War, Oil & Markets: A Clear Strategy for Investors

Markets rarely move in a straight line, and March 2026 is a good example of that reality.

At Vika Wealth, we see two forces working at the same time.

On one side, India’s economic fundamentals are quietly improving. Corporate earnings are beginning to recover, liquidity in the system is comfortable, and the recent trade agreements with US and EU add supportive tailwinds.

On the other side, geopolitical tensions in the Middle East are creating uncertainty, especially through oil prices.

So the right approach today is neither panic nor overconfidence.
It is disciplined investing with a medium-to-long-term view.

As the famous wartime saying goes:

“In the midst of chaos, there is also opportunity.” — Sun Tzu

Equities: Domestic Growth Is Showing Early Signs

The Indian economy is starting to show clear signs of improvement, especially in rural demand.

Some recent data points highlight this trend:

Two-wheeler sales: up 24.9% YoY
Tractor sales: up 40.1% YoY
Bank credit growth: around 14.6% YoY
System liquidity surplus: about ₹1,617 billion

All these indicators suggest economic momentum is slowly building again.

This means the earnings recovery story is real, not just a narrative.

The Key Risk: Oil and the Middle East

India imports roughly 2.6 million barrels of crude oil per day, and almost half of that passes through the Strait of Hormuz.

If the conflict in the Middle East escalates, oil prices could rise sharply.

For India, that could mean:

Higher inflation
Wider current account deficit
Less flexibility for the RBI to cut interest rates

Our scenario analysis suggests:

If oil averages $75/barrel, India could grow around 7%
If oil averages $100/barrel, growth may slow closer to 6%
For every $10/barrel, there is will be $12-15 billion dollars impact on CAD and which translates to 0.5 to 0.7 impact on CAD and 0.5% impact on inflation. It is average price for the year what needs to be taken. Crucial thing to watch out for.
This is not a worst-case scenario — it is simply the range investors should plan for.
As history reminds us:
“Only the dead have seen the end of war.” — often attributed to Plato
Markets have always lived alongside geopolitical tensions.

How We Are Positioning Equity Portfolios

At Vika Wealth, our current thinking is simple and balanced.

Geographic Allocation

A reasonable structure today could be:

90% Domestic Equities
10% Global Equities

Within global markets:

30% Developed Markets (US, Europe)
70% Emerging Markets

Given geopolitical volatility, fresh investments should ideally be staggered rather than deployed all at once. The portfolio construction changes as per the risk profile and return expectation.

Not because the long-term thesis is weak —
but because entry discipline matters when markets swing on headlines.

Factor Positioning

Our analysis currently shows:

Positive Bias

Value

Neutral

Momentum
Low Volatility

Momentum factors recently saw a reversal and may require a clear market trend to recover.

Low volatility strategies can be used more as a portfolio stabiliser than a return driver.

Commodities: Gold and Silver

Precious metals have rallied strongly.

Gold is now trading above $5,100/oz, supported by:

Safe-haven demand
Central bank buying
Currency uncertainty globally

Silver has also performed well, but it behaves slightly differently.

The Gold/Silver ratio is currently around 56, below its long-term average of about 60. This means silver has already outperformed gold recently.

However, silver also has industrial demand exposure, which makes it more volatile during risk-off periods.

Our approach

For new allocations:

We prefer gold as a portfolio hedge. Either through funds or directly.

And importantly, deploy gradually in tranches, rather than investing everything at once.

Currency: INR Outlook

The Indian Rupee has weakened roughly 4.3% over the past year.

Two opposing forces are currently at play:

Positive

India-US trade agreement

Negative

Oil price risk
FPI outflows

Interestingly, both the USD and INR have shown periods of weakness together, which is an unusual dynamic worth watching.

Our broad expectation is that INR may move within the 88–94 range, with periods of volatility.

The Bigger Investing Lesson

The image above tells the real story of markets.

Over the past 40 years, investors have lived through:

Wars
Financial crises
Pandemics
Economic shocks

And yet, markets kept climbing over time.

Every crisis felt permanent when it happened.

But on a 30–40 year chart, most of them look like small dents.

Another wartime reminder applies well to investing:

“Plans are useless, but planning is indispensable.” — Dwight D. Eisenhower

Investing is not about predicting every event.
It is about building portfolios that survive them.

What This Means for Investors Today

At Vika Wealth, our message to investors is clear.

For SIP Investors

Stay invested.

Volatility actually helps SIP investors because you accumulate more units when markets fall. Over time, that improves the average purchase price.

For Fresh Capital

Opportunities are slowly starting to emerge.

But capital should be deployed strategically and gradually, not emotionally.
Be very selective with private credit, private equity, real estate, and venture capital funds. In times like these, having funds available to invest is paramount. Locking up your money should not exceed 10–20% of your portfolio.

Because history shows:
When the going gets tough, smart capital quietly enters the market. Our learning has been to never try to time the market by saying, “I will only invest if the Nifty comes to 20k,” or by sitting on the sidelines completely. It has to be a balanced approach.

Best Regards
Sri Subhash Yerneni,
Founder,
Vika Wealth.