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Informist, Monday, Mar. 30, 2026

 

By Arya S. Biju

 

MUMBAI – The headline equity indices are expected to open the coming financial year on a negative note Wednesday with no clear signs of de-escalation of the military conflict in West Asia, which has triggered risk-off sentiment across global equity markets. The domestic equity markets are shut Tuesday for Mahavir Jayanti.

 

Higher crude oil prices, continued weakness in the rupee against the dollar, and persistent selling by foreign institutional investors are expected to keep market sentiment under pressure in the near term, analysts said. However, some technical analysts expect the headline indices to stage a recovery Wednesday after their sharp fall Monday.

In the final trading session of the month as well as the financial year 2025–26 (Apr-Mar), the benchmark equity indices closed over 2% lower as crude oil prices continued to rise and the war in West Asia entered its fifth week. The May futures contract of Brent Crude has risen nearly 60% since the war began Feb. 28..

 

There is concern about the country's economic growth as well as corporate earnings because of higher energy and transport costs as the Strait of Hormuz remains only partially open. Equity markets are reflecting this stress, analysts said. "I am expecting higher side inflation," Ravi Singh, chief research officer at Master Capital Services, said. "In fact, this year we are expecting El Nino is also there, so agricultural growth I am expecting below 4.2% ... so I can say that inflation last year comparison may be increased by 0.5%."
 

While sectors like energy, information technology, metals, and pharmaceuticals may remain relatively resilient, automobiles and the broader indices are more vulnerable, with volatility rising sharply and returns expected to remain subdued over the next 3–6 months, brokerage Systematix Shares and Stocks said in a report Monday. Analysts also expect the earnings of domestic companies to take a hit in the coming quarters. Singh estimates a downside of 3-5% for earnings in the June quarter while only minimal impact is expected to be seen in the March quarter. 

 

Foreign portfolio investors remained net sellers of domestic equities on all trading days in March till Friday. So far in the month they have net sold Indian equities worth over INR 1 trillion. Poor returns from India compared to other markets, both developed and emerging, steady depreciation of the rupee against the dollar, fears of a decline in remittances from the Persian Gulf region, and worries about the impact of higher crude oil prices on India's growth and corporate earnings have kept foreign investors away, analysts said. Going forward, "I am expecting after the settle-down of crude oil prices we may see some buying momentum (from foreign investors), otherwise just the weak type of movement" will continue, Singh said.

 

Going forward, the Nifty 50 index may fall to the 21800-point level "very soon" and there may be a sell-off across sectors like automobiles, cement, banks, IT, media, services, and telecommunications, Singh said. He expects the index to remain largely choppy in the next 6-8 months in the range of 22500-23500 points. The BSE Sensex is seen trading in the range of 72500-73800 points.

 

Wednesday, technical analysts expect the Nifty 50 to find support at 22200-21800 points and face resistance at 22500-22700 points. "For any meaningful pause in the current downtrend, the index needs to establish a pattern of higher highs and higher lows on the daily chart, along with a sustained close above the previous week's high of 23465 (points)," Bajaj Broking said in a note. Going ahead, analysts expect the sell-on-rise strategy to continue amid elevated volatility and weakening momentum.

 

As announced in the Union Budget for FY27 on Feb. 1, the increase in securities transaction tax on futures trades to 0.05% from 0.02% will come into effect from Wednesday. Automobile stocks will be in focus with major domestic companies announcing their monthly sales data for March. Automobile despatches in March are expected to grow in double digits on year across segments, amid higher demand aided by festival tailwinds, year-end buying, strong rural cash flows, and better availability of financing, analysts said.   End 

 

Edited by Rajeev Pai

 

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