Last Updated:
Sensex, Nifty declined as the risk appetite remained fragile amid the escalating U.S.-Israel war with Iran; What should investors do?
Sensex, Nifty declined as the risk appetite remained fragile amid the escalating U.S.-Israel war with Iran
Why Is Share Market Falling Today? Benchmark equity indices declined on Friday after a brief respite in the previous session, as persistent geopolitical tensions in West Asia, rising crude oil prices and continued foreign fund outflows weighed on investor sentiment.
Weak cues from US markets and a subdued trend across Asian equities further dampened risk appetite.
At around 11:00 am, the BSE Sensex was down 588.21 points, or 0.74%, at 79,427.69, while the Nifty 50 slipped 179.65 points, or 0.73%, to 24,586.25. Market breadth, however, remained positive, with 2,063 shares advancing, 1,265 declining and 177 remaining unchanged.
Most Nifty sectoral indices traded in the red, barring IT, metal and consumer durables. Broader markets showed resilience, with the Nifty Midcap 100 and Nifty Smallcap 100 remaining in the green.
Among Nifty50 constituents, ICICI Bank, Max Healthcare Institute and Bajaj Finserv were among the major laggards, falling up to 2%. Meanwhile, Reliance Industries and HCL Technologies were among the top gainers, rising up to 2.5%.
Key factors behind the market decline
1. Escalating geopolitical tensions
Investor sentiment remained fragile amid the ongoing conflict involving the United States, Israel and Iran. The conflict has raised concerns about potential disruptions to global energy supplies, which could push crude prices higher, reignite inflationary pressures and weigh on global growth.
“Persistent geopolitical tensions in the Middle East continue to keep crude oil prices elevated, raising concerns over renewed global inflationary pressures and the possibility of tighter monetary policy conditions,” said Ponmudi R, CEO of Enrich Money, in comments to Press Trust of India.
He added that global investors are likely to remain cautious in the near term as uncertainty persists.
2. Weak global cues
Asian markets were largely lower, with South Korea’s Kospi Index trading over 1% down. US equities had also ended lower in the previous session.
3. Continued FII outflows
Institutional investor activity in the market has shown a mixed trend so far this month.
Foreign institutional investors (FIIs) have remained net sellers. Month-to-date, FIIs bought shares worth Rs 46,773.32 crore but sold equities worth Rs 62,574.13 crore, resulting in a net outflow of Rs 15,800.81 crore.
Domestic institutional investors (DIIs), on the other hand, have provided support to the market. They purchased shares worth Rs 66,191.13 crore and sold equities worth Rs 40,375.72 crore, leading to a net inflow of Rs 25,815.41 crore.
On March 5, FIIs bought shares worth Rs 14,914.99 crore and sold Rs 18,667.51 crore, resulting in a net outflow of Rs 3,752.52 crore. DIIs bought Rs 18,821.10 crore and sold Rs 13,667.73 crore, leading to a net inflow of Rs 5,153.37 crore.
On March 4, FIIs purchased Rs 19,120.99 crore worth of shares but sold Rs 27,873.64 crore, resulting in a net outflow of Rs 8,752.65 crore. During the same session, DIIs bought Rs 26,259.37 crore and sold Rs 14,191.20 crore, recording a net inflow of Rs 12,068.17 crore.
Earlier, on March 2, FIIs bought equities worth Rs 12,737.34 crore and sold Rs 16,032.98 crore, leading to a net outflow of Rs 3,295.64 crore. DIIs bought Rs 21,110.66 crore and sold Rs 12,516.79 crore, resulting in a net inflow of Rs 8,593.87 crore.
Overall, the trend suggests that while foreign investors have been pulling money out of the market, domestic institutional investors have stepped in with strong buying support, helping stabilise stock prices.
4. Rising crude oil prices
Oil prices remained elevated as geopolitical tensions threatened supply routes. Brent Crude Oil surged nearly 5% on Thursday to a 20-month high of $86.28 per barrel and was trading around $84.4 per barrel in early trade on Friday.
VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said crude prices have risen about 16% since the conflict began, but the spike remains moderate compared with previous geopolitical crises.
“This indicates that global oil supply remains strong. Once the West Asian crisis de-escalates, crude prices could decline sharply and markets may recover,” he said.
However, he cautioned that oil prices will remain a key trigger for markets.
“As long as Brent crude trades around $85, markets may not see significant damage. But if prices surge above $90 and move towards $100, global markets could face pressure,” he added.
5. Banking stocks under pressure
Banking stocks also weighed on the market. The Nifty Bank Index declined around 1%, while the Nifty PSU Bank Index and Nifty Private Bank Index also slipped more than 1%.
Higher crude prices tend to push up inflation in an oil-importing country like India. Elevated inflation could delay potential interest rate cuts by the Reserve Bank of India, keeping borrowing costs higher and weighing on banking stocks.
Technical outlook
Anand James, Chief Market Strategist at Geojit Investments, said the Nifty may enter a phase of consolidation after reaching the previous session’s target.
“Having achieved yesterday’s objective of 24,840, consolidation is likely today. However, the formation of a morning star candlestick pattern suggests potential upside towards 25,000–25,150–25,480 in the near term,” he said.
He added that if the index fails to hold above 24,530, the bearish scenario could re-emerge, bringing 24,000–23,550 back into focus.
What should investors do?
According to Raj Gaikar, Research Analyst at SAMCO Securities, investors should remain cautious and disciplined during volatile phases.
“Investors should avoid panic selling but also refrain from aggressive bottom-fishing. Markets typically need time to absorb shocks before stabilising. Maintaining discipline, respecting stop-loss levels and waiting for clearer signals may prove more effective than rushing to buy the first dip,” he said.
Ajit Mishra, SVP, Research at Religare Broking Ltd, said investors should stay cautious in the current environment.
“In the current environment of heightened volatility, we reiterate our cautious stance and advise participants to remain selective while maintaining disciplined risk management when initiating fresh positions.”
Click here to add News18 as your preferred news source on Google.
Follow News18 on Google. Join the fun, play games on News18. Stay updated with all the latest business news, including market trends, stock updates, tax, IPO, banking finance, real estate, savings and investments. To Get in-depth analysis, expert opinions, and real-time updates. Also Download the News18 App to stay updated.
March 06, 2026, 12:49 IST
Read More
