11/05/26, Sensex plunged more than 1000 points

The Indian market was under heavy selling pressure on May 11 morning, with equity benchmarks tumbling amid US-Iran logjam, surging crude and growing concerns around India's external balances.

The 30-stock Sensex plunged more than 1000 points and was hovering around the 76,300 mark, while the Nifty50 slipped more than 300 points to trade near 23,860.

The selloff was broad based. The Nifty midcap 100 and Nifty smallcap 100 indices were down a percent each, reflecting a risk-off sentiment.

Sectorally, all major indices traded in the red, with consumer durable stocks among the worst hit. Market breadth remained weak, with over 2,000 stocks declining on the NSE against just around 600 advances.

The sharp decline comes amid renewed United States and Iran tensions, which have pushed global crude oil prices higher and revived concerns over inflation, supply chain disruptions and pressure on oil-importing economies such as India.

Investor sentiment was also hit after Prime Minister Narendra Modi urged citizens to avoid non-essential foreign exchange-intensive spending amid rising global uncertainty and elevated crude prices.

Jewellery stocks, in particular, witnessed sharp selling after Modi urged putting off non-essential gold purchases for a year, while broader risk aversion kept investors cautious across sectors.

Market falls uncomfortable but not unusual

Experts say investors should avoid reacting emotionally to short-term volatility.

Sharp corrections often trigger anxiety among retail investors, especially those investing through systematic investment plans (SIPs). Volatility is an unavoidable part of equity investing and SIPs are structured to work across market cycles rather than only during rallies, financial advisers say.

“Short-term geopolitical shocks should not disrupt long-term investment discipline. Investors who remain consistent through uncertain periods often benefit from lower average acquisition costs and stronger long-term returns,” Lt Col Rochak Bakshi, CFP at Trunor Enterprises, said.

Industry experts also says geopolitical tensions have triggered temporary corrections in Indian markets but rebounds have usually followed once uncertainty subsided. In many cases, markets have recovered within a few months after the initial shock.

Stopping SIPs during volatility may reduce an investor's participation in the eventual recovery.

The principle behind this strategy is rupee cost averaging, where investors automatically buy more units when markets fall and fewer when markets rise. Over time, this helps average out investment costs without requiring investors to perfectly time the market.

What should investors do?

Staying invested does not mean ignoring risk altogether, advisers say. Periods like these are a reminder for investors to reassess their financial preparedness and investment goals.

Vijay Maheshwari, CWM and founder of Stocktick Capital, said, “Investors should evaluate their investment horizon and risk appetite before making sudden decisions based on market headlines.” He also stressed the importance of maintaining adequate emergency savings.

According to Maheshwari, “Investors should ideally keep six to twelve months of expenses in an emergency fund so they are not forced to redeem long-term investments during volatile phases.”

Investors with surplus cash and a long-term outlook may consider selectively deploying more money during corrections rather than exiting the market entirely, he said.

For long-term investors, the broader message remains unchanged — market declines are a natural part of the equity cycle, but consistency and discipline remain central to long-term wealth creation, they say.

Report by Priyadarshini Mani, Network18 

Disclaimer: Above article meant for educational purposes only .