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Informist, Tuesday, Mar. 24, 2026

 

By Arya S. Biju

 

MUMBAI – Headline equity indices are expected to see some more gains Wednesday and remain in a range following Tuesday's rebound, technical analysts said. However, the sentiment remains cautious with crude oil prices staying above the $100 per barrel mark and also as investors await greater clarity on the geopolitical tensions in West Asia and developments in the Strait of Hormuz, analysts said.

 

Tuesday, equity markets across Asia rose after US President Donald Trump said on Monday that the US would postpone military strikes on Iran's power plants and energy infrastructure for five days following discussions with Iranian officials. However, Iran denied any talks with the US, keeping uncertainty around the resolution to the Iran war intact. 

 

"I don't think even the two protagonists (US and Iran) know precisely what will happen, because there is, you know, so many things involved out there," said Shahzad Madon, managing director and chief executive officer of TCG Asset Management. In the coming sessions, the market direction will depend on news flows regarding the West Asia war, Madon added.

 

Amid the sustained higher energy prices driven by geopolitical tensions, there are still concerns about the overall economic growth, with expectations of higher inflation and widening current account deficit. However, unless the war extends for a prolonged period, the country's growth story remains intact, Madon said. On other hand, JM Financial expects the impact of higher crude prices to reflect in March data prints in the form of deterioration of trade balance if the conflict stretches for some more weeks.

 

The West Asia conflict is entering a more precarious phase, despite recent news around potential de-escalation, Emkay Global said in a report Tuesday. The recent attacks on energy infrastructure have heightened the risk of broader and persistent supply disruptions, it said. Besides, a prolonged conflict implies a broader supply shock, "global stagflationary tail risks" and heightened volatility, impacting India's exports, remittances and capital flows, the brokerage said. The eventual growth, inflation, and fiscal hit will largely depend on how the crude price shock, if sustained, is distributed between oil marketing companies, government, and end consumers. 

 

Another brokerage, Goldman Sachs, reduced its forecast for India's GDP growth for the second time in March amid the ongoing US-Iran hostilities raising risks of higher inflation and interest rates, it said in a report on Tuesday. The GDP forecast for 2026 was reduced to 5.9% from 6.5% given on Mar. 13. The firm had expected the GDP growth at 7?fore the US-Iran war began. The brokerage also raised inflation projections to 4.6% in 2026, from 4.2% estimated on Mar. 13. Before the war, the firm had expected CPI inflation at 3.9%--below the 4% target of the Reserve Bank of India.

 

The possibility of higher inflation has also pushed the firm to factor in hikes in interest rates this year. The firm expects the RBI to raise interest rates by 50 basis points. The current repo rate is at 5.25%. "Where it is relatively straightforward to interpret market pricing, these policy rate forecasts remain below market-implied outcomes. For example, at the time of writing, we infer that over the coming year markets imply...3-4 (25 bps hikes) by RBI..." Meanwhile, brokerage HSBC Global doesn't expect rate hikes over the foreseeable future, despite the oil price shock, as the RBI will focus on one-year ahead inflation, which may look softer than inflation in the immediate months, it said in a report dated Monday.

 

While the expectations of a rate hike by the US Federal Reserve slumped sharply after Trump's comment, the FedWatch tool still sees an 18% probability of a 25-basis-point rate hike in 2026 as against the no rate hike expected a week prior. Central banks across the globe had held their interest rates steady in their recent policy meetings amid global economic concerns stemming from higher energy prices and the uncertain macro environment. 

 

After a sharp fall Monday, domestic benchmark indices closed around 2% higher on Tuesday. The Nifty 50 settled at 22912.40, up 399.75 points or 1.8% from the previous close. "The Nifty (50) index is approaching a crucial phase for the upcoming week, with major resistance placed around 23200 (points) and a strong support zone near 22500 (points). The market is likely to remain range-bound unless a decisive breakout occurs," said Rishabh Srivastava, technical analyst at Lakshmishree Investment and Securities. 

 

Further, a sustained move above 23200 points could trigger fresh bullish momentum for Nifty 50, toward 23550 levels, Srivastava said. On the downside, holding above 22500 will be key to maintaining overall strength. A clear breakout or breakdown of this level will set the tone for short-term direction in the market, he added.  End

 

US$1 = INR 93.8650

 

Edited by Akul Nishant Akhoury

 

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