The week started with a huge fall in the Indian stock market due to the Iran-America war. As soon as Dalal Street opened on Monday (March 2), selling dominated and major indices slipped sharply. By 9:29 am, the S&P BSE Sensex fell 884.35 points to 80,402.84, while the NSE Nifty50 fell 267.45 points to 24,911.20. Sensex saw a fall of about 1,300 points in early trade. This is considered to be the biggest intraday fall of Nifty after February 1 and of Sensex after April 7, 2025.
Over the weekend, reports of coordinated attacks by the US and Israel on Iran and retaliatory missile and drone actions by Iran added uncertainty to global markets. The situation has escalated from limited skirmishes to active military warfare, causing investors to shy away from risk assets.
Meanwhile, in the commodity market, Brent crude jumped by more than 7% on Monday (March 2) to reach around $ 82.40 per barrel. Earlier it had touched a seven-month high of $72.8. According to media reports, Tehran has announced a blockade of shipping in the Strait of Hormuz. This route handles about 20% of the global oil supply and more than 40% of India’s crude oil imports go through this route. Any disruption is likely to lead to a supply crisis and further rise in prices.
Rising oil prices could increase inflation risks, pushing government bond yields higher. High yields reduce the attractiveness of equities. The rupee also weakened against the dollar in early trade.
According to experts, the uncertainty related to war in Western Asia will soon weigh heavily on the market. From the market point of view, the biggest risk is the energy risk arising from the rise in crude oil prices.
All 16 major sectoral indices remained in the red. Nifty small-cap fell 3.8% and mid-cap fell 3.4%. Oil marketing companies, paint, tyre, aviation and chemical stocks remained under pressure. Bharat Petroleum Corporation Ltd declined 3.5%, Hindustan Petroleum Corporation Ltd declined 2% and Indian Oil Corporation declined 4%.
Experts say if Brent remains above $80 or there is a serious disruption in Hormuz, the market will remain volatile. Limited retaliation could lead to another $5–10 per barrel increase, while a broader regional war could push prices above $100. At present, the biggest triggers for Indian markets remain the direction of crude oil and developments in the Middle East. Until there is clarity on oil supply and the regional situation, volatility is expected to continue.
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