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Informist, Tuesday, Mar. 17, 2026

 

By Eshitva Prakash

 

MUMBAI – Benchmark equity indices are expected to trade in a range on Wednesday as investors continue to buy stocks at comfortable valuations, but the market is likely to face selling pressure at higher levels. Investors' risk appetite has declined as sentiment toward risky assets has soured amid the conflict in West Asia, analysts said. The conflict in the region has shown no signs of easing, reinforcing expectations that crude oil prices will remain elevated in the near term. However, the Indian government's dialogue with Iran and its efforts to secure shipments through the Strait of Hormuz have partly eased investors' concerns, some analysts said.

 

"With total uncertainty and confusion regarding the trend of the war continuing, this uncertainty is becoming reflected in the market," VK Vijayakumar, chief investment strategist at Geojit Investments, said. "Investors are expected to be cautious as continued hostilities in Gulf countries are keeping crude oil prices above the psychologically important $100 per barrel mark," he added. Headline indices ended higher on Tuesday on short-covering by investors, but Vijayakumar does not expect this trend to continue in the short term, as war-related uncertainties persist.

 

"The US-Iran war is why it is a little difficult to gauge where the market will turn in the coming days," Dhaval Patel, assistant fund manager fixed income at Axis Mutual Fund, said. Foreign investors have been selling domestic equities relentlessly, and the pace of selling has accelerated since the war started. "Even prior to the war, foreign activity was not very encouraging, but the war has led to a churn towards better-performing markets and asset classes," Dhaval said. Banks and financial services, which foreign investors have a strong exposure to, have seen a decline in the recent few sessions as these investors are now in a "risk-off mood," the analyst said. 

 

Emkay Global Financial Services said that crude oil staying above $100 per barrel for two to three months looks "worryingly probable." This would jolt India's growth, macro stability, and earnings, with liquefied petroleum gas shortage threatening serious disruption of daily life, the brokerage said. Emkay Global sees a near 10% further downside risk for the Nifty 50 if the war continues. The correction would be temporary. Once crude normalises to around $70 per barrel, India's economy and earnings should recover, and therefore, this is an entry opportunity for investors entering with a horizon of over one year, it said. "We believe some stocks have already over-corrected and see Eternal, Bajaj Finserv, HDFC Bank, and Max Healthcare as attractive beaten-down ideas at this point."

 

At 1747 IST, the Brent crude May futures contract was almost 3% higher at $102.98 per barrel on the Intercontinental Exchange. The contract has risen by 50% over the last 30 days in anticipation of reduced gas and oil supplies via the Strait of Hormuz. The war in West Asia, the key contributor to this supply bottleneck, shows no signs of abating. On Tuesday, Israel said its military killed Iran's security chief Ali Larijani in a strike. Iran has not confirmed the report. Throughout the day, Iran has launched drones and rockets at the US embassy in Iraq's capital, Baghdad, as both sides continue to pull in more regional actors, risking spillover in neighbouring nations.  

 

Besides the conflict in West Asia, analysts will focus on the outcome of the Federal Open Market Committee's meeting Wednesday. However, expectations are muted, with most expecting the US Federal Reserve to maintain the status quo on rates. The US Fed is expected to keep interest rates steady and traders have pushed back their expectations for an interest rate cut of at least 25 basis points beyond October, Reuters reported. Earlier, they had expected a rate cut in July.

 

On Tuesday, the Nifty 50 ended at 23581.15 points, up 172.35 points, or 0.7%. The BSE Sensex closed at 76070.84, up 567.99 points, or 0.8%. Several metal and automobile stocks gained as investors found stock valuations cheap following the steep correction over the past several sessions. The 50-stock index will likely face resistance at 23800 points and find support at 25350 levels, Vipin Kumaar, senior technical and derivatives analyst at Globe Capital Market, said. The US-Iran war has triggered short-term market volatility, which will likely continue for a few more weeks, the analyst said.  End

 

Edited by Saji George Titus

 

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