The key equity benchmarks traded with major losses in the early afternoon as investors reacted to escalating tensions in the Middle East, with reports of intensified U.S.'Israeli strikes on Iran prompting a sharp rise in crude oil prices and triggering risk‑off sentiment that led Indian markets to fall over 1%.

The Nifty traded below the 24,850 mark. Auto shares declined for second consecutive trading sessions.

At 11:30 ST, the barometer index, the S&P BSE Sensex, plunged 1,261.10 points or 1.55% to 80,026.18. The Nifty 50 index slipped 348.50 points or 1.38% to 24,830.15.

The broader market, the BSE 150 MidCap Index declined 1.45% and the BSE 250 SmallCap Index tanked 1.99%.

The market breadth was weak. On the BSE, 693 shares rose and 3,387 shares fell. A total of 204 shares were unchanged.

The NSE's India VIX, a gauge of the market's expectation of volatility over the near term, zoomed 16.05% to 15.90.

Middle East Tension:

Middle East tensions escalated sharply following unconfirmed reports that Iran's Supreme Leader Ali Khamenei may have been killed in joint U.S.'Israeli strikes on Tehran, although Iranian authorities have not issued any official confirmation. Media outlets also cited remarks attributed to Donald Trump claiming that several Iranian leaders were killed in ongoing operations, but these assertions remain independently unverified. Social media speculation pointed to Ayatollah Arafi as a possible interim successor, without credible confirmation. Meanwhile, reports indicated that Iran launched missiles toward Israel and other regional locations, heightening concerns of a broader regional conflict.

Buzzing Index:

The Nifty Auto index fell 2.09% to 27,569.40. The index declined 3.91% in the previous two consecutive trading session.

Samvardhana Motherson International (down 3.4%), Maruti Suzuki India (down 3.1%), Uno Minda (down 2.88%), Sona BLW Precision Forgings (down 2.57%), Exide Industries (down 2.42%), Tata Motors Passenger Vehicles (down 2.39%), Bajaj Auto (down 2.33%), Bosch (down 2.14%), Hero MotoCorp (down 1.82%) and Bharat Forge (down 1.74%) declined.

Stocks in Spotlight:

Tata Motors Passenger Vehicles fell 2.51%. The company has recorded total sales of 63,331 units in February 2026, registering a robust 35% YoY growth over 46,811 units in sold February 2025.

Paras Defence and Space Technologies rallied 11.60% after the company announced the incorporation of a new subsidiary, Paras Semiconductors.

The newly incorporated entity, registered in India on 27 February 2026, will focus on setting up an advanced heterogeneous packaging and 3D packaging OSAT facility. The unit will cater to high-growth segments such as artificial intelligence, high-performance computing, networking and data center applications.

Global Markets:

Asian markets traded lower on Monday after the United States and Israel launch their most ambitious attacks on Iran in decades, killing Supreme Leader Ayatollah Ali Khamenei.

U.S. and Israeli strikes, and the Iranian retaliation, have sent shockwaves across the Middle East and through sectors from shipping to air travel to oil on warnings of rising energy costs and disruption to business in the Gulf, a strategic waterway and global trade hub.

Most Gulf equities fell on Sunday, though Boursa Kuwait suspended trading and the UAE ordered its stock markets closed on Monday, a sign of the growing economic disruption sweeping the Gulf.

Oil futures initially jumped 8% before trimming gains to about 4%. West Texas Intermediate futures last traded at $69.68, while Brent crude was at $76.13 per barrel. Gold futures jumped 2.3% as investors piled into the global safe haven.

Stock futures tumbled in overnight trading after the weekend strikes in Iran. Futures on the Dow Jones Industrial Average dropped 517 points, or 1%. S&P 500 futures lost 1%, and Nasdaq 100 futures declined a little more than 1%.

On Friday, stocks saw a sharp sell-off after the latest producer price index data came in much hotter than expected, adding sticky inflation to a list of concerns that has caused market turbulence this month.

The Dow Jones Industrial Average dropped 521.28 points, or 1.05%, to close at 48,977.92. The S&P 500 closed down 0.43% at 6,878.88, while the Nasdaq Composite lost 0.92% to settle at 22,668.21.

The S&P 500 and Nasdaq finished in the red for February amid growing fears about the impact of artificial intelligence on specific industries and the overall economy.

Fueling the downbeat sentiment, January's producer price index, a measure of wholesale inflation, showed a 0.5% increase for the month. Media reports had suggested that the headline reading could come in at 0.3%. The core PPI reading, which excludes food and energy prices, recorded a 0.8% gain, much more than the 0.3% rise that was widely reported in the media.

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