Nifty Falls 1.24%, Sensex Slides Over 1,000 Points as Middle East Tensions Spike Oil Prices

Market Update at 04:01 PM: On Monday, March 2, India’s key equity benchmarks, the Nifty 50 and the Sensex, closed in the red, falling over 1 per cent as escalating Middle East tensions pushed crude oil prices higher and triggered a flight to safe-haven assets, weighing on investor sentiment.

The benchmark Nifty 50 opened sharply lower, slipping towards the 24,600 mark before recovering nearly 200 points from the day’s low. However, the index extended losses for the second consecutive session. At close, the Nifty 50 declined 312.95 points, or 1.24 per cent, to settle at 24,865.70, below the 25,000 mark. The Sensex dropped 1,048.34 points, or 1.29 per cent, to end at 80,238.85. The Bank Nifty finished 1.14 per cent lower at 59,839.65, while the Indian fear gauge, India VIX, surged over 225 per cent, crossing the 17 level, indicating heightened volatility.

Among Nifty constituents, Bharat Electronics and Hindalco Industries helped the index recover from Intraday lows, while heavyweights dragged the benchmarks lower.

The Indian rupee depreciated against the dollar and government bond yields rose after U.S. and Israeli strikes on Iran intensified fears of a prolonged Middle East conflict, dampening risk appetite across global financial markets.

Brent crude prices climbed sharply following reports of strikes that killed Iran's Supreme Leader Ali Khamenei. Prices touched USD 82.40 per barrel, the highest level in 14 months, before easing slightly to trade 6 per cent higher at USD 77.20 per barrel in morning trade.

Further escalating concerns, Iran reportedly closed navigation through the Strait of Hormuz — a crucial chokepoint between Oman and Iran connecting the Persian Gulf to the Arabian Sea. The route handles nearly 20 per cent of global oil flows and over 40 per cent of India’s crude imports, raising fears of supply disruptions and higher energy costs.

India’s economy has maintained strong growth and relatively low inflation over the past year. However, a sustained spike in crude prices and potential disruptions in shipping routes could pose risks to macroeconomic stability.

Shares of oil marketing companies, paint and tyre makers, aviation firms and chemical manufacturers declined as rising crude prices are expected to increase input costs.

On the sectoral front, only 2 out of 11 key sectoral indices ended in positive territory. Broader markets also came under pressure, with the Nifty Midcap index and Nifty Smallcap 100 index falling 1.58 per cent and 1.75 per cent, respectively. The Nifty Metal index emerged as the top sectoral gainer, rising 0.24 per cent. In contrast, the Nifty Auto index plunged 2.2 per cent, marking its biggest single-day loss since January 20 and extending Friday’s losses to a total decline of 4.02 per cent.

Among individual stocks, Larsen and Toubro fell 4.95 per cent, stating that the Middle East remains a strategically significant market for its operations across energy, infrastructure, renewables and technology segments. Contrary to the broader market trend, oil explorers ONGC and Oil India gained around 0.9 per cent each, benefiting from higher crude prices that typically support revenue and profitability.

The key contributors supporting the Nifty 50 were Bharat Electronics at +7.25 points, Hindalco Industries at +4.86 points and Sun Pharmaceutical Industries at +3.67 points. On the downside, Larsen & Toubro dragged the index by -54.47 points, followed by Reliance Industries at -53.18 points and HDFC Bank at -28 points.

As of February 27, 2026, market breadth remained firmly negative. Out of 3,297 stocks traded on the NSE, 651 advanced, 2,579 declined and 67 remained unchanged. A total of 37 stocks touched their 52-week highs, while 635 hit their 52-week lows. Additionally, 41 stocks were locked in Upper Circuits, whereas 204 stocks were locked in Lower Circuits.

Market Update at 2:19 PM: Indian benchmark indices extended losses on Monday, tracking a sharp decline in global equities as tensions between the U.S. and Iran escalated over the weekend. Auto and oil and gas stocks weighed the most on the markets.

As of 2:00 PM, the Nifty 50 was trading 2.2 per cent, or 558.05 points, lower at 24,620. The Sensex declined 2.23 per cent, or 1,838.34 points, to 79,471.65.

Volatility surged sharply, with the NSE Nifty India Volatility Index jumping 25 per cent so far on Monday. As of 2:10 PM, the index was trading 24.7 per cent higher at 17.09.

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

Among Nifty 50 constituents, Larsen & Toubro, InterGlobe Aviation, and Adani Ports and Special Economic Zone were the Top Losers.

Broader markets underperformed the benchmark indices. The Nifty MidCap and the Nifty SmallCap indices were trading 2.17 per cent and 2.16 per cent lower, respectively.

On the sectoral front, the Nifty Auto index was the worst hit, falling over 3 per cent as shares of Maruti Suzuki India and Mahindra & Mahindra dragged the index lower. The Nifty Oil and Gas index was the second worst performer, declining over 2 per cent as Brent crude prices jumped 9 per cent amid rising geopolitical tensions.

Meanwhile, the Nifty Metal index fell the least and emerged as the best-performing sectoral index at the open.

Market Update at 12:17 PM: Indian benchmark indices extended their losses on Monday, mirroring weakness in global equities amid escalating geopolitical tensions between the U.S. and Iran.

As of 12:08 PM IST, the Nifty50 was trading at 24,773.90, down 404.75 points or 1.61 per cent. The BSE Sensex stood at 79,964.41, falling 1,322.78 points or 1.63 per cent (12:07 PM).

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

Among Nifty50 constituents, Larsen & Toubro, InterGlobe Aviation, and Adani Ports and Special Economic Zone were among the top losers.

In the broader market, the Nifty MidCap index was down 0.93 per cent, while the Nifty SmallCap index declined 1.3 per cent.

On the sectoral front, the Nifty Auto index was the worst performer, falling over 2 per cent, dragged lower by Maruti Suzuki India and Mahindra & Mahindra. Meanwhile, the Nifty Metal index fell the least, emerging as the relatively better-performing sector at the open.

Market Update at 09:32 AM: The Indian stock market began Friday’s session on a muted note amid mixed cues from global peers. Benchmark indices opened slightly lower and extended losses in early trade.

The BSE Sensex opened around 30 points lower at 82,220 and soon slipped to an intra-day low of 81,883. At 9:20 AM, the Sensex was trading 273 points, or 0.35 per cent, lower at 81,975. The Nifty 50 index was down 85 points, or 0.33 per cent, at 25,411.

Among the 30 Sensex constituents, IT stocks witnessed buying for the third consecutive session. Infosys gained 3 per cent to trade at Rs 1,331. Tech Mahindra, HCL Technologies and TCS were up around 1 per cent each.

On the downside, Maruti Suzuki, Mahindra & Mahindra, Bharti Airtel, InterGlobe Aviation (IndiGo), Reliance Industries and Adani Ports declined over 1 per cent each, weighing on the benchmarks.

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.