While markets had already entered 2026 on a weak note, the escalation in the Iran-Israel/US conflict has further tightened the bears’ grip on Dalal Street. Since the beginning of the US-Iran war, the total market capitalisation of BSE-listed companies has eroded by over 9%, or around ₹41 lakh crore, highlighting the broad-based sell-off triggered by global uncertainty.
The market capitalisation of BSE-listed firms fell to ₹422 lakh crore as of March 27, down from ₹463 lakh crore on February 27, 2026.
VK Vijayakumar, Chief Investment Strategist at Geojit Investments, believes that this correction has brought Nifty valuations down to fair levels, with the index now trading at around 19 times earnings, below its 10-year average of 22.4 times. However, he cautioned that if India’s macroeconomic fundamentals are hit by the ongoing energy crisis, valuations could fall further as markets begin to price in a potential earnings slowdown in FY27.
“In brief, everything boils down to how long the war will last,” Vijayakumar said.
He also indicated that India’s economy remains resilient enough to absorb the shock if the war ends soon, crude oil prices cool off, and gas supplies normalise. However, if the conflict drags on, oil stays elevated for months, and gas availability remains constrained, the pressure on India’s macroeconomic environment could become significant and markets may continue to reflect that risk.
What should be your strategy?
As markets wobble under the weight of geopolitical uncertainty, rising crude prices and global risk aversion, investors are once again facing the question that tends to surface during every sharp correction: what should be the strategy now?
Amid the anxiety, market experts believe this is not a time for emotional decisions. Instead, they argue that investors need to separate short-term turbulence from long-term wealth creation and recalibrate portfolios based on changing global realities.
“Your investment portfolio is a Test match. The 10% correction you are staring at right now is a difficult spell of fast bowling – the pitch is doing a bit, the ball is swinging, and the scoreboard pressure is real. But here is the critical insight: the match is far from over,” WhiteOak Capital noted in a recent report.
The fund house argued that investors who panic-sell during corrections are effectively treating long-term portfolios like short-term trades. According to WhiteOak, disciplined investors should instead focus on fundamentals, stay patient and avoid reacting impulsively to volatility.
Moreover, a report by Phillip Capital took a more tactical view, noting that investors and asset classes have already started repositioning amid a broader global reset shaped by geopolitical realignments and structural themes like artificial intelligence. The brokerage maintained that while the US-Israel-Iran conflict remains a short-term overhang for Indian equities, the disruption is currently expected to remain temporary rather than structural.
It also viewed the current correction as a buying opportunity, assuming there is eventual normalisation in the Middle East even if the conflict remains prolonged. It has already rearranged its model portfolio, increasing exposure to capital goods, defence, banks and staples, while reducing allocations to autos, IT, oil & gas and pharma.
Pranay Aggarwal, Director and CEO of Stoxkart, belieevs that although long-term fundamentals for quality domestic-facing businesses remain intact, the current backdrop of elevated energy costs, stagflation risks and lack of immediate de-escalation signals calls for a defensive strategy centred on capital preservation.
For investors, the message is that this is not the time for panic selling, but neither is it a phase for blind risk-taking. In other words, this is not a market to fear blindly—but it is certainly one to navigate with discipline.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
