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Informist, Monday, Mar. 16, 2026

By Arya S. Biju

MUMBAI – Analysts expect domestic benchmark indices to see short-term relief after they staged a sharp rebound towards the close of Monday's session. The headline indices closed over 1% higher each on Monday, after falling for three straight sessions, in which they lost nearly 5% each. However, the broader sentiment remains negative amid the escalating tensions in West Asia, continued rise in oil prices, and an uncertain geopolitical environment, analysts said.

Going forward, the market volatility is also expected to remain higher in the uncertain macroeconomic environment, analysts said. Crude oil prices remained higher Monday, with the May futures contract of Brent Crude Oil rising over 3% to an intraday high of $106.50 per barrel. The contract stayed above the $100 per barrel level for the third straight session Monday as geopolitical tensions in West Asia entered the third week with no clear path to de-escalation. 

Higher energy prices had raised concerns over the economy's overall growth with expectations of higher inflation and a widening current account deficit if the prices remain higher for a longer period. Crude oil prices staying above the $100 per barrel level for a month, would lead to around $40 billion hit in terms-of-trade, implying around 1% hit in the country's gross domestic product, Ajitabh Bharti, co-founder and executive director of CapitalXB said. Such a scenario might see the Nifty 50 index correcting by around 1000-4000 points, he added. 

Further, analysts pointed out sector rotation trends since the beginning of the regional conflict. "...utilities, power stocks and healthcare have been the top performing sectors, while auto, oil stocks and realty have been the worst," Akshay Chinchalkar, managing partner and head of markets strategy at the Wealth Company said. "This is a clear rotation from sectors which will be impacted by a higher cost of money (inflation expectations are going higher because of the oil surge) to those that are defensive in nature," Chinchalkar said. 

Earlier in the day, global brokerages Citi Research and Nomura trimmed their year-end targets for the Nifty 50 index, citing rising risks to growth and corporate earnings as surging oil prices and supply shocks from ‌the escalating West Asia tensions darken the outlook for the country. Citi cut its year-end target for Nifty 50 to 27000 points from 28500 earlier, implying an over 15% upside from Monday's close. The brokerage also lowered the index's target multiple to 19 times from 20 times one-year forward earnings.

Nomura had a more conservative tone. It cut its year-end target for the Nifty 50 to 24900 points from 29300 points, implying only an over 6% upside from potential Monday's close, Reuters reported, citing the brokerage. "The current geopolitical escalation is more concerning than the Russia-Ukraine conflict as the Strait of Hormuz accounts for 20%-25% of global trade in oil and LNG vs Russian supplies of 8%-10%," the report quoted Saion Mukherjee, analyst at Nomura as saying.

Monday, the Nifty 50 ended at 23408.80 points, up 257.70 points, or 1.1%. The BSE Sensex closed at 75502.85, up 938.93 points, or 1.3%. After opening largely flat, the benchmark indices rose in early trade, rebounding from their worst week in nearly four years. However, they failed to hold on to the gains and turned choppy soon after, but rose sharply towards the last hour of trading and closed over 1% higher each.

Going forward, further downside for the Nifty 50 index is expected to be limited if hostilities extend beyond 4–6 weeks, Bharti said. If the war ends quicker, by April end, indices could rebound to pre-war levels as uncertainty fades and oil prices stabilise. However, higher oil prices would cap recovery in the current range amid macro drags like rupee weakness, he added. 

In the near term, the 23000 points zone appears to be an immediate support for the Nifty 50 index, Osho Krishan, technical & derivative analyst at Angel One said. "On the upside, given the underlying weakness in the broader structure, the extent of the bounce remains uncertain. Immediate resistance is placed near 23550 (points), where Friday's gap is visible, while a move beyond this level could lead to the next potential hurdle near 23850 (points), which corresponds to Thursday's gap," he added. 

Going ahead, markets will closely monitor developments in West Asia, particularly around energy and oil supply disruptions, Siddhartha Khemka, head of research, wealth management at Motilal Oswal Financial Services said in a note. Updates on the India–US trade agreement and the upcoming Federal Reserve interest rate decision will also remain key triggers for market direction, he added. The US Federal Open Market Committee meeting is scheduled to begin from Tuesday, with most expecting the central bank to keep the rates unchanged. End

US$1 = INR 92.4200

Edited by Deepshikha Bhardwaj

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