‘Not a trading moment but…,’ Experts on how investors can strengthen portfolio as Iran war rattles Dalal Street

The Iran war has triggered big swings in the stock market since the conflict started more than two months ago. While sharp market selloffs create opportunities for investors, ‘they should be treated as a planning moment more than a trading moment.’

“The current Iran–Israel–US flare‑up is seen as a market shock that is creating tactical opportunities but does not, in itself, justify a wholesale change to long‑term financial planning,” says said Arijit Sen, SEBI Registered Investment Adviser, Co-Founder, Merry Mind.

However, continuing regular investments is crucial, says Abhishek Kumar, SEBI-registered investment adviser and founder of SahajMoney, as it helps portfolios benefit when markets recover after volatility.

How Iran war is impacting the markets and retail investors?

The Sensex and Nifty 50 have experienced significant volatility and corrections, with both indices dropping over 1.7% in recent sessions following intensified US-Iran tensions. Earlier in March 2026, within just two weeks of the conflict starting, the Sensex dropped over 7% (more than 6,000 points) and the Nifty 50 crashed over 9%.

On Friday, 8 May, The Sensex and the Nifty 50, extended losses for the second consecutive session. The Sensex ended 516 points, or 0.66%, lower at 77,328.19, while the Nifty 50 settled at 24,176.15, down 151 points, or 0.62%.

The current geopolitical event is typically transmitting through higher oil and volatile commodity prices, currency pressure and episodic capital outflows. This sequence is compressing equity multiples and pushing up yields, which in turn is affecting purchasing power and fixed‑income valuations.

What investors should do now?

• The suitable response for most investors is measured and plan‑centred. Be it revisiting assumptions about near‑term inflation or cashflow needs.
• It's advisable to avoid forceful permanent strategy shifts in the investment portfolio.
• The recent phase wise dips has resulted in valuation improvement in high‑quality businesses.
• One may see merit in modest, phased increases to gold and silver as a hedge. “These are not blanket recommendations but observations about where risk‑adjusted returns can improve when markets overreact,” notes Sen
• Conversely, one may be wary of buying into highly leveraged cyclicals or concentrated sector bets simply because they are “cheap” on the day of the dip.

What retirees should focus on?

“For clients who are already retired, emphasis would be on liquidity and income stability rather than chasing higher returns,” advised Sen.

In practice that means ensuring an adequate cash buffer to cover near‑term withdrawals, preferring short‑duration, high‑quality fixed income to limit sensitivity to rising yields, and keeping equity exposure at a level that aligns with each client’s withdrawal plan and emotional tolerance for volatility

“If equities are to be added, staggered tranches funded from excess liquidity is favourable rather than lump‑sum buys that could force a sale at the wrong time,” he adds

How to strengthen your portfolio?

Investors can strengthen their portfolio in times of uncertainty by rotating their capital based on their target asset allocation into sectors that could benefit from geopolitical supply disruptions – energy, defense, and precious metals, says Kumar.

“They can do it by maintaining consistent contributions to diversified index funds to ensure that the portfolio captures the eventual recovery as markets stabilise after the shock,” he concludes