The Indian stock market is undergoing one of the strongest corrections of recent times due to rising crude prices driven by the , a falling rupee, a relentless FII selloff, and increasing macroeconomic risks.
The stock market barometer, the , crashed by more than 2% to an intraday low of 23,112 on Friday, 13 March. Thus, the index has fallen by more than 12% from its record high of 26,373 hit on 5 January this year.
A double-digit decline from the peak has raised speculation about whether the market has entered oversold territory and if it is time for bottom fishing.
Has the market hit a bottom?
Given the prevailing uncertainty over the war in the Middle East, the near-term market outlook is hazy, making it difficult to predict whether the market has hit its bottom.
Friday’s market selloff also appears to be driven by technical factors, including margin-related pressure and position adjustments. Many investors may be unwilling to carry positions into the weekend due to the global uncertainties, which are contributing to the decline.
According to experts, if the war continues beyond the next two weeks and crude oil prices remain elevated for an extended period, the market may see further downside. It is time when indices are not respecting immediate supports and resistances and reacting to global cues.
However, if the war ends in the next few days, as the market hopes, there could be a healthy rebound in the market.
“There is uncertainty related to the ongoing war. Investors are waiting for more clarity. If we see signs of the conflict ending by this Sunday—or even next week—it could improve sentiment. In that case, we may see a strong market recovery,” Vinod Nair, Head of Research at Geojit Investments Limited, told Mint.
Nair pointed out that what we are seeing now is continued selling by foreign institutional investors (FIIs). Retail investors, who had been supporting the market until last month, have also become cautious. Today’s fall is also partly related to margin calls and activity in the futures and options (F&O) segment.
“These are largely short-term factors. The key question is whether the war will extend into April. If that happens, the assumptions will change completely, and we will need to reassess our outlook and forecasts,” said Nair.
The market is in uncertain territory, and predicting the bottom is difficult. From a technical perspective, the index has key support near 23,000, but any escalation in global tensions and further jump in crude oil prices may drag the index lower to this level.
“The market is currently facing a sharp correction driven by global risk-off sentiment. In such situations, volatility tends to remain elevated, and predicting the exact bottom becomes extremely difficult,” said Ravi Singh, Chief Research Officer at Master Capital Services.
Is it the right time to buy?
According to Singh, Nifty has an important support zone around 22,800 to 23,000, which could act as a near-term demand area.
“If the index approaches these levels, some stability or a short-term bounce may emerge. However, investors should avoid trying to precisely time the market bottom,” Singh said.
It is a challenging time for short-term investors. However, experts say it is time for long-term investors to accumulate quality stocks.
“For long term investors, a gradual dip buying strategy may be more practical rather than waiting indefinitely for the perfect entry point. Accumulating Nifty ETFs near the support zone can provide diversified exposure during periods of correction,” said Singh.
“Investors may also consider large blue-chip companies with strong domestic businesses, as they tend to be relatively more resilient during global uncertainty. A staggered investment approach remains a sensible strategy in the current environment,” Singh said.
The Nifty 50 continues to remain in a strong downtrend, and it could be too early to anticipate a definitive bottom for the market.
According to Sudeep Shah, the head of technical and derivatives research at SBI Securities, the Nifty 50 is currently trading around 7% below its 100-day and 200-day exponential moving averages.
This highlights the extent of weakness and confirms that the broader trend remains decisively bearish.
“In trending markets, such a wide deviation from long-term averages typically indicates that the corrective phase is still evolving rather than nearing exhaustion,” said Shah.
Shah also underscored that the index has been consistently forming candles with long upper shadows on the daily chart over the last two weeks, indicating that every pullback or relief rally is followed by selling pressure, as market participants use rallies to reduce exposure rather than initiate fresh long positions.
“Given this technical backdrop, attempting bottom fishing at this stage may prove risky, especially from a medium term investment standpoint. Historically, sustainable market bottoms are formed through a process involving base formation, momentum stabilisation, and improvement in breadth, none of which are clearly visible at present,” said Shah.
At this juncture, it makes sense to avoid aggressive dip-buying and wait for further corrections or clearer signs of a trend reversal.
The US-Iran war remains a variable the market cannot fully discount. A lot will depend on how long the war continues, as that will dictate crude oil prices and shape the global macroeconomic outlook.
On the downside, if weakness persists, the index may continue to drift lower before finding a durable base. A more constructive medium-term outlook would only emerge once Nifty starts reclaiming key long-term averages and selling pressure on rallies begins to subside meaningfully.
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Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.