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Informist, Thursday, Mar. 12, 2026

By Arya S. Biju

MUMBAI – Benchmark equity indices are expected to continue their downward trend Friday as risk-off sentiment continues amid concerns about higher energy prices, geopolitical tensions, and sustained outflow of foreign funds. Analysts expect volatility in the market to remain high until clarity emeges on when the conflict between Iran and the US-Israel will conclude. However, some analysts expect the indices to consolidate after their sharp fall unless the geopolitical tensions heighten further. 

Adding to the negative sentiment, the International Energy Agency slashed its forecast for global oil demand and supply this year in view of the continuing military conflict in West Asia. It now expects supply to grow by 1.1 million barrels a day this year, down from 2.4 million barrels a day projected previously. Supply in March is expected to drop by 8 million barrels a day to 98.8 million barrels a day, the lowest levels since the first quarter of 2022. "The war in the Middle East is creating the largest supply disruption in the history of the global oil market," IEA said. 

However, Oil Minister Hardeep Singh Puri Thursday said that India is positioned better than most of its peers with supplies flowing in from diversified sources. The world is facing an energy crisis of the current scale for the first time, but India's crude supply position is secure, with no shortage of aviation turbine fuel, petrol, diesel, kerosene, or fuel oil, Puri said in a statement in the Lok Sabha.

"Retail outlets across the country are stocked, and supply chains for these products are functioning normally," Puri said. "Additional allocation of PDS kerosene has been issued to all the states," he said. The primary focus of the government is to ensure that fuel for domestic use is secured and that all households have access to it.

Further, reports said that the Ministry of External Affairs is in talks with Iran to secure safe passage for more than 20 tankers through the Strait of Hormuz. Shipping through the Strait of Hormuz has been effectively shut since the beginning of the West Asia conflict. In the latest to the series, two foreign oil tankers were hit in Iraqi waters, with explosive-laden Iranian boats, according to media reports. This was after unknown projectiles struck four vessels in Gulf waters.  

Foreign institutional investors remained net sellers in March, with a sharp acceleration in selling within the first seven trading sessions of the month, Siddhartha Khemka, head of research wealth management at Motilal Oswal Financial Services, said in a note. "The pullback reflects heightened global risk aversion amid escalating geopolitical tensions in West Asia and volatility in crude oil prices," he said. Going forward, any stabilisation in global conditions or signs of de-escalation of conflict in West Asia could help moderate outflow of foreign funds and support their gradual return into Indian equities, Khemka added.  

Thursday, the Nifty 50 closed at 23639.15, down 227.70 points or 1%. The BSE Sensex ended at 76034.42, down 829.29 points or 1.1%. Both the indices closed at their lowest levels since April and are now 10-12% below their respective all-time highs. Technical analysts expect the Nifty 50 to find support at 23500-23200 points and resistance at 23850–24300 points on Friday.  End 

Edited by Avishek Dutta

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