Expert Cautions After Market Crashes Amid Worsening West Asia Conflict

New Delhi, March 9: The Indian stock market experienced a severe sell-off on Monday, with benchmark indices crashing nearly 3 per cent as a result of soaring crude oil prices and worsening of the conflict between the United States, Israel and Iran.

Around 10:45 am, the Sensex was down by 2,130.72 points, while the Nifty had declined by about 677 points. Experts say the market reflects the effects of the war as its repercussions have begun to reach ordinary people.

Analysts are advising investors not to see the current fall as a buying opportunity. They suggest waiting for the situation to stabilise before looking for the right levels to enter the market again.

The sell-off was not limited to the Sensex and Nifty. Weakness was visible across the broader market as well. Data from the Bombay stock exchanges showed that nearly 75 per cent of BSE-listed stocks were trading in the red, and more than 200 stocks hit their lower circuit limits.

The extent of the fall was such that around 728 stocks touched their 52-week lows. By about 11 am, trading activity was recorded in nearly 4,177 stocks on the BSE.

A few pockets of strength were also seen. It was mainly in defence and oil and gas stocks. Even so, market experts believe this uptick may not last long. According to them, the gains appear to be driven largely by market sentiment and could fade quickly if conditions change. Given the uncertainty, investors are being advised to proceed with caution and think carefully before making fresh investments.

‘Difficult To Identify Bottom’

Share Market expert Ambareesh Baliga told ETV Bharat that the current situation is marked by deep uncertainty, and markets typically react negatively in such times.

“When ordinary life and public safety come under threat, it naturally raises concerns among investors and that anxiety is now visible in the markets,” he added.

On how far the markets could fall, Baliga said it is extremely difficult to identify a bottom in such an environment. He noted that this is not the usual kind of uncertainty faced by markets and carries a potential threat to civilian life, which makes investors react more cautiously. Such tensions can also have ripple effects across several businesses and sectors, he said.

‘Wait and Watch’

On a sectoral basis, Baliga noted that oil and gas and defence stocks may continue to see some positive sentiment for now, but these gains are largely sentiment-driven.

If the conflict continues to escalate, the broader market, he said, could remain under pressure. “On the other hand, if there is a diplomatic resolution to the crisis, the current market assumptions may quickly change,” said Baliga.

He added that investors should adopt a wait-and-watch approach for now, as the situation is still unfolding and clarity is lacking. He said that until last week, he considered the market correction a buying opportunity on dips. However, with reports of civilian targets now emerging, his view has turned more cautious.

“In my opinion, this is no longer a ‘buy on dips’ situation and investors would be better off waiting for conditions to stabilise before making fresh investment decisions,” he said.

Broadly share market was under pressure last week as well. On Friday, Sensex tumbled 1.37 per cent to settle at 78,918. The Nifty dropped 1.27 per cent to end at 24,450. Last week, BSE tanked 2,368.29 points or 2.91 per cent, and the Nifty declined 728.2 points or 2.89 per cent.