As tensions flare in the Middle East, the Sensex has taken a sharp hit, dropping over 1,250 points in early trade. Naturally, retail investors are left wondering: is this the time to worry?

At around 11:30 am, the Sensex was down 1,251.97 points to 83,014.32 points, and the combined market capitalisation of BSE-listed companies declined by Rs 6 lakh crore.

On the other hand, the NSE Nifty50 tanked 379.60 points to trade at 25,417.30.

While the direct effects on global markets are still unfolding, one key concern is the surge in oil prices.

Iran’s missile strikes on Israel have raised fears of potential disruptions to oil supplies, pushing Brent crude above $75 per barrel, while West Texas Intermediate has hit $72.

For an oil-importing nation like India, this spike could translate into increased inflationary pressures.

DrVaranasi Investment. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said, “If Israel targets oil installations in Iran, we could see a huge spike in crude prices. This will be particularly damaging for oil importers like India.”Pune Wealth Management

Rising crude prices typically inflate costs for businesses, increase transport expenses, and potentially weaken corporate earnings—all of which can negatively affect the stock market.

Market experts suggest a more cautious approach during this period of uncertainty.

Vijayakumar advises diversifying portfolios to defensive sectors like pharmaceuticals and FMCG, which tend to be less volatile during geopolitical crises.

Adding to the cautionary tone, Dr. Manoranajan Sharma, Chief Economist at Infomerics Ratings, offered deeper insights into the broader implications of the conflict.

He noted, “Iran’s missile strikes, and the potential for Israeli retaliation, mark another major flashpoint in the Middle East war scenario. With the US firmly backing Israel, we could see a sharp escalation. Investors should brace for volatility, as these geopolitical tensions are likely to persist.”

In times like these, while the market reacts swiftly to news, long-term investors may benefit from holding their nerve and seeking safer sectors, but experts strongly believe that it is essential to stay informed on how the geopolitical landscape evolves.

Santosh Meena, Head of Research, Swastika Investmart, said, "For long-term investors, this correction offers a good buying opportunity in large-cap stocks, where valuations have become more attractive. We are observing sectoral rotation, with commodity-related stocks expected to perform well in the near term."