Summary of this article
Sensex and Nifty opened sharply lower as crude oil prices surged and US-Iran tensions escalated
Auto, IT and realty stocks led losses, while PSU banks gained
Higher US yields and weak global markets added to selling pressure
Benchmark indices started with a huge gap down on September 2, 2026, as a sudden spike in crude oil prices, higher US Treasury yields and growing US-Iran tensions weighed on investor sentiment.
The NSE Nifty 50 started 197.80 points, or 0.82 per cent, lower at 23,858. Likewise, the BSE Sensex opened with a gap down of 472.96 points, or 0.61 per cent, at 76,471.32.
Broader markets also mirrored benchmarks and slid, with the Nifty Midcap 100 falling over 1 per cent, and the Nifty Smallcap 100 tumbling around 0.85 per cent. Nifty 500, which tracks more than 92 per cent of the free-float market cap of all NSE-listed stocks, also fell over 1 per cent.
Among Nifty 50 stocks, auto and crude-sensitive counters led the losses. Eicher Motors fell over 4 per cent, while Bajaj Auto declined 2.80 per cent. InterGlobe Aviation, the parent company of IndiGo, fell around 2.50 per cent and Asian Paints dropped over 2 per cent. Shriram Finance, Mahindra & Mahindra, Grasim Industries and Bharat Electronics also traded lower.
Coal India was the top gainer on the index, rising over 4 per cent. Adani Ports gained 1.33 per cent, while Adani Enterprises, NTPC, ONGC and Power Grid rose between 0.30 per cent and 0.80 per cent, limiting the decline in the benchmark.
Nifty Auto, Nifty Realty and Nifty IT were the top sectoral laggards, falling between 1 per cent and 2 per cent. Nifty PSU Bank was the only sectoral index trading in the green, while all other sectoral indices were in the red.
Nifty Bank, which tracks the 14 largest and most liquid banking stocks, fell 0.50 per cent to trade around the 57,100 level.
Crude Oil Prices Rise As US-Iran Tensions Escalate
Crude oil prices extended their gains on September 2 as fresh US strikes on Iran raised concerns over supply disruptions and further escalation in West Asia.
Brent crude oil futures jumped over 0.83 per cent to trade at $95.44 a barrel, while the US West Texas Intermediate (WTI) crude oil futures rose to $90.69 per barrel, up by 0.52 per cent.
The rally was followed by a jump of 4.60 per cent in Brent and 5.20 per cent in WTI in the September 1 session.
The latest escalation has renewed concerns over oil supplies through the Strait of Hormuz, a key shipping route for crude from West Asia. Any prolonged disruption could tighten global supplies and push oil prices higher.
Rising Fed Rate Hike Bets
The US 10-year Treasury yield rose to around 4.80 per cent as expectations of tighter US monetary policy grew. According to the Chicago Mercantile Exchange’s (CME) FedWatch Tool, markets are now pricing in a 70.2 per cent chance of a 25-basis-point rate hike at the US Federal Reserve’s meeting in two weeks.
Higher US yields could weigh on Indian equities as they make US assets more attractive and may prompt foreign investors to reduce their exposure to emerging markets such as India.
Global Markets Turn Weak
Asian markets were also subdued in morning deals. Japan's Nikkei 225 was down nearly 3 per cent, South Korea's Kospi was trading lower by 3.40 per cent, China's CSI 300 slipped 1.25 per cent, the Hong Kong-based Hang Seng was down nearly 1 per cent, and Taiwan's Taiex traded 1.50 per cent lower.
Wall Street ended lower overnight as a global selloff in bonds deepened and crude oil prices surged. The Nasdaq Composite fell 1.03 per cent, while the Dow Jones Industrial Average declined 0.79 per cent. The S&P 500 lost 0.71 per cent.
