Indian stock markets recorded a sharp decline on Monday due to escalating tensions in West Asia. US and Israel strikes on Iran caused crude oil prices to surge, heightening investor caution. Iran has closed the Strait of Hormuz, potentially disrupting global oil supplies.
The escalation of conflict in West Asia shook global markets on March 2, 2026. US and Israel strikes on Iran resulted in the death of Tehran's Supreme Leader Ali Khamenei, deepening uncertainty. Iran announced the closure of navigation through the Strait of Hormuz, through which nearly 20 percent of global oil flows and over 40 percent of India's crude imports pass.
Consequently, Brent crude oil surged more than 7 percent on Monday to $82.40 per barrel, its highest level in 14 months. Experts indicate that prices could reach $100 per barrel if the situation worsens. This poses concerns for countries like India, which sources 50 percent of its total oil imports via this route.
The impact rippled through Indian stock markets. As of 9:15 a.m. IST, the Nifty 50 was down 2.06 percent at 24,659.25, while the BSE Sensex fell 3.38 percent to 78,543.73. This marked the steepest intraday drop for Nifty since February 1 and for Sensex since April 7, 2025. All 16 major sectors posted losses, with small-cap and mid-cap indices declining 3.8 percent and 3.4 percent, respectively. Shares of oil marketing, paint, tyre, aviation, and chemical companies were hit hardest.
The rupee depreciated against the dollar, and government bond yields rose. In the pre-open session, Gift Nifty was down 166 points, signaling a potential Nifty drop of over 150 points. Markets had already fallen on Friday, with Sensex closing 961 points lower and Nifty 317 points down. Investors are shifting toward safe-haven assets.
