Post-Market, 2 March 2026: Why Markets Fell Today?

Indian benchmarks registered a sharp fall on Monday. Rising tensions in West Asia sparked a broad selloff across sectors. More than ₹6 lakh crores in investor wealth was wiped off in a single session. At the closing bell:

• The Sensex closed 1,048 points down, or 1.29%, at 80,238.85

• The Nifty 50 settled at 24,865.70, losing around 313 points, or 1.24%

Market capitalisation of BSE-listed companies fell to ₹457 lakh crores from ₹463.50 lakh crores in the previous session.

What Contributed To The Fall?

Several factors contributed to the fall. These include:

1. US-Iran War

The immediate contributor to the fall was the ongoing conflict in the Middle East between Iran and the US and its ally, Israel. There were fears that it might spread beyond the region. Note that Iran launched missiles across US bases after the killing of its supreme leader and other senior officials. There were concerns about broader instability in the region.

2. Increase Crude Oil Prices

Oil prices witnessed a sharp jump. Crude futures surged more than 8% on Monday. Brent crude climbed above $82 during the session. On the other hand, West Texas Intermediate touched $75 a barrel.

For India, a sustained rise in oil prices can increase input costs. It also widens the current account deficit. This sentiment is likely to have spooked investors.

3. Weakening Rupee Against USD

The Indian rupee weakened past the 91 mark against the US dollar for the first time in a month. According to PTI, the domestic currency settled 44 paise lower at 91.52 (provisional). The fall came amid higher oil prices and geopolitical uncertainty.

Currency traders said a weaker rupee adds to pressure on importers and companies with foreign currency exposure. It can also accelerate foreign capital outflows as global investors seek safer assets during periods of volatility. It added to the negative sentiment in equities during the session.

4. FIIs Extending Selling Streak

Foreign institutional investors (FIIs) continued to pare exposure to Indian equities. In February, FIIs sold shares worth ₹11,002 crores in the cash segment. This is the eighth consecutive month of their net selling in the cash market.

The persistent outflows have capped upside in benchmarks even during periods of strong domestic data. Traders pointed to renewed foreign selling on Monday as one of the reasons for markets to fall.

Also Read - Dollar Rallies, Euro Slips as Iran Conflict Sparks Oil Surge

What Does It Mean For Investors?

The events show how external shocks can impact domestic markets. Given the ongoing situation, markets are expected to remain volatile in the coming days. Industry watchers feel one should exercise patience and focus on asset allocation during these times. Any knee-jerk reactions could turn notional losses into actual ones.

Sources

Business Standard

Livemint