Middle East Crisis Update: The cruelty of the stock market on helpless investors, know what investors should do in case of decline?

Middle East Crisis Update: Investors are surprised by the ongoing decline in the stock market. This week the Sensex has fallen by almost 4,000 points, while the Nifty is down 5 percent. It has been many years since the Indian stock market has seen such a sharp decline in a single week.

Earlier, the market had fallen drastically at the beginning of the COVID-19 pandemic in 2020. The special thing is that this decline is affecting all types of shares. Whether they are big or small companies (large-cap and small-cap). Investors are very disappointed with this decline.

This time every asset class declined

Experts say that at present there is weakness in every asset class. There have been signs of weakness in the prices of gold and silver since February 28. The rupee has also weakened against the US dollar. On March 13, it reached its lowest ever level of 92.43.

In the month of March alone, the rupee has weakened by about 1.5 percent against the dollar. It is rare for all asset classes to decline simultaneously. Generally, when geopolitical tensions increase, stock markets fall, while gold prices rise.

Rupee at its lowest ever level

Experts say that if the ongoing conflict between America, Israel and Iran does not subside, the situation may worsen. The biggest impact on the market has been due to the increase in crude oil prices.

Experts believe that if the rise in crude oil prices continues, the rupee may fall further against the dollar, and perhaps reach the level of 95. This may have a negative impact on the economy. This will make imports expensive, which will increase the prices of imported goods. In turn, this may increase inflation further.

FIIs sold shares worth Rs 52,000 crore in March

Another reason for the decline in the market is the selling done by foreign funds. So far this month, foreign institutional investors (FIIs) have sold shares worth about Rs 52,000 crore in the Indian market. This selling pressure has been felt most on the shares of blue-chip companies.

Even the shares of companies with strong fundamentals have seen a sharp decline. Larsen & Toubro (L&T) is a great example of this trend. On March 13, apart from L&T, big stocks like Jindal Steel, SBI, Maruti Suzuki and Mahindra & Mahindra also saw huge losses.

Investors should be patient at this juncture. N. Arunagiri, CEO of Trustline Holdings, said that taking stock of previous recessions shows that the market usually falls sharply in the initial days of any conflict.

This time the rising prices of crude oil are the main reason for the decline in the market. He stressed that this is the right time to invest and not wait for the market to reach its lowest level.

Opportunities like this don’t come around often

Waiting for the market to bottom often means that many investors fail to take advantage of market declines, as they assume the market will fall further before making an investment decision.

Such a moment i.e. the lowest level of the market comes very rarely, due to which this opportunity slips from their hands. Later they feel only regrets. When there was a huge decline in the market due to the COVID-19 pandemic, many investors lost the opportunity to invest.