The escalating US-Israel-Iran conflict in the Middle East, which intensified in early March 2026 with major strikes on Iranian targets, has severely rattled Indian stock markets. Crude oil prices surged sharply, hitting a 20-month high of $87.66 per barrel for Brent, amplifying fears for oil-import dependent India.
Conflict Escalation Overview
A joint US-Israeli air campaign targeted Iranian military, nuclear, and leadership sites starting late February, killing Supreme Leader Ali Khamenei and degrading capabilities across 26 provinces. Iran retaliated with strikes on populated areas and possibly closed the Strait of Hormuz, raising global supply disruption risks. By March 12-13, operations continued against internal security targets amid no signs of regime collapse.
Market Performance This Week (March 6-13)
Indian benchmarks extended losses, with Nifty and Sensex on track for their worst weekly drop in about 15 months due to war jitters. Nifty Bank fell 11% since the war’s start, while broader indices like Nifty dropped over 1% on key days, closing around 24,450 by March 6 after a 1.27% single-day plunge. For the prior week (ending March 6), Nifty lost 2.89% weekly, with Bank Nifty down 4.54%.
