Tuesday, February 24, as Indian equities saw a sharp and broad-based selloff, wiping out massive investor wealth in just one session. This sudden collapse has once again raised concerns about an Indian stock market crash, as volatility gripped Dalal Street and investors rushed to cut exposure. Market experts believe the scale and speed of the decline resemble conditions typically seen during an Indian stock market crash, triggering panic across sectors and eroding confidence in the near term.
Let’s break down what happened, what triggered the fall, and the five key factors that spooked investors.
Market Mayhem: How Bad Was The Fall?
The Sensex crashed 1,069 points, or about 1.28%, to close at 82,225.92. The NSE benchmark Nifty 50 wasn’t spared either, slipping 1.12% to end the day at 25,424.65. It wasn’t just a mild correction; it was a clear risk-off move.
In terms of wealth destruction, investors saw around ₹3 lakh crore erased in a single day. The overall market capitalisation of BSE-listed companies dropped from about ₹469 lakh crore in the previous session to nearly ₹466 lakh crore.
Interestingly, while the fall was broad-based, mid- and small-cap indices still managed to outperform the frontline benchmarks, even though they too ended in the red. The BSE 150 MidCap Index declined around 0.40%, and the BSE 250 SmallCap Index slipped about 0.76%.
So, what triggered this sudden bout of weakness? Let’s look at the five major reasons behind the selloff.
Global Jitters Over US Tariffs Return
Sensex Crashes 1000 Points, One of the biggest overhangs for global markets right now is the renewed uncertainty around US tariffs. Even though the US Supreme Court (SCOTUS) recently struck down certain Trump-era global tariffs, that decision may have made the current Trump administration even more aggressive on trade.
According to Bloomberg, the administration is now exploring the use of Section 232 of the Trade Expansion Act of 1962 to reintroduce tariffs in a different form, effectively replacing the duties that were struck down by the apex court.
Donald Trump has also issued a warning to foreign governments: if they side with the Supreme Court’s decision or pull back from trade commitments, they could face higher tariffs on exports to the US. That kind of rhetoric naturally makes global investors nervous.
Adding to the uncertainty, markets are closely watching Trump’s first official State of the Union address of his second term, scheduled for February 24. Any hawkish tone on trade could mean more turbulence ahead for global trade flows and risk assets.
As VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, pointed out, Trump’s address and his message to the world will be closely tracked, especially after the EU froze a trade deal with the US following tariff-related changes. His warnings to countries rethinking deals suggest that the “tariff drama” is far from over and could keep weighing on economies and markets worldwide.
For Indian equities, this uncertainty translates into volatility, as global risk-off sentiment often triggers profit-booking in emerging markets.
Rising Tensions In The US–Iran Standoff
Another big cloud hanging over the markets is the escalating US–Iran situation. Protests have spread across Iran, and reports suggest a violent government crackdown, with thousands feared killed. On top of this, the US has openly threatened military action against Iran.
Geopolitical risk is something markets hate. Any hint of conflict in West Asia immediately raises concerns about crude supply, regional instability, and capital flows.
The next round of nuclear talks between Washington and Tehran is scheduled in Geneva on Thursday, February 26. Until there’s more clarity on how those discussions unfold, investors are likely to remain cautious.
When geopolitical headlines start dominating the news cycle, traders tend to cut risk, book profits, and move towards safer assets. That’s exactly the kind of sentiment that contributed to Tuesday’s selloff.
Brutal Selloff In IT Stocks Continues
Sensex Crashes 1000 Points, If you’re wondering which sector was hit the hardest, the answer is clear: IT stocks. The persistent weakness in technology names has become a major drag on overall market sentiment.
On Tuesday, the Nifty IT index tanked nearly 5% in a single session and is now down close to 21% so far in February. That’s a deep correction by any standard.
What’s spooking investors? Two main things: concerns about AI-led disruption and worries around US interest rates staying elevated. The fear is that advances in artificial intelligence could upend traditional IT services models and hurt long-term earnings visibility.
This isn’t just an India story. IT stocks worldwide have been under heavy pressure. For instance, IBM’s share price plunged on Monday to its lowest level in almost 30 years after AI company Anthropic said its Claude Code tool can help modernise Cobol, a legacy programming language that still runs on many IBM systems.
Anthropic has highlighted that Claude Code can automate much of the complex exploration and analysis required to modernise Cobol-based systems. For a company like IBM, whose business relies significantly on such legacy infrastructure, that kind of automation raises questions about future revenue streams.
Notably, Claude Code is the same AI product that has already triggered a wave of selling in IT stocks over the past few weeks, as markets reassess the risk-reward equation in the sector.
Vishnu Kant Upadhyay, AVP – Research Advisory at Master Capital Services, remarked that the primary driver of the latest correction has been the “continued weakness in IT stocks,” with investors increasingly worried about AI’s impact on the sector’s earnings outlook.
Vijayakumar echoed this sentiment, saying the downtrend in tech stocks linked to potential AI disruption is still very much in play. Weakness in the ADRs of Indian IT companies listed abroad suggests that pressure on this segment is likely to persist.
When a heavyweight sector like IT sees such deep cuts, it naturally pulls the indices down and dents overall market confidence.
Crude Oil Near Six-Month High Weighs On India
Another crucial factor behind the market slide is the renewed rise in crude oil prices. On Tuesday, Brent crude futures were up about 1%, climbing past the 72 per barrel mark and hovering near a six-month high.
The timing isn’t great for India, which is one of the world’s largest crude importers. Higher oil prices are more than just an energy story—they’re a macroeconomic headache.
Rising crude tends to:
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Push up inflation, as fuel and transport costs feed into prices across the economy
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Pressure the current account deficit, since India pays more in foreign currency for its oil imports
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Weaken the rupee, especially if foreign investors turn cautious at the same time
With the third round of nuclear talks between the US and Iran coming up, traders are nervous that any escalation or breakdown in negotiations could further disrupt supply assumptions and push oil prices even higher.
For equity markets, the fear is simple: higher crude could squeeze corporate margins, slow growth, and force the central bank to stay cautious on rate cuts. That combination can quickly sour sentiment.
Stronger US Dollar Puts Pressure On Emerging Markets
Sensex Crashes 1000 Points, The fifth key factor dragging markets lower is the renewed strength in the US dollar. The dollar index climbed around 0.20% and looks set to retest the 98 level.
Why does that matter for India? Because a stronger dollar usually spells trouble for emerging markets. It increases the risk of foreign capital outflows, makes dollar-denominated debt more expensive, and can put pressure on local currencies.
The irony is that foreign institutional investors (FIIs) had recently returned as net buyers in the Indian cash market, buoyed by optimism around the India–US trade deal. Those inflows had helped support the indices despite global headwinds.
But there’s a catch. Indian equity valuations are still elevated, and the much-awaited earnings recovery is yet to fully materialise. In such a setup, any sustained climb in the dollar could quickly reverse FII inflows, as global funds move back into US assets or safer havens.
If that happens, we could see more volatility and possibly deeper corrections in the near term.
Broader Sentiment: Profit-Booking Or Something More?
So, was Tuesday just a healthy correction after a strong run, or the start of a deeper slide? For now, it looks like a mix of profit-booking and global risk aversion.
Indian markets have delivered strong gains over the past months, and many stocks are trading at rich valuations. When you combine that with rising geopolitical tensions, tariff worries, a stronger dollar, expensive crude, and sector-specific pain in IT, you get the perfect recipe for a sharp, broad-based selloff.
The fact that mid- and small-caps fell less than the headline indices suggests that domestic investors are still not in full panic mode. However, if global risks intensify or FII flows reverse sharply, that could change quickly.
What Should Investors Keep An Eye On?
In the coming days, some key triggers to watch include:
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Trump’s State of the Union speech and any fresh signals on tariffs or trade
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Developments in the US–Iran nuclear talks and the security situation in the region
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The trend in Brent crude prices and any supply disruptions
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Movement in the dollar index and FII buying or selling patterns
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Earnings commentary from major IT companies, especially on AI and automation risks
Short-term volatility is likely to remain high, and markets may continue to react sharply to news flow.
Read More: IBM Stock Fall: AI Disruption Fears Wipe $40 Billion Off Market Value
Conclusion
Sensex Crashes 1000 Points, The steep fall in the Sensex and Nifty, coupled with a ₹3 lakh crore hit to investor wealth, is a stark reminder that markets don’t move in a straight line. For now, the correction appears driven largely by external shocks—tariff fears, geopolitical risks, a stronger dollar, rising crude—and sector-specific selling in IT.
India’s long-term growth story hasn’t dramatically changed overnight, but the near-term outlook has definitely become choppier. For investors, this may be a time to reassess risk, stay selective, avoid over-leveraging, and focus on quality rather than chasing momentum.
As always, markets will eventually stabilise, but the journey from here may involve a few more bumps along the way.
