Market Volatility Returns Amid Geopolitical Tensions

Indian Equity Markets Correct 445.45 Points and 1,459.46 Points

On 2 March 2026, the Nifty 50 slipped 445.45 points to 24,723.20, while the Sensex declined 1,459.46 points to 79,827.73 at 14:30 IST, mirroring the nervous mood on Dalal Street amidst intensifying geopolitical tensions.

Investors Reassess Risk Exposure

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In times of uncertainty, investors often reassess their risk exposure and consider shifting part of their portfolio to safer, government-backed instruments that offer predictable and sovereign-guaranteed returns. Historically, equity markets have experienced a 5 to 10 percent fall during geopolitical escalations, but recovery has followed within 3 to 6 months.

Diversification: A Key Approach

According to Arjun Guha Thakurta, Executive Director, Anand Rathi Wealth Limited, investors should consider complementing equity with other stable asset classes to maintain stability during uncertainties. The best approach is to always diversify your portfolio and have a mix of both.

Alternative Options to Equities

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Bank Fixed Deposits (FDs)

• Typically offer interest rates ranging between 6 percent and 8 percent depending on tenure and bank.
• Senior citizens usually receive an additional 0.25–0.50 percent.
• While returns are taxable, FDs offer capital protection and predictable income.

Debt Mutual Funds

• Generate returns by investing in interest-bearing securities such as government bonds, corporate debt, treasury bills, and other short-term instruments.
• The net asset value (NAV) of a debt fund changes depending on interest rate movements and the credit quality of the securities in its portfolio.
• Experts suggest investors should align the fund's duration, credit quality, and overall risk profile with their financial objectives and investment timeline before investing.

Public Provident Fund (PPF)

• Current interest: 7.10 percent per annum
• Tenure: 15 years, extendable in blocks of 5 years
• The PPF account allows you to deposit up to Rs 1.5 lakh per person per year and claim a tax deduction under Section 80C.

National Savings Certificate (NSC)

• Current interest: 7.70 percent per annum
• A minimum investment of Rs 1,000 is required to open an NSC account, and the lock-in period is 5 years.
• Tax benefits of up to Rs 1.5 lakh are available under Section 80C of the Income Tax Act.

Senior Citizens Savings Scheme (SCSS)

• Eligible individuals can invest a minimum of Rs 1,000 up to Rs 30 lakh for a period of 5 years, with an interest rate of 8.2 percent per annum.
• The principal amount invested can be claimed as a deduction under Section 80C of the Income Tax Act up to Rs 1.5 lakh.

Post Office Monthly Income Scheme (POMIS)

• Designed for risk-averse investors who want a monthly payout without market risk.
• You can invest up to Rs 9 lakh individually under this scheme.