Nifty down 5% amid US-Iran war: Where to invest now?
What's the story
The Indian stock market has witnessed a nearly 5% decline since the start of the US-Iran war. Today's trading session saw Sensex and Nifty 50 fall over 1% each, with banking, financial services, and auto stocks leading the losses. The Sensex fell over 1,000 points or about 1.3%, hitting an intraday low of 77,161 while Nifty50 fell by 1.2% to hit a day's low of 23,971.
Market impact
Oil prices have remained well below $90
Oil prices have remained well below $90 today after nearly hitting $120 on Monday. Such fluctuations have been shaking global financial markets due to fears that the war could disrupt the supply of oil and natural gas for a long time. However, support from the G-7 nations asking the International Energy Agency (IEA) to prepare plans for an emergency release of oil reserves has eased supply pressures.
Investment strategy
Geojit advises investors to stay invested
VK Vijayakumar, Chief Investment Strategist at Geojit Investments, has said that history shows wars and geopolitical tensions usually have a temporary impact on markets. He advised investors to stay invested and continue with systematic investment as corrections triggered by such events can create attractive buying opportunities in sectors with strong growth prospects.
Market resilience
Axis Asset Management echoes Geojit's sentiment
Axis Asset Management has also echoed this sentiment, noting that geopolitical crises have often tested market sentiment but rarely changed the long-term trajectory of Indian equities. The firm advised investors not to exit equities during periods of panic as those who sold during previous geopolitical crises often missed the subsequent market recovery.
Portfolio strategy
ICICI Direct recommends positioning portfolios around domestic demand-driven sectors
Kotak Investment Advisors has advised investors to tilt their portfolios toward sectors that are more resilient during volatile global conditions. The firm suggested rebalancing portfolios toward domestic-oriented sectors and companies with strong balance sheets, pricing power, and demand visibility. ICICI Direct also recommended positioning portfolios around domestic demand-driven sectors such as banks, infrastructure capital goods cement automobiles discretionary consumption which are less exposed to global shocks.