The US-Israel war with Iran has been ongoing for one month as of March 28. On February 28, the US, along with Israel, launched a massive joint attack on Iran called Operation Epic Fury.
This attack came after failed nuclear negotiations between the US and Iran and rising concern over Iran’s nuclear program.
In this month-long military strike, Iran’s supreme leader, Ayatollah Ali Khamenei, who had led the country since 1989, was killed along with several senior leaders. Iran responded to these strikes with its ballistic missiles and drones targeting Israel and US military bases in Gulf countries.
Soon, the regional conflict was escalated in the Middle East region and became a global geopolitical crisis. The crucial oil shipping route, the Strait of Hormuz, which carries over 20 million barrels of crude oil per day, was closed down; several flights were cancelled and global stock markets were significantly impacted.
The US, Israel and Iran conflict caused significant volatility and downfall in the global stock markets, including India. Crude oil prices surged nearly 50% in the last month amid supply disruption concerns, while safe-haven assets like gold and silver saw unexpected declines.
Here is a brief overview of how different assets and benchmark indices performed over the last one month since the Iran war:
| Indices | February 27 close | March 28 close | Change* |
|---|---|---|---|
| NIFTY50 | 25,178 | 22,819 | ▼9.3% |
| SENSEX | 81,287 | 73,583 | ▼9.4% |
| NIFTY Bank | 60,529 | 52,274 | ▼13.6% |
| Dow Jones | 48,977 | 45,166 | ▼7.7% |
| S&P 500 | 6,878 | 6368 | ▼7.4% |
| Nasdaq | 22,668 | 20,948 | ▼7.5% |
*Change calculated based on Feb 27 and March 27 closing. February 28 was a market holiday.
As seen from the above table, major global and Indian indices have corrected sharply in the last one month since the start of the Iran war. NIFTY50 and SENSEX declined 9.3% and 9.4% respectively, while the NIFTY Bank index declined 13.6%. Over ₹40 lakh crore in market cap has been wiped out of the markets since February 27. Meanwhile, US markets like the Dow Jones, S&P 500, and Nasdaq are down between 7 and 8%.
Key factors behind the market fall
US, Israel and Iran war: Geopolitical tensions increased uncertainty across markets. Hence, investors usually avoid risky assets like stocks during such times.
Surge in crude oil prices: Oil prices have risen sharply due to supply concerns. Higher oil prices are negative for import-dependent countries like India as the rise increases inflation and impacts the overall economy, leading to weak market sentiments.
Rising bond yields: Both the US and Indian bond yields have gone up in the last few weeks. The yield on India’s 10-year G-Sec climbed to around 6.9%, which is the highest level since July 2024. When bond yields rise, fixed-income investments become more attractive compared to risky assets like stocks, causing money to shift out of stock markets.
Banking stocks under pressure: Among all the indices, the NIFTY Bank index has witnessed a steep decline of 13.6% as several bank stocks are under pressure, as rising bond yields reduce the value of government bonds held by banks, impacting their profitability. The NIFTY PSU Bank index is down 16% so far this month.
Consistent FIIs sell-off: High bond yields and a weak Indian rupee have triggered further selling by foreign institutional investors (FIIs). The Indian rupee breached 94 per dollar on March 27. The depreciation of the Indian Rupee against the US dollar reduces the overall return for foreign investors, driving them to reduce exposure. FIIs sold Indian equities worth ₹1.11 lakh crore in March.
How different assets performed in the last one month
| Assets | February 27 | March 28 | Change |
|---|---|---|---|
| Gold | $5278/ troy ounce | $4493/ troy ounce | 14.8% |
| Silver | $93.76/ troy ounce | $69.74/ troy ounce | 25.6% |
| Brent Crude | $73.2/barrel | $106.2/barrel | 45% |
| Indian Rupees | ₹91.02/dollar | ₹94.75/dollar | 4.0% |
| India 10-year bond yield | 6.66% | 6.93% | 4.0% |
| US Dollar Index | 97.33 | 99.98 | 2.7% |
*Change calculated based on Feb 27 and March 27 closing.
Gold and silver fall despite uncertainty: Safe-haven assets declined despite geopolitical crisis and market uncertainty as rising bond yields reduced the appeal of non-interest assets like gold. Besides this, the strong US dollar also made gold expensive for buyers with other currencies.
Ahead of the war, Gold and silver touched an all-time high in January 2026. Hence, investors must have booked profits after earlier gains. Silver prices declined over 25% as its demand is linked to industrial use, and a war-like situation generally weakens economic growth and demand.
US dollar Index strengthened: The US dollar rose in the past one month as investors moved to the US dollar as a safe-haven asset during global uncertainty. Higher US yields also supported the dollar rise.