Benchmark market indices plunged in early trade on Friday after the United States carried out airstrikes on key nuclear facilities in Iran. This has triggered fresh geopolitical uncertainty and rattled investor sentiment worldwide.
At around 9:19 am, the BSE Sensex was down 580 points, trading at 81,828.11, while the NSE Nifty50 fell over 175 points to 24,937.25. Broader market indices mirrored the slide, and volatility indicators jumped sharply, signalling a bumpy trading session ahead.
Among the hardest-hit were IT stocks, with Infosys, TCS, HCLTech, and Shriram Finance among the top losers. Global growth concerns and rising geopolitical instability weighed heavily on the sector.
In contrast, oil and energy stocks found some footing, buoyed by a spike in crude oil prices to a five-month high following the strikes. The market’s sharp reaction underscores investor anxiety about potential supply disruptions in the Gulf region, especially if tensions escalate further.
NOT IN FULL PANIC MODE YET
Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said that while the US bombing marks a serious escalation in West Asia, markets are still not in full-blown panic mode.
“Even though the US bombing of Iran’s three nuclear facilities has worsened the crisis in West Asia, the impact on the market is likely to be limited,” Vijayakumar said.
“The uncertain factor now is the timing and nature of the Iranian response. If Iran targets and damages US defence facilities or harms American personnel, the fallout could be more severe. But for now, the market seems to believe that there are limits to how far Iran can retaliate.”
According to him, despite the rise in crude prices and elevated tensions, the absence of panic in Asian markets and the muted reaction of US futures suggest that investors are still hoping for restraint from both sides.
He also dismissed the possibility of a full closure of the Strait of Hormuz — a vital oil supply route — as largely unlikely, noting that such a move would hurt Iran and its allies more than the US or Europe.
WHAT SHOULD INVESTORS DO?
Amid the volatility, experts suggest that long-term investors stay calm and avoid knee-jerk reactions.
“The market construct continues to favour a ‘buy on dips’ strategy,” Vijayakumar noted, pointing out that geopolitical shocks typically cause short-term turbulence but rarely derail long-term fundamentals — unless they lead to a sustained conflict.
Analysts also recommend sticking with high-quality stocks, maintaining adequate liquidity, and avoiding leveraged bets. For those with a low risk appetite, it may be wise to wait for signs of stability before making fresh allocations.
IT stocks may remain under pressure if global risk sentiment worsens, while energy and defence-linked sectors could see near-term tailwinds. Investors are advised to closely watch for signals from the US and Iran over the coming days.
Outlook
While the full impact of the US-Iran escalation is yet to unfold, markets are clearly on edge. For now, investors will be closely tracking diplomatic developments and any signs of a retaliatory strike by Iran.
Unless the conflict deepens or oil supply chains are visibly disrupted, most experts believe the correction could be short-lived — offering opportunities for patient, long-term buyers.
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