IndiGo, IOC to Petronet LNG: US-Iran war pushes 75 stocks from Nifty 500 pack into bears' grip

The escalating conflict involving the United States, Israel, and Iran has emerged as a fresh concern for stock market investors across the globe, including in India. The intensifying tensions in the region have triggered a sharp rise in crude oil prices, creating significant pressure on the fiscal balance of major crude-importing nations.

The situation has become particularly sensitive due to disruptions around the Strait of Hormuz — one of the world’s most critical energy chokepoints — through which nearly 20% of global crude oil supply passes. Any threat to shipping routes in this region immediately raises fears of supply shortages, pushing oil and natural gas prices higher in international markets.

Higher fuel costs also tend to ripple across sectors such as transportation, logistics, aviation, and manufacturing, impacting corporate profitability and investor sentiment.

India, which imports a large portion of their crude oil requirements, a sustained rise in oil prices can widen the trade deficit, increase inflationary pressures, and strain government finances while impacting India Inc earnings.

As a result, the flagship Nifty 50 index has seen a sharp 3.6% decline since the beginning of the war, while its broader counterpart, the Nifty 500 index, has slumped almost 4%.

75 stocks crash 10% or more in just 5 sessions

From the Nifty 500 pack, some 75 stocks have seen a decline of 10% or more, pushing them into bear grip in a span of just one week, shows data from Capitaline as of close on March 9.

Some of the most-impacted stocks include energy companies like OMCs and city gas distributors. For OMCs like BPCL, IOCL and HPCL, crude oil prices form a key input component. Any jump in prices can erode their margins and shave off the bottomline.

As per the estimates of JM Financial, every $1/bbl higher oil price above ~$70/bbl hits OMCs auto-fuel GMM by ₹0.55/ltr and consolidated EBITDA by 7–9%. The recent conflict had pushed oil prices briefly above $115/barrel, after which they cooled off but remain high at above the $90 level.

IOC, BPCL and HPCL shares have lost 13-14% each amid this backdrop in just five trading sessions till March 9. OMC stocks looked up marginally today following a decline in oil prices and Trump's statement of an end to the war soon.

Stocks like GAIL (India), PG Electroplast and Mahanagar Gas also faced steep losses, shedding over 10% each as they suffered from gas supply shortages. The Middle East conflict has impacted India’s major liquefied natural gas (LNG) supplier, Qatar, after a drone strike on its facilities.

With nearly half of its LNG imports last year coming from the Gulf nation, India is particularly exposed to disruptions, with companies announcing Force Majeure.

Earlier last week, the Indian government invoked emergency powers and directed oil refiners to ensure that there is no shortage of LPG for domestic consumers, amid supply concerns arising from escalating geopolitical tensions in West Asia.

Some stocks like Redington, Netweb Technologies and Authum Invest were also hit amid souring investor sentiment on Dalal Street, emerging among the top losers. Several large-cap names like Tata Motors PV, L&T, UltraTech Cement, and Bosch were also significantly hit, each shedding over 10%.

InterGlobe Aviation shares, another company directly impacted by the rising crude oil prices, also faced deep cuts of over 12% in just five sessions amid the conflict.

According to Axis Securities, rising crude prices are negative for sectors like aviation, chemicals, cement, tyres, and logistics, along with oil marketing stocks.

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