The Indian stock market faced a severe selloff on May 12, with the Nifty 50 index plunging 1.83% to close at 23,379, while the S&P BSE Sensex fell 2% to 74,559. This decline marks the worst intraday drop in two months, driven by fears of a prolonged oil shock and fragile negotiations to resolve the Iran conflict. The broader market indices suffered even more, with the Nifty Smallcap 100 crashing 3.12% and the Nifty Midcap 100 declining 2.51%. Major sectoral indices were all in the red, led by Nifty Realty, which fell 4%, and technology stocks, which saw significant losses after OpenAI announced a new AI venture. Notable losers included Kalyan Jewellers, which dropped 6% to ₹361.80 per share, and UPL, which fell 6.4% to ₹626 amid calls from Prime Minister Narendra Modi for reduced fertilizer consumption. This market turmoil reflects growing concerns about the impact of rising crude oil prices, now above $115 per barrel, and potential austerity measures being considered by the Indian government.