- Sectors and Stocks Under Pressure in the Current Crisis
- What History Says About Crashes and Recovery
- Nifty P/E: A Simple Valuation Check During a Market Crash
- Key Takeaways for Retail Investors
- Final Word
Since the Iran-Israel-US conflict began, the Nifty 50 and Sensex have fallen about 6-7%, and your portfolio may have felt the heat as well. That is why crashes feel so personal. Screens turn red, headlines get louder, and even sensible investors start thinking only about safety.
But the bigger danger is often our own reaction. A widely cited Dalbar study found the S&P 500 returned 25.05% in 2024, while the average investor earned only 16.54%, largely because of poor timing and emotional decisions.
So the real risk in a crash is not just falling prices. It is fear pushing investors to sell at the bottom, stop SIPs, or give up on long-term plans.
This blog explains how market crashes affect the mind, which sectors are under pressure right now in the current Iran-Israel-US conflict, what history says about recoveries, and which simple indicators can help retail investors act with more discipline.
Sectors and Stocks Under Pressure in the Current Crisis
The biggest market impact of the Iran-Israel-US conflict is coming through oil, logistics, and regional exposure. That is why OMCs, airlines, chemicals, and Middle East-linked businesses are under pressure, while upstream oil companies may benefit.
Here are the sectors and stocks seeing the clearest impact so far:
| Sector | Impact so far | Key Indian stocks | Why they are affected |
| Upstream Oil & Gas | Positive | ONGC, Oil India | Higher crude prices can lift selling prices and earnings. |
| Oil Marketing Companies / Refiners | Negative | IOC, BPCL, HPCL | Higher crude raises costs and can squeeze margins. |
| Airlines / Aviation | Negative | InterGlobe Aviation (IndiGo), SpiceJet | Fuel costs rise and air route disruptions add pressure. |
| Paints / Tyres / Chemicals | Negative | Asian Paints, Berger Paints, MRF, Apollo Tyres | Crude-linked input costs rise, hurting margins. |
| Oil-to-Chemicals / Conglomerates | Negative | Reliance Industries | Supply disruption and cost volatility create near-term pressure. |
| Infra / EPC with Middle East exposure | Negative | Larsen & Toubro | Middle East exposure raises project delay and execution risk. |
| Restaurants / Hotels using commercial LPG | Negative | Sector-level impact | LPG supply stress and higher commercial LPG prices raise costs. |
| Fertiliser / farm-input chain | Negative | Sector-level impact | Gas supply cuts are affecting input availability and output. |
| Jewellery / gems trade | Negative | Sector-level impact | Trade disruption and high gold prices can hurt demand and flows. |
Source: Reuters and other media reports
What History Says About Crashes and Recovery
Every crash feels different at the time, but market history often follows a similar pattern. Sharp falls create fear in the short term, yet weak or flat phases have often been followed by strong returns later.
Edelweiss data shows that when Nifty delivered near-zero returns over roughly 18 months, the next 1 to 3 years were often much stronger. For example, from October 2001 to March 2003, the 18-month return was just 0.65%, but the next 12 months returned 81% and the next 36 months returned 248%.
| Start Date | End Date | 18M Return | Next 12M Return | Next 36M Return |
| 31-Jul-01 | 31-Dec-02 | 1.92% | 72% | 159% |
| 31-Aug-01 | 31-Jan-03 | -1.13% | 74% | 188% |
| 31-Oct-01 | 31-Mar-03 | 0.65% | 81% | 248% |
| 31-Jan-07 | 30-Jun-08 | -1.03% | 6% | 40% |
| 31-Mar-08 | 31-Aug-09 | -1.53% | 16% | 13% |
| 30-Apr-08 | 30-Sep-09 | -1.59% | 19% | 12% |
| 28-Feb-11 | 31-Jul-12 | -1.95% | 10% | 63% |
| 30-Apr-11 | 30-Sep-12 | -0.80% | 1% | 39% |
| 31-May-11 | 31-Oct-12 | 1.07% | 12% | 44% |
| 31-Dec-14 | 31-May-16 | -1.48% | 18% | 46% |
| 30-Jun-15 | 30-Nov-16 | -1.72% | 24% | 47% |
| 30-Sep-21 | 28-Feb-23 | -1.78% | 27% | 48% |
| 31-Oct-21 | 31-Mar-23 | -1.76% | 29% | 47% |
| 31-Aug-24 | 31-Jan-26 | 0.34% | ? | ? |
Source: Edelweiss
This does not mean every fall should be bought blindly. It means two simple things for retail investors. First, a 10% to 20% drawdown is normal. Second, the biggest mistake is often panic-selling during fear, instead of staying patient and adding gradually when markets get cheaper.
Nifty P/E: A Simple Valuation Check During a Market Crash
One simple way to judge market valuations during a crash is the Nifty P/E ratio. P/E, or price-to-earnings ratio, shows how much investors are paying for each rupee of earnings.
Right now, the Nifty’s current P/E is 20.7, compared with its 3-year median P/E of 22.3. That suggests valuations are lower than their recent average, which may make the market look more reasonable than before.
Still, this should be read with caution. A lower P/E does not mean the market has bottomed, and a higher P/E does not always mean a crash is near. It should be used only as a broad historical guide, not a fixed buying signal.
Key Takeaways for Retail Investors
The first job in a crash is emotional control. If you can stop yourself from making a fear-driven mistake, you have already done something important. The Dalbar gap is a reminder that behaviour can matter as much as stock selection.
The second job is understanding impact. In the current conflict, oil sensitivity matters a lot. OMCs, airlines, crude-linked manufacturers, and Middle East-exposed project companies may face more pressure, while upstream energy can hold up better.
The third job is preparation. Flat periods and ugly corrections have often been followed by strong returns, but only for investors who stayed invested or added with discipline. That is why a crash should be managed with process, not prediction.
Final Word
A market crash is never comfortable. But it does not have to become destructive. The real danger is not only falling prices. It is reacting to fear without a framework.
History does not promise quick gains, and no indicator can remove uncertainty. But investors who stay calm, accept temporary pain, and follow simple rules usually give themselves a better chance than those who sell into panic.
Disclaimer
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