What Iran War Means For Markets And Your Investments

Equity markets across the globe started saw a broad-based sell-off on Monday, March 2, 2026 after the Iran war escalated over the weekend. So did India’s equity markets. Openieng with a huge gap-down, both the benchmark indices – Sensex and Nifty 50 – ended the session deep in the red. The BSE Sensex started with a gap-down of 2,743.46 points, or 3.37 per cent at 78,543.73. However, after a volatile session, the 30-share benchmark index managed to pare some losses and closed at 80,238.85, down 1,048.34 points, or 1.29 per cent. Similarly, the NSE Nifty 50 plunged as much as 575.15 points, or 2.28 per cent, to hit an intraday low at 24,603.50. Mirroring Sensex, the 50-share benchmark index, too, recovered losses partially and settled at 24,865.70, down 312.95 points, or 1.24 per cent.

The sell-off was broad-based as the Nifty Midcap 100 closed lower by 1.58 per cent and the Nifty Smallcap 100 ended 1.75 per cent in the red. Nifty 500, which represents more than 92 per cent of the free-float market capitalisation of all NSE-listed stocks, also ended 1.43 per cent down.

The weakness was visible across sectors. The auto, oil & gas and consumer durables indices declined over 2 per cent each. Financial counters, which carry significant weight on the benchmarks, also came under pressure, with the PSU bank and financial services indices ending more than 1 per cent lower. Realty stocks slipped amid cautious sentiment, while IT shares too closed in the red. Defensives, too, were under pressure, as FMCG index closed 0.76 per cent lower, while pharma and healthcare settled near flat levels.

Iran War: What Happened

In one of the most dramatic developments in West Asia’s geopolitics in decades, the United States (US) and Israel on February 28 launched a coordinated military strikes across Iran targeting military installations, nuclear sites, and key compounds of Iranian leaders.

According to reports, the offensive, dubbed as Operation Epic Fury by the United States and Operation Lion’s Roar by Israel, struck hundreds of targets across Iran. The sheer scale of the action makes it one of the largest military operations seen in the region in recent years.

The coordinated strikes reportedly killed Iran’s Supreme Leader, Ayatollah Ali Khamenei, who had been in power since 1989. Iranian state media also confirmed that Khamenei died in a strike targeting his compound in Tehran.

Iran responded with retaliatory attacks on US military bases across several West Asian countries, raising fears of a wider regional conflict. The US has indicated that the attacks may continue. “We are going to destroy their missiles and raze their missile industry to the ground. It will be totally, again, obliterated,” US President Donald Trump said in a video address posted on his Truth Social platform from his Florida home in West Palm Beach, Florida.

This is a developing story...