Indian Markets Fall Over 1%; Nifty at 24,891, Sensex at 80,294 Amid U.S.-Iran Tensions

Market Update at 09:32 AM: Indian benchmark indices opened sharply lower on Monday, tracking losses in global equities as tensions between the U.S. and Iran escalated.

The Nifty50 was trading 1.33 per cent or 283.25 points lower at 24,891.20, while the Sensex declined 1.22 per cent or 992.40 points to 80,294.70 in early trade.

Over the weekend, Iran’s Supreme Leader Ayatollah Ali Khamenei, along with other senior officials, was killed in a joint U.S.-Israel military operation. The conflict is expected to intensify after U.S. President Donald Trump vowed to avenge the deaths of U.S. servicemen who were killed in Iran’s retaliation, according to agency reports.

Among Nifty50 constituents, InterGlobe Aviation, Larsen & Toubro, and Eternal were the top losers. On the other hand, Oil and Natural Gas Corporation (ONGC), Hindalco Industries, and Bharat Electronics emerged as the top gainers.

Broader markets underperformed the benchmarks. The Nifty MidCap index fell 1.36 per cent, while the Nifty SmallCap index dropped 1.86 per cent.

On the sectoral front, the Nifty Realty index was the worst performer, declining over 2 per cent at the open, followed by the Nifty Media index. Meanwhile, the Nifty Metal index fell the least, making it the best-performing sector in early trade.

Pre-Market Update at 7:44 AM: India’s benchmark equity indices, the Sensex and the Nifty 50, are likely to open with a gap down on Monday amid heightened global tensions following the escalating U.S.–Israel–Iran conflict. Investor sentiment turned cautious after reports that Iran’s Supreme Leader, Ayatollah Ali Khamenei, was killed in joint U.S.–Israeli airstrikes, intensifying the Middle East crisis.

Asian markets traded sharply lower, U.S. stock futures slipped more than 1 per cent, and safe-haven assets such as gold rallied. Crude oil prices also surged on concerns over supply disruptions, particularly after reports that the Strait of Hormuz was effectively shut and several ships were attacked.

As of 7:23 am, Gift Nifty was trading near the 25,208 level, down nearly 77 points from the previous close of Nifty futures, indicating a negative start for domestic indices.

Tensions in the Middle East escalated significantly after reports of the death of Iran’s Supreme Leader, Ali Khamenei, in joint U.S.–Israeli strikes. U.S. President Donald Trump stated that 48 Iranian leaders have died in ongoing operations. Ayatollah Arafi has reportedly been appointed as the interim Supreme Leader of the Islamic Republic. Market participants are closely monitoring further developments in the conflict, along with movements in crude oil, gold and silver prices, foreign institutional flows, and key domestic and global macroeconomic data releases.

Under the revised GDP series, India’s economy expanded 7.8 per cent in the October–December quarter, up from 7.4 per cent in the same period last year. The FY26 full-year growth estimate has been raised to 7.6 per cent from the earlier projection of 7.4 per cent made in January. Growth for the previous fiscal year has been revised to 7.1 per cent.

The Organisation of the Petroleum Exporting Countries has decided to resume oil production hikes next month despite rising geopolitical tensions. Major producers, including Saudi Arabia and Russia, will collectively raise output by 206,000 barrels per day, higher than the earlier planned 137,000 barrels per day monthly increase for the fourth quarter.

Sammaan Capital will remain on the F&O ban list for March 2.

On February 2, Foreign Institutional Investors were net sellers, offloading equities worth Rs 7,536.36 crore, while Domestic Institutional Investors bought shares worth Rs 12,292.81 crore during the same session. FIIs have emerged as net sellers for February, with cumulative net selling of Rs 6,640.78 crore so far.

On Friday, Indian equities witnessed a sharp sell-off as the escalating U.S.–Iran war dampened investor sentiment in the absence of fresh domestic triggers. The Sensex fell 961.42 points, or 1.17 per cent, to close at 81,287.19, while the Nifty 50 declined 317.90 points, or 1.25 per cent, to settle at 25,178.65.

U.S. stock futures tumbled in overnight trade amid escalating geopolitical tensions. Futures linked to the Dow Jones Industrial Average fell 517 points, or 1 per cent. S&P 500 futures dropped 1 per cent, while Nasdaq-100 futures slid more than 1 per cent.

On Friday, Wall Street ended lower, weighed down by financial and technology stocks. The S&P 500 and the Nasdaq recorded their steepest monthly declines since March 2025, while the Dow notched its tenth consecutive month of gains. The Dow Jones Industrial Average declined 521.28 points, or 1.05 per cent, to 48,977.92. The S&P 500 slipped 29.98 points, or 0.43 per cent, to 6,878.88. The Nasdaq Composite fell 210.17 points, or 0.92 per cent, to 22,668.21.

Among key movers, Nvidia dropped 4.2 per cent, AMD declined 1.7 per cent, Microsoft fell 2.24 per cent, Apple lost 3.21 per cent and Tesla slipped 1.49 per cent. Zscaler tumbled 12.2 per cent, while Netflix surged 13.8 per cent. Warner Bros. Discovery declined 2.2 per cent, Paramount Skydance soared 20.8 per cent, Block Inc. jumped 16.8 per cent and Dell Technologies rallied 21.9 per cent.

Gold prices rallied as safe-haven demand increased amid the Middle East conflict. Spot gold rose 1.4 per cent to USD 5,353.61 per ounce. Silver gained 1.5 per cent to USD 95.23 per ounce earlier, though spot silver later traded at USD 93.28, down 0.52 per cent as of 7:16 am.

Crude oil prices surged as geopolitical tensions threatened supply routes. Brent crude jumped 4.8 per cent to USD 75.91 per barrel, while U.S. West Texas Intermediate (WTI) crude futures rallied 3.61 per cent to USD 69.69 per barrel as of 7:17 am.

Market participants will continue to track geopolitical developments, commodity price volatility and institutional flows for further direction.

Disclaimer: The article is for informational purposes only and not investment advice.