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Informist, Wednesday, Mar. 25, 2026

By Arya S. Biju

MUMBAI – The benchmark indices are expected to move in a range Friday as investors wait for further clarity on the developments in West Asia. While some slight gains are expected in the upcoming session amid rising hopes of de-escalation in the US–Iran conflict, concerns over likely further attacks on energy infrastructure may limit the upside, analysts said. The domestic market is closed Thursday for Ram Navami.

On Wednesday, the headline indices closed sharply higher, extending their recovery for the second straight session, supported by improving global cues and hopes of a potential de-escalation in the ongoing conflict. Brent Crude oil fell more than 7% to a low of around $97 per barrel Wednesday on reports that the US is seeking a month-long ceasefire in its war with Iran, and has sent a peace plan to Tehran for discussion. At 1744 IST, May futures of Brent Crude were at $98.66 per barrel.

"There is clearly a diplomatic opening now, but I would still call it a fragile pause rather than a confirmed end to the conflict," Anirudh Garg, partner and fund manager at INVasset PMS, said. Markets are reacting to the possibility of a ceasefire and that naturally creates a relief rally in risk assets, including Indian equities. "But the bigger issue is that the market is trading on hope, not closure. As long as Israel-Iran tensions remain capable of flaring up again, crude, currency and risk sentiment will continue to swing sharply," Garg added.

For domestic equities, this means the near-term bias can remain positive, but with high volatility, Garg said. "We could see a further rebound if crude cools and the rupee stabilises, but this is still not a clean all-clear signal... but if ceasefire talks fail or attacks intensify again, the downside can reopen quickly. So this is a tradable bounce for now, not yet a fully durable uptrend," he said.

Even if the conflict between Iran and the US-Israel combine ends sooner, crude oil prices may still remain high, as energy infrastructure, shipping routes, and supply chains will take time to normalise, analysts said. "Even if firing stops, damaged facilities and logistical bottlenecks can keep the oil market tighter for some time," said Garg, adding that he expects a more gradual cooling in crude prices. 

While there are hopes that the Indian economy could absorb the impact of the war-led disruptions if it is short-lived, a prolonged conflict and sustained high energy prices can trim the growth expectations for the country and push inflation higher. India's growth is likely to see a significant slowdown in the March quarter compared to a quarter ago, dragged down by weak private sector activity, Pantheon Macroeconomics said in a report Wednesday. GDP growth in the March quarter may fall to 6.1% from 7.8% in the December quarter, based on the Purchasing Managers' Index reports. The long-term outlook for India, however, remains "unfazed", the UK-based economic research firm said.

Economists have lowered projections for India's growth in FY27 to around 6.5% due to sharply higher crude oil prices amid the US-Israel war on Iran. Meanwhile, S&P Global Ratings and Fitch Ratings have raised India's FY27 growth outlooks by 40 basis points and 30 bps to 7.1% and 6.7%, respectively. However, S&P Global said downside risks prevail in its forecast considering the current situation in West Asia and trade-related uncertainties.

Further, continued selling of Indian equities by foreign institutional investors continues to weigh on the overall sentiment. So far in March, they have net sold domestic equities worth over INR 1 trillion. "For global investors, India becomes harder to own when crude is elevated, the rupee is weak, and earnings estimates are being revised down," Garg said. "So the trigger for FII return is very clear, stable crude, currency comfort, better geopolitical visibility and confidence that the earnings reset is behind us. Until then, FII flows are likely to stay tactical rather than fully committed," he added. 

Wednesday, the Nifty 50 closed at 23306.45, up 394.05 points or 1.7%. Technical analysts expect the index to find support at 23100-23000 points and resistance at 23500–23800 points.  End

US$1 = INR 93.9775

Edited by Ashish Shirke

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