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Informist, Friday, Mar. 27, 2026

 

By Arya S. Biju

 

MUMBAI – Benchmark equity indices are expected to fall more in the upcoming holiday-truncated week amid mixed signals from the US and Iran on negotiations between the two. The market volatility is expected to remain high amid higher crude oil prices and expectations of a further fall in the rupee against the dollar, according to analysts.  

 

"Currently I feel that the markets are really on a sell-on-rise mode. And it really depends on how the crude price is shaped from here. If the crude manages to stay above $90 (per barrel) for any day, the markets are going to be on a sell-on-rise mode," Harshal Dasani, business head at INVasset PMS, said. "The crude has to fall below $90 (per barrel) for the markets to settle down and stable up. So I feel that there is not much pain left, but I don't see a very sharp recovery coming back in the markets. I think that it will take some time," Dasani said. He expects the indices to see a short-term consolidation from here. 

 

Analysts also flagged rising concerns about India's economic growth as well as corporate earnings amid the sustained higher energy costs and higher transport costs due to the near closure of the Strait of Hormuz since the beginning of the West Asia conflict on Feb. 28. "If this (US-Iran war) goes on for some time, be prepared for shutdown in business as supply issues become a problem," Seshadri Sen, head of research at Emkay Global Financial Services, said in a webinar Friday.

 

Sen expects domestic companies to see a sharp rise in raw material costs in the Apr-Jun quarter due to the ongoing war in West Asia. While a "large part of earnings in the Nifty 50 are protected, the broader market will be hit hard," he said, adding that information technology, metals, and pharmaceutical stocks will be somewhat protected.

 

The Indian economy is strong enough to absorb the shock if the war ends, crude cools down and gas availability becomes normal. But if the war prolongs, crude price remains high for months together, and gas availability constraints continue, the stress on India's macros will be significant and the market will discount that, VK Vijayakumar, chief investment strategist at Geojit Investments, said in a note. "In brief, everything boils down to how long the war will last. The market hope is that since a prolonged war is in nobody's interests, it may end soon," Vijayakumar said. "The US itself is now looking for an exit strategy. Market corrections and rising retail price of petroleum products may exert pressure on the US regime to cool down the conflict." 

 

Global brokerage Goldman Sachs Thursday downgraded Indian equities to 'market weight' from 'overweight' on a less attractive risk-reward ratio compared to North Asian markets and amid a worsening macro environment and slowing earnings growth. The brokerage also trimmed its earnings growth forecast for 2026 to 8% from 16?rlier, and that for 2027 to 13% from 14%. It also trimmed its 12-month target for the Nifty 50 to 25900 points from the previous target of 29300 points.

 

The energy crisis due to the war stands to ripple across supply chains. Each passing week tankers can't traverse the Strait of Hormuz, the world loses 70 million barrels of oil, as well as a host of other products vital for chip manufacturing, medical equipment and consumer goods, according to a Wall Street Journal report. Executives at an energy conference this week warned that even if the US manages to reopen the waterway, it will take a long time for supply chains to stabilise, the report said. 

 

Adding to the concerns, foreign portfolio investors remained net sellers throughout March, selling domestic equities worth over INR 1 trillion so far in the month. Going forward, analysts see no signs of foreign portfolio investors coming back to India, amid the uncertain macro environment, weak rupee and "comfortable not attractive" valuations, Dasani said. Further, investors' concerns around the impact of artificial intelligence have also not completely abated, and that may hinder foreign buyers from putting money into Indian equities, Goldman Sachs said. 

 

Friday, the Nifty settled at 22819.60, down 486.85 points, or 2.1%. The BSE Sensex closed at 73583.22, down 1690.23 points, or 2.3%. Over the week, both the benchmark indices have lost 1.3?ch, falling on a weekly basis for the fifth straight week. Next week, the 50-stock index is seen finding immediate support at 22450-22500 points and resistance at 23200–23850 points, according to technical analysts. "On the downside, a breach below the previous week low of 22471 may trigger further downside towards 22100 and 21800 levels," Bajaj Broking said in a note.   End

 

US$1 = INR 94.8125

 

Edited by Deepshikha Bhardwaj

 

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