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Informist, Thursday, Mar. 19, 2026

By Arya S. Biju

MUMBAI – Benchmark equity indices may fall further Friday due to continued risk-off sentiment triggered by escalating tensions around energy infrastructure in West Asia. Oil prices continued to rise on Thursday, keeping global equity markets under pressure, after some of the world's most critical energy facilities were hit in a fresh wave of attacks in West Asia. Going forward, analysts remain cautious due to intensifying tensions in West Asia and expect volatility to persist.

A rapid rise in energy prices has intensified fears about global economic growth, with rising expectations of higher inflation across nations. The US Federal Reserve on Wednesday held its key interest rates steady as a spike in oil prices since the start of the US-Israel war with Iran raises economic uncertainty and threatens to drive up inflation. The Fed now expects inflation to be higher at 2.7%, up from 2.4% projected in December. Further, the central bank's 'dot plot', which reflects individual members' policy rate projections, pointed to just one rate cut in 2026 from the two projected earlier. The CME FedWatch tool now indicates an over 70% probability of no rate cut by the bank in 2026, compared with a 50% chance expected a week prior. 

The Bank of Japan also held interest rate unchanged at its latest policy meeting Thursday amid the escalating crisis in West Asia and volatile energy markets. The central bank, however, stuck to its stance of continuing to seek rate hikes. 

Further, there are also concern about a hit in earnings of domestic companies in the near term, amid rising energy prices. "We had actually baked in a case of $130 per barrel of oil, which seems to be realising... in this scenario, the revenues and earnings will essentially get impacted for a number of industries," said Utsav Verma, head of research at Choice Institutional Equities. "So, if this (US-Iran conflict) persists for longer, maybe say another couple of weeks, then we will see Q4 (Jan-Mar) earnings, results coming out, which will be lesser than estimated. We will see even Q1 (Apr-Jun) results poorer than what our estimate is," he added. 

Additionally, persistent selling of domestic equities by foreign institutional investors continued to impact the market sentiment. So far in March, they have net sold domestic equities worth over INR 772 billion, the highest monthly sales in over a year. The last time foreign investors net sold domestic equities worth over INR 772 billion was in January 2025. Some analysts had also pointed out a risk of domestic investors turning net sellers if the geopolitical situation worsens. "But I don't see this yet," Verma said, adding, "The drivers for DII's (domestic institutional investors) is the incoming flows of funds from the retail investors, HNI (high net worth individual) investors. So, those flows have been robust. Even if there is a decline, it's not really something that should actually cause us too much worry." 

Thursday, both the Nifty 50 and Sensex closed 3.3% lower, marking their worst single-day fall since June 2024. The 50-stock index closed at 23002.15 points, down 775.65 points, hitting an 11-month closing low. After opening gap-down, the Nifty 50 found support at around 22900 points, as analysts had expected. Friday, the index is seen finding support at 22900-22500 points and facing resistance at 23350-23600 points, technical analysts said.  End

US$1 = INR 92.63

Edited by Akul Nishant Akhoury

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