Rising crude, global tensions weigh on markets: Which sectors may gain and which could struggle?

Rising tensions following the Iran–US conflict have triggered a broad decline across Indian stock market sectors. Data from ACE Equity show that most sectoral indices fell between February 27 and March 9, 2026, as investors became cautious amid geopolitical uncertainty and rising crude oil prices.

Broader market indices also saw a correction during this period. Among key benchmarks, the Nifty 50 declined about 4.6%, while the Nifty Smallcap 250 fell 5.1% and the Nifty Midcap 150 dropped 5%. The broader Nifty 500 index was down 4.8%, showing that the sell-off was spread across the market.

Among sectoral indices, the biggest decline was seen in the Nifty Auto index, which fell 7.8%. Banking stocks also came under pressure, with the Nifty Bank index declining 7.4%. Housing and financial services-related stocks also recorded notable declines. The Nifty Housing index dropped 6.8%, while the Nifty Financial Services index fell 6.6%.

Energy-linked sectors also corrected during the period. The Nifty Oil & Gas index declined 6.2%, while the Nifty Realty index slipped 6.1%. Other sectors, such as infrastructure and metals, also saw losses, with the Nifty Infrastructure index and the Nifty Metal index falling around 4–5%.

However, some defensive sectors performed relatively better. The Nifty FMCG index declined 3.8%, while the Nifty IT index slipped 1.4%. Healthcare-related indices were even more stable. The Nifty Healthcare index fell just 0.7%, while the Nifty Pharma index was almost unchanged, with a marginal decline of 0.1%.

On the other hand, defence stocks moved in the opposite direction. The Nifty India Defence index rose 2.6% during the period, making it the only sectoral index to post gains. Defence companies often attract investor interest during periods of geopolitical tensions.

Concerns about rising crude oil prices have also added to market worries. According to a report by Axis Securities, crude oil remains one of the most important global factors influencing India’s economy and stock markets.

India imports nearly 85% of its crude oil requirement, making the country highly sensitive to global oil price movements. Every $1 increase in crude oil prices can raise India’s annual import bill by about $1.5–2 billion. A $10 rise in oil prices can widen the current account deficit by around 0.35–0.5% of GDP.

Higher crude oil prices also affect inflation. Fuel becomes more expensive, and transportation, manufacturing, and logistics costs increase. This can push up overall prices in the economy and limit the Reserve Bank of India’s ability to cut interest rates.

Historically, oil price spikes have often led to higher inflation and pressure on the rupee in India. As a result, investors usually keep a close watch on crude oil prices during periods of global conflict.

According to Axis Securities, rising crude oil prices could lead to clear sector positioning for investors. The brokerage suggests that investors may prefer sectors such as oil exploration companies, energy infrastructure firms, select refineries, and defence and infrastructure companies, as these businesses can benefit from higher crude prices or increased strategic spending.

At the same time, investors may maintain exposure to relatively less oil-sensitive sectors such as banking, IT services, healthcare, and strong consumption companies with pricing power.

On the other hand, sectors such as aviation, paint, tyre, chemical, and logistics companies could face pressure due to higher fuel and raw material costs, making them relatively weaker during periods of rising crude prices, the brokerage report said.

VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said extreme volatility in crude oil prices has also increased volatility in global stock markets. Brent crude briefly surged close to $120 before falling to around $89 within a day, reflecting the high uncertainty surrounding the impact of the West Asian conflict on global oil supplies. According to him, such sharp swings show how unpredictable markets can become during geopolitical tensions.

However, Vijayakumar noted that history suggests geopolitical conflicts usually have only a short-term impact on economies and markets. He advised investors to remain invested and continue systematic investing rather than reacting to short-term volatility. He added that market corrections often create buying opportunities, particularly for investors with a long-term perspective. According to him, sectors such as financials, automobiles, pharmaceuticals and defence continue to have good prospects.