Following the outbreak of war on 28 February, the Nifty India Defence Index experienced renewed investor interest with episodic spikes of 2-3% in single sessions. According to reports from Mint, the index had previously rallied toward 8,300 points in November 2025 before correcting to around 7,214 by 30 March. In contrast, the Nifty Oil & Gas Index remained steadier, trading mostly between 10,000 and 11,500 and closing March around 10,788, delivering a modest one-year return of around 2.2%. The latest developments show Brent crude above US$100, creating additional pressure on energy markets and contributing to the ongoing geopolitical risk premium.
The defence sector has shown intermittent gains followed by immediate corrections throughout the period. As reported by Mint, Prashant Mishra, founder and CEO of Agnam Advisors, noted that defence stocks saw immediate sentiment-driven rallies at the start of March as geopolitical tensions escalated, with sharp spikes around 6-7 March and a more pronounced move near 17 March, when the sector rose nearly 7%. The Nifty India Defence Index returned 13.9% over the past year (1 April 2025 to 1 April 2026) excluding dividends, interests, and coupon payments, though this hasn't been a sustained trend. Current market conditions show geopolitical conflict and oil supply shock creating additional tailwinds for defence stocks.
The energy sector witnessed volatile, event-driven movements during the period, with rising Middle East tensions briefly pushing crude oil prices above $119 a barrel in early March. According to Mint reports, the Nifty Energy Index had touched a peak of 37,181.8 on 26 February, but during March it traded in a relatively narrow range of about 34,800–36,800. The latest developments show Brent crude above US$100, creating additional pressure on energy markets and contributing to the ongoing geopolitical risk premium. Despite geopolitical tailwinds, the sector's one-year return remains in the low-to-mid teens, reflecting its cyclical and volatile nature.
April's US earnings season is arriving in a market shaped by geopolitical conflict, oil supply shock with Brent crude above US$100, and The Fed still boxed in by sticky inflation. As reported by GO Markets, this reporting period is landing after a real shift in what markets care about, moving away from chasing growth at any cost toward companies built to hold up better when conditions get harder. Major defence contractors like Lockheed Martin and Northrop Grumman are among the key names to watch, with Lockheed Martin more closely tied to the F-35 and current air combat demand, while Northrop Grumman is more linked to next-generation programs such as the B-21 Raider and Sentinel. The estimated US$650 billion AI infrastructure buildout is increasingly being scrutinized for returns on investment, potentially testing risk appetite heading into May.
Financial experts emphasize maintaining a diversified core portfolio approach rather than chasing sectoral opportunities. As reported by Mint, Nehal Mota, co-founder & CEO of Finnovate, recommends keeping 80% in diversified long-term allocations while using a small portion for selective participation in two to three opportunities. Gaurav Santoshwar follows a disciplined core-satellite strategy, keeping most investments in diversified mutual funds while allocating 5-10% tactically to defence or oil funds via flexible SIP-like lump sums of ₹75,000-1,25,000. Current market conditions show geopolitical volatility forcing a rotation into energy and defence at the expense of growth-oriented technology positions, with experts noting that perfect timing is rare in sectoral investing.
Current market data indicates that significant investor inflows followed the massive rally in defence stocks only after valuations had already stretched significantly through February 2026. According to Mint reports, Feroze Azeez, joint CEO of Anand Rathi Wealth, recommends that investors who have extremely high exposure to sectoral funds consider shifting portions to other diversified segments in phases to minimize timing risks. Experts emphasize that perfect timing is rare in sectoral investing, and geopolitical events alone shouldn't drive investment decisions, with allocations guided by fundamentals like earnings visibility and balance sheet strength. The latest developments show geopolitical conflict and oil supply shock creating additional risk factors that investors must consider when evaluating sectoral exposure.
