Indian equity markets witnessed a sharp risk-off session on March 2, 2026, as escalating tensions in the Middle East triggered heavy selling across sectors. A spike in crude oil prices amplified volatility, pressuring energy-sensitive segments and dragging benchmark indices decisively lower.
Index performance
Sensex declined 1,048.34 points (1.29%) to close at 80,238.85.
Nifty 50 fell 312.95 points (1.24%) to settle at 24,865.70.
Nifty Bank dropped 689.35 points (1.14%) to 59,839.65.
Nifty IT slipped 330.90 points (1.08%) to end at 30,272.95.
Both benchmark indices fell over 2% intraday before trimming part of the losses by the close.
Broad-based weakness
The sell-off was widespread rather than index-specific. Within the Nifty 500 universe, 439 stocks closed in the red, highlighting strong negative breadth.
Broader markets also remained under pressure. The Nifty Midcap 150 declined 1.7%, while the Nifty Smallcap 250 fell 1.9%.
Except for Nifty Metal and Nifty Pharma, all major sectoral indices ended lower. Nifty Consumer Durables and Nifty Oil & Gas emerged as the worst-performing sectors.
Key market drivers
Crude oil surge: India, being a major oil importer, remains sensitive to rising energy prices. Crude futures climbed sharply, hitting ₹6,596 per barrel, intensifying inflation concerns and weighing on equities.
Geopolitical escalation: The Middle East conflict entered its third day with no signs of de-escalation, disrupting global supply sentiment and triggering a shift toward safe-haven assets.
FII selling pressure: Persistent selling by Foreign Institutional Investors, which has continued for eight consecutive months, added to downside pressure in domestic equities.
Commodities & currency update
Gold (MCX, April 2, 2026) surged to ₹1,68,715, rising ₹6,611 (4.08%) as investors sought safety.
Silver (MCX, March 5, 2026) jumped to ₹2,86,935, gaining ₹11,937 (4.34%).
The Indian Rupee depreciated to around 91.30 against the US dollar, marking its weakest level in several weeks.
Policy update
In the latest federal budget, the government retained the 30% tax on cryptocurrency gains and the 1% withholding tax. New penalty provisions for non-compliance in reporting digital asset transactions will take effect from April 1, 2026, tightening regulatory oversight.
Market takeaway
Monday’s decline reflects a geopolitical-driven risk-off reaction, amplified by rising crude prices and continued FII outflows. The broad participation in the sell-off, along with weakness in midcaps and smallcaps, indicates cautious investor positioning amid elevated global uncertainty.
Source: Livemint, Moneycontrol, Google Finance
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