Nifty, Sensex Fall Over 2% as Brent Crude Surges to USD 115 Amid U.S.-Iran War

Market Update at 09:33 AM: Indian equity benchmark indices declined sharply in early trade on Monday as a spike in crude oil prices triggered risk-off sentiment in global markets amid the escalating conflict between the U.S. and Iran.

As of 9:16 AM, the Nifty50 was trading 2.39 per cent or 590.95 points lower at 23,945.95. The Sensex also declined 2.59 per cent or 2,025.26 points to 76,860.71.

The sharp fall in domestic equities came after Brent crude prices surged amid fears of supply disruptions. Brent crude futures jumped nearly 21 per cent to USD 112 per barrel during the early Asian trading session as the U.S.–Iran conflict intensified over the weekend.

Reports indicated that major oil-producing countries such as Kuwait, the UAE, and Iran announced a cut in oil production after the Strait of Hormuz was shut down following Iran’s attack on ships passing through the critical global oil supply route. The development raised concerns about significant disruptions in global crude supply.

Meanwhile, U.S. President Donald Trump said that the rise in oil prices is a small price to pay for the safety and peace of the U.S. and the world.

Brent crude’s May futures contract was trading 25 per cent higher at USD 115.77 per barrel as of 9:20 AM on the Intercontinental Exchange.

Broader markets also witnessed selling pressure in line with the benchmark indices. The Nifty MidCap index declined 2.54 per cent, while the Nifty SmallCap index fell 2.51 per cent.

Among sectors, the Nifty PSU Bank index emerged as the biggest laggard with a loss of more than 4 per cent in early trade. The Nifty Bank and the Nifty Financial Services indices also underperformed the broader market.

Pre-Market Update at 7:49 AM: The Indian stock market benchmark indices, the Sensex and Nifty 50, are likely to open sharply lower on Monday as global markets witnessed a broad sell-off. The decline comes amid a sharp rise in crude oil prices, driven by escalating tensions in the U.S.–Israel war with Iran. The conflict has raised concerns about tighter oil supply and possible disruptions to shipments through the Strait of Hormuz.

As of 7:25 am, GIFT Nifty was trading around the 23,804 level, reflecting a discount of nearly 770 points from the previous close of Nifty futures. This indicates a significant gap-down opening for the Indian benchmark indices.

Asian markets also witnessed a sharp fall on Monday, declining by as much as 6 per cent as rising crude oil prices triggered a sell-off in risk assets. Oil prices crossed USD 100 per barrel for the first time since 2022 amid escalating tensions in the Middle East.

Japan’s Nikkei 225 fell 6.22 per cent below the 53,000 mark, while the Topix index dropped 5.27 per cent. South Korea’s Kospi plunged 6.68 per cent, triggering a temporary halt in trading of Kospi 200 futures.

Crude oil prices surged after major producers such as Kuwait, Iran, and the United Arab Emirates reduced production following the closure of the Strait of Hormuz amid the U.S.–Iran conflict.

During the week ahead, investors will closely track several important market triggers including developments in the U.S.–Israel–Iran conflict, movements in crude oil prices, gold and silver rates, foreign institutional fund flows, inflation data, and other key domestic and global macroeconomic indicators.

Iran intensified its attacks across the Persian Gulf, targeting key infrastructure, while Israel carried out fresh strikes that reportedly hit oil storage facilities in Tehran. Meanwhile, Iran has reportedly appointed Mojtaba Khamenei as the country’s new Supreme Leader following the killing of his father, Ali Khamenei.

The U.S. dollar hovered near a three-month high reached last week, while the 10-year U.S. Treasury yield climbed to a near one-month high. The U.S. dollar index rose to 99.695 against a basket of global currencies.

Sammaan Capital and SAIL will remain under the futures and options ban list on March 9.

On March 6, Foreign Institutional Investors were net sellers in the equity market, selling shares worth Rs 6,030.38 crore. Domestic Institutional Investors, however, purchased equities worth Rs 6,971.51 crore during the same session. FIIs have now remained net sellers for six consecutive trading sessions.

India’s key equity benchmarks ended lower on Friday, March 6, amid rising geopolitical tensions due to the U.S.–Israel conflict with Iran, which pushed oil prices higher and weakened global risk sentiment. The Nifty 50 slipped below the 24,500 mark and is now more than 7 per cent below its all-time high.

At the close, the Nifty 50 declined 315.45 points, or 1.27 per cent, to settle at 24,450.45, while the Sensex fell 1,097 points, or 1.37 per cent, to end at 78,918.90. The Nifty Bank index dropped more than 1,200 points to 57,783.25. Meanwhile, the India VIX surged 11 per cent to above 19 and jumped more than 45 per cent during the week, reflecting heightened market volatility. On a weekly basis, the Nifty 50 declined 2.89 per cent, marking its second consecutive week of losses, while the Nifty PSU Bank Index emerged as the biggest loser, falling more than 6 per cent.

Wall Street’s three major indices ended lower on Friday after a setback in the U.S. labour market and a sharp 16 per cent jump in oil prices triggered by escalating tensions in the Middle East, which dampened investor sentiment.

The Dow Jones Industrial Average declined 453.19 points, or 0.95 per cent, to close at 47,501.55. The broader S&P 500 fell 90.69 points, or 1.33 per cent, to 6,740.02, while the tech-heavy Nasdaq Composite dropped 361.31 points, or 1.59 per cent, to end at 22,387.68.

The U.S. economy unexpectedly lost jobs in February and the unemployment rate increased to 4.4 per cent. Nonfarm payrolls decreased by 92,000 jobs last month after a downwardly revised increase of 126,000 jobs in January.

Gold prices fell in early Asian trading due to a stronger U.S. dollar, which reduced the appeal of the dollar-denominated asset for holders of other currencies. Spot gold declined 1.88 per cent to USD 5,075 per ounce, while silver prices rose 4.52 per cent to USD 80.65 per ounce.

Meanwhile, Brent crude surged 16.7 per cent to USD 108.20 per barrel as trading began in Asian markets, marking the first time oil prices have crossed the USD 100 mark since Russia’s invasion of Ukraine in February 2022. West Texas Intermediate also climbed sharply, rising 18.48 per cent to USD 107.70 per barrel.

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