Equity Values Plummet Amid Rising Tensions in West Asia, Sector Funds Hard Hit

Market Volatility in Response to Geopolitical Tensions

On March 2, equity mutual fund schemes experienced significant one-day net asset value (NAV) declines, ranging from 0.2% to 3.9%. The market reaction was largely driven by escalating US–Iran–Israel tensions.

Key Sectors Affected

• Tourism-linked passive strategies suffered the most, with:
  • Tata Nifty India Tourism Index Fund declining 3.35% to Rs 8.55 from Rs 8.84.
  • Motilal Oswal Nifty India Tourism ETF falling 3.34% to Rs 74.95 from Rs 77.54.
  • Kotak Nifty India Tourism Index Fund slipping 3.33% to Rs 8.06 from Rs 8.34.
• Infrastructure and logistics-focused schemes also saw significant declines, including:
  • Aditya Birla Sun Life BSE India Infrastructure Index Fund–Reg (G) dropping 2.84% to Rs 9.08 from Rs 9.35.
  • Motilal Oswal BSE India Infrastructure ETF declining 2.84% to Rs 59.44 from Rs 61.18.
  • Kotak Transportation & Logistics Fund–Reg (G) falling 2.66%.
  • Groww Nifty India Railways PSU Index Fund–Reg (G) down 2.63%.

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Healthcare Funds Mitigate Losses

In contrast, healthcare funds limited losses, with:

• ICICI Prudential Nifty Healthcare ETF declining 0.09% to Rs 152.20 from Rs 152.34.
• Aditya Birla Sun Life Nifty Healthcare ETF and DSP Nifty Healthcare ETF also slipping around 0.09%.
• PGIM India Healthcare Fund falling 0.20%, while Baroda BNP Paribas Health and Wellness Fund–Reg (G) declined 0.18%.

Market Indices

• Nifty fell 1.24%, while Sensex declined 1.29%.
• Nifty 500 declined 1.43% during the session.

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline

Expert Advice

Experts advise investors to maintain a long-term investment approach and avoid reacting hastily to geopolitical headlines. Amol Joshi, Founder of PlanRupee Investment Service, suggests reviewing concentrated exposures rather than exiting equities. Ashish Gupta, CIO at Axis Mutual Fund, advises investors to stay invested and diversify sensibly, as fundamentals tend to reassert themselves over time.