Indian Stock Market Plummets Amid West Asia Conflict

The Indian stock market saw a sharp decline on Monday as it reopened following the outbreak of conflict in West Asia. The Sensex dropped over 960 points, while the Nifty fell below 24,900. Investors faced significant losses, with major Asian indices also experiencing downturns. The geopolitical tensions stem from a joint US-Israeli operation against Iran, which has led to retaliatory threats from Tehran. This situation has raised concerns about regional security and market stability, prompting a spike in market volatility. Read on for a detailed analysis of the market's response and the unfolding international events.

By Narendra Chaudhary Mar 2, 2026, 10:46 IST

Market Reaction to Geopolitical Tensions

On Monday, the Indian stock market experienced a significant decline as it reopened for trading following the onset of conflict in West Asia over the weekend.

By 10:10 AM, the benchmark Sensex index had dropped by over 960 points, equating to a 1.2% decrease. The Nifty index also fell by 1.1%, dipping below the 24,900 threshold.

Investors faced a staggering loss of approximately Rs 8 lakh crore at the market's opening, although there was a slight recovery in the benchmark indices shortly thereafter, as reported by a financial news outlet.

Other major Asian stock markets also saw declines on Monday morning, with Hong Kong's Hang Seng index falling around 1.5% at the same time.

Japan's Nikkei index decreased by 1.4%, while South Korea's Kospi index fell by 1%.

The India VIX, which gauges market volatility, surged by over 17% by 10:10 AM on Monday.

At that time, the Indian rupee had weakened to 91.3 against the US dollar, down from 91.08 at the previous close on Friday.

The escalation began on Saturday when Israel and the United States initiated a joint operation targeting Iran, aiming to undermine the Iranian government's capabilities. In response, Iran claimed that the US-Israeli operation commenced while nuclear negotiations were ongoing.

This military action heightened existing tensions among the three nations regarding Tehran's nuclear ambitions. The US has historically acted as a security guarantor for Israel, which has expressed concerns that Iran is nearing the capability to develop a nuclear weapon, potentially destabilizing regional security.

Iran has consistently asserted that its nuclear program is intended for peaceful purposes.

However, with the threat of a military strike looming, particularly due to a significant US military presence near its shores in recent months, Tehran has been compelled to re-engage in discussions with Washington regarding its nuclear program.

On Sunday, Iranian Supreme Leader Ayatollah Ali Khamenei was reportedly killed during the US-Israeli military operation. In retaliation, Tehran vowed to seek revenge and launched missiles at Israel and other Gulf nations as part of a counteroffensive.

Khamenei, who had been in power since 1989, held authority over all government branches and the military.