Indian stocks to sink on global meltdown; Nikkei, Korea plunge over 7%

Indian stocks are staring at a weak opening on Monday as there is no end in sight to the West Asia crisis, which is triggering widespread risk-off sentiment with crude oil surging past $100 per barrel. With Iran, Israel, and the US hardening their stances, global investors are reeling as the economic fallout appears bigger than earlier perceived.

Equities across the Asia-Pacific region are down sharply, with Japan’s Nikkei plunging around 6–7 per cent in recent sessions and Korea’s Kospi dropping up to 8 per cent on certain days amid the conflict. Amidst the turmoil, Gift Nifty is indicating a gap-down opening for the Nifty, pointing to cautious sentiment.

Indian equity markets are expected to open on a cautious note as persistent geopolitical tensions in West Asia continue to keep crude oil prices elevated and global risk sentiment fragile. “Investor confidence remains guarded following last week’s sharp correction across global and domestic equity markets. While steady inflows from Domestic Institutional Investors (DIIs) are providing a key support base and partially offsetting selling pressure from Foreign Portfolio Investors (FPIs), the broader market mood remains defensive,” said Ponmudi R, CEO of Enrich Money.

In the near term, the market is likely to remain volatile and range-bound with a downside bias unless geopolitical tensions ease, crude oil prices stabilise, or supportive macroeconomic triggers emerge to restore investor confidence, he added.

According to Kotak Securities, India faces elevated exposure to this disruption, with an estimated 50–55 per cent of its crude oil and LNG imports transiting the Strait of Hormuz. Strategic petroleum reserves cover only ~8–9 days of oil demand, and there are no comparable strategic reserves for natural gas. If the disruption persists beyond the very short term, supply-side stress will intensify rapidly. We expect gas supplies to be rationed in the near term.

Dr Manoranjan Sharma, Chief Economist at Infomerics Ratings, said Indian equity markets have already responded with risk-off sentiment. Benchmark indices are expected to open lower, accompanied by heightened volatility as investors reassess geopolitical and commodity-related risks. “A short-term correction of approximately 1–1.5 per cent is possible, with sectors such as automobiles, financials, and FMCG facing downward pressure. In contrast, IT companies and select export-oriented businesses may find relative support amid global risk aversion and a strengthening US dollar,” he added.

Energy-intensive industries, including aviation, logistics, paints, and chemicals, are likely to experience margin compression due to rising input costs, while upstream oil producers could benefit from higher crude prices. Broader market reactions include short-term corrections, potential capital outflows, and depreciation pressures on the rupee, he further added.

Meanwhile, foreign portfolio investors, reversing their stance, have once again turned sellers.

Dr VK Vijayakumar, Chief Investment Strategist, Geojit Investments, said the net FPI buying witnessed in February has reversed due to the West Asia conflict. “In the first four trading days of March, FPIs sold equity worth ₹21,829 crore. Uncertainty surrounding the West Asia conflict, steady decline in the market, the vulnerability of the Indian economy to sharp crude spike, and the sharp depreciation of the rupee contributed to the sustained FPI selling in the cash market.

FPIs are unlikely to return to the market as buyers until there is some clarity on the outcome of the conflict and decline in the price of crude. Brent crude trading above $90 is bad news for the Indian economy and markets,” he said.

The market is now being supported by DII buying and sustained mutual fund SIP inflows. Further correction in the market will make valuations attractive. But strong buying will emerge only when the conflict ends and crude declines, he cautioned.

Published on March 9, 2026