Summary of this article
Sensex fell 961 points, Nifty dropped 1.25 per cent amid broad-based selling
Barring IT, all other major sectoral indices closed in red
Failed US-Iran talks, disappointing earnings guidance from Nvidia, caution ahead of India Q3 GDP data triggered the sell-off
Why Stock Market Fell Today: Domestic equity benchmarks, Sensex and Nifty 50, tanked in the final session of February, amid weak global cues and rising geopolitical tensions. The indices were pressured by all sectors, except IT.
The sell-off was broad-based as both the Nifty Midcap 100 and the Nifty Smallcap 100 closed over 1.10 per cent lower. Nifty 500, which represents more than 92 per cent of the free-float market cap of all the NSE-listed stocks, crashed about 1.20 per cent.
Meanwhile, India VIX, often referred to as the market’s fear gauge, surged nearly 4.90 per cent to 13.70 level, indicating that traders are turning cautious and are factoring in choppier moves in the days ahead as uncertainty builds.
Why Stock Market Fell Today
The broad-based sell-off in today’s session was triggered by a confluence of factors. Here’s a look at what weighed on the market.
No Breakthrough In US-Iran Talks
Talks between the United States (US) and Iran on the latter’s nuclear programme concluded on February 26 without a deal or any meaningful progress. The deadlock raised fresh concerns, and at a time when reports suggest that Washington is considering a possible military strike.
Sachin Gupta, vice president of research at Choice Broking, told Outlook Money, “The ongoing deadlock in US-Iran nuclear negotiations has heightened concerns over a broader Middle East conflict, increasing the risk of potential supply chain disruptions and commodity price volatility.”
Disappointing Earnings Guidance From Nvidia
Nvidia reported fourth-quarter revenue of $68.1 billion for the period ended January 25, 2026, up 73 per cent from a year ago and 20 per cent higher than the previous quarter. The numbers came in comfortably ahead of Street estimates, according to several media reports.
However, what unsettled investors was the company’s guidance for the current quarter. Nvidia has projected first-quarter fiscal 2027 revenue of around $78 billion, plus or minus 2 per cent. The company also clarified that its outlook does not factor in any data centre revenue from China, reflecting the continued effect from US export restrictions on advanced chip sales to the country.
As a consequence, Nvidia's shares on Nasdaq fell
The weakness was largely triggered by a global risk-off sentiment following disappointing earnings guidance from Nvidia, Gupta said, which led to a sell-off in global technology stocks and cooled the AI-driven momentum on Wall Street. “The ripple effect was visible across emerging markets, including India,” he added.
Caution Ahead Of India Q3 GDP Data
Investors were also cautious ahead of the release of the closely-tracked India’s gross domestic product (GDP) data for the quarter ended December 2025 (Q3).
Gupta said, “Sectorally, the decline was amplified by index heavyweights such as HDFC Bank and Bharti Airtel, both falling around 2 per cent, as investors trimmed positions ahead of the closely-watched India Q3 GDP data release.”
The Q3 GDP data, however, released post market hours today. According to data released by the Ministry of Statistics and Programme Implementation (MoSPI), India’s GDP grew 7.8 per cent year-on-year in Q3FY26. In sequential terms, growth slowed when compared with the previous quarter. In absolute terms, real GDP was estimated at Rs 84.54 lakh crore in Q3, up from Rs 78.41 lakh crore in the corresponding quarter last year. For the full financial year FY26, real GDP growth has been estimated at 7.6 per cent.
Weak Global Cues
The US stock market closed largely lower on February 26 overnight. The tech-heavy Nasdaq index fell 1.18 per cent, dragged by the heavyweight Nvidia. The S&P 500 index too slipped 0.54 per cent, while the Dow Jones closed flat-to-positive.
Asian markets, were, on the other hand, mixed. While South Korea's Kospi declined 1 per cent, China's CSI 100 fell 0.41 per cent, Japan's Nikkei 225 closed 0.16 per cent higher, and the Hong Kong-based Hang Seng settled 0.95 per cent up.
All Major Sectors End In Red, Barring IT
Ironically, except for IT, every other major sectoral index ended the day in the red. Consumer durables and media indices did manage to buck the trend and close with gains. However, these are relatively smaller pockets within the market and did little to offset the overall weakness seen across heavyweight sectors.
Nifty IT, which has been on a continuous downtrend and has fallen more than 20 per cent in February, managed to end in the green, rising 0.16 per cent to settle at 30,603.85. The index extended gains for the third consecutive session after witnessing five straight days of meltdown.
