War headlines, oil spikes and sharp market swings usually make one instinct louder than the rest: sell first, ask questions later. That instinct has been back in focus as global tensions have rattled equities and commodities, with the benchmark index Nifty 50 losing over 1,700 points since the start of this war despite 3 sessions of strong rally since March 1.
Reacting to the war, brokerages Citi and Nomura have also lowerer their Nifty targets. Yet the key question for traders is not whether the market is under pressure, but whether this is actually the right time to build fresh bearish bets.
from 28,500 and lowered the index’s target multiple to 19 times from 20 times one-year forward earnings. Even after the downgrade, the revised target still implied 17% upside from the Nifty’s last close. Nomura also reduced its year-end target for the Nifty 50 to 24,900 from 29,300, implying a potential upside of 7.5%.
The caution came as the geopolitical backdrop worsened. US President Donald Trump called for a coalition of nations to help reopen the Strait of Hormuz, while Israel said it had detailed plans for at least three more weeks of war. Iranian drone attacks also disrupted parts of the Gulf, including a temporary shutdown at Dubai airport and a strike on a key oil facility in the UAE.
In periods of war and geopolitical stress, investors often turn hesitant, step back from fresh buying, and wait for calmer conditions. Panic selling can also intensify the decline, with stop-loss orders adding to the pressure. But while such phases create sharp short-term volatility, they do not always define the market’s longer-term direction. History shows that some of the strongest opportunities can emerge during these phases of uncertainty, although recoveries are not always immediate and often reward investors who remain patient and disciplined.
Bears may slow down: Why should you not short Nifty yet
Analysts at SAMCO Securities argued that while Nifty may appear attractive for bears at current levels, the risk-reward for fresh short positions does not look favourable.
Jahol Prajapati and Saurav Chaube, Research Analysts at SAMCO Securities, said, “is currently trading at an appealing levels for the Bears but still it may not be the best trade to short Nifty at the current level. There are two prime arguments based on the past data that indicates avoiding going short is best advised at this time.”
SAMCO’s first argument rests on the Nifty/Brent crude ratio, which is nearing an important long-term support zone. According to the analysts, the recent sharp fall in the ratio has been driven largely by the spike in rather than a total collapse in Nifty. That matters because if crude prices stabilise or cool, the ratio can recover even if Nifty merely holds steady. A rebound could also happen if oil remains elevated but Nifty itself starts to recover.
Jahol Prajapati and Saurav Chaube said, “Historically, this ratio has rebounded from similar levels, suggesting limited downside from current levels and the risk-reward for fresh short positions may turn out to be unfavourable.”
Their second argument comes from market history. Over the past 15 years, there have been seven previous instances when the Nifty fell more than 5% in a single week. Excluding phases of systemic stress, the market often stabilised and rebounded in the weeks that followed. On average, Nifty delivered returns of 3.4% in the following week, 3.0% over two weeks, 1.4% over three weeks, and 1.9% over four weeks after such sharp weekly declines. The probability of positive returns stood at 71% in the one-week, two-week and four-week periods, while the three-week window recorded positive returns 57% of the time.
The latest instance, on March 13, 2026, when the Nifty fell 5.3% for the week, places the market in a setup that looks historically similar. That does not guarantee an immediate rebound, but it does suggest that betting aggressively on further downside may not be the smartest move unless the current situation turns into a full-blown systemic event.
That is where the current debate sits. The macro backdrop is clearly uncomfortable, and lower brokerage targets reflect that. But lower targets are not the same as a call to short the market immediately. For now, history and technical signals suggest caution for bears. In a market shaken by war, oil and volatility, the easier trade may look like shorting Nifty. The better trade, at least for now, may be resisting that urge.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.