Conflict erodes ₹6 tn from PSU stocks

Escalating tensions in West Asia have abruptly halted the powerfully in public sector stocks, which had been among the strongest performers on Dalal Street in recent years.

- Mayur Bhalerao [e-mail]

Since 27 February 2026, when the West Asia conflict intensified, the Nifty 50 has declined about 6%, as crude oil prices surged past $100 per barrel and global risk aversion increased.

The BSE PSU index, which hit its 52-week high of 22,560.74 on 26 February, has declined nearly 7% since then. Even so, the 60-stock index has held up slightly better than the broader market this year, rising about 2% year-to-date while the Nifty 50 is down roughly 9% over the same period.

The shift in sentiment is reflected in market capitalization. A Mint analysis of BSE data shows the combined market value of PSU (public sector undertaking) companies has declined nearly ₹6 trillion in recent weeks from about ₹69.7 trillion on 26 February.

The correction follows an extraordinary rerating in the sector over the past few years. PSU market capitalization more than tripled from ₹22.1 trillion in 2022 to nearly ₹70 trillion by February 2026, driven by stronger balance sheets, improving earnings and sustained policy support.