Sensex crashed 1,677 points on July 8 — its worst single-day drop since March — after Donald Trump declared the US-Iran truce "over" and launched military strikes near the Strait of Hormuz. Brent crude spiked above $76 per barrel, and by the closing bell, the Nifty had surrendered 517 points to settle at 23,882. For a market that had just strung together four straight days of gains (Sensex hit 78,285 on Monday), it was a violent reversal.

Behind...