From crashing equities to soaring oil, Iran war ripples through India’s markets, currency, bonds, and household costs sharply.Madan Sabnavis

Since the Iran war began in March, there have been several ups and downs. The markets have reacted in a variable manner depending on political statements made on all sides.

Therefore, evaluating their movement becomes challenging, though admittedly everything has been turned around once too often ever since the tariff issue dominated the economic architecture.

Stock markets are down, currencies are falling, and bond yields are rising. Every time it appears that a truce could be drawn, which soothes the markets, there is contrary news that spooks them again.

Hence, when evaluating the impact on markets, the numbers must be read with some discretion, as the evaluation is at a point in time when things looked irreversible.

Stock markets and investor uncertainty

Let us look at the markets sequentially. The Sensex (free float) has lost around Rs 10 lakh crore of market capitalisation as on March 23, compared to February 27, which was before the war erupted. If the same is considered for the BSE 500, it would be Rs 20 lakh crore.

However, such numbers must be read with caution because these are notional losses and not actual, as the indices have been valued at market prices. The message, however, is clear. Stock markets have been losing rather than........

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