The Indian stock market staged a strong rebound on Friday, March 20, with across-the-board buying, a day after witnessing a massive selloff that drowned key indices- the Sensex, Nifty 50, and Bank Nifty- more than 3% each.
The Sensex jumped more than 1,000 points, or over 1%. The Nifty 50 reclaimed the 23,300 mark, jumping more than 1%, and Nifty Bank also rose by more than 1% during the session.
The mid- and small-cap segments jumped by up to 2% during the session, reflecting broad-based buying rather than just in large-cap stocks.
The overall market capitalisation (m-cap) of BSE-listed firms rose back to ₹432 lakh crore, making investors richer by about ₹6 lakh crore within the first hour of trade. In the previous session, the m-cap of BSE-listed firms dropped to ₹426 lakh crore.
The sharp market rebound raises two key questions: Why is the rising, and has the Indian market bottomed out after Thursday’s fall?
Why is the stock market rising?
The Indian stock market is witnessing a relief rally after Thursday’s massive fall. The main drivers of this relief rally are a slight decline in , hopes that the worst of the may be over, and valuations coming to fair levels, especially in large-cap segments.
Brent crude prices declined more than 3% after the US hinted that sanctions on Iranian oil could be eased. News flows surrounding global powers coming together to secure shipping through the Strait of Hormuz also eased concerns, weighing on oil prices.
Meanwhile, there are indications that the worst of the war may be over, and an end is near.
Israeli Prime Minister Benjamin Netanyahu said the war with Iran might end sooner than expected. Notably, US President Donald Trump has also expressed similar views about the ongoing war.
Trump, meanwhile, has asked Israel not to attack Iranian natural gas infrastructure again, with Israeli Prime Minister agreeing to refrain from further attacks on Iran’s natural gas field, according to media reports.
Till Thursday, the Nifty 50 was down about 9% in March. A steep fall has brought most stock prices to lower levels, prompting investors to accumulate them at current levels.
Has the Indian stock market bottomed out?
While predicting a bottom of the market is challenging and even futile, experts say the market is discounting an end to the war.
“Unlike prolonged conflicts such as the Ukraine war, this situation is unlikely to drag on for months. A sustained disruption would severely impact the global economy. Apart from a few exceptions, most countries would suffer through higher oil import bills, weaker trade, and broader economic stress,” G Chokkalingam, founder and head of research at Equinomics Research, explained.
“Given these factors, global pressure to de-escalate is likely to build quickly. In my view, the worst may be behind us, and the situation could stabilise within days or weeks,” said Chokkalingam.
Chokkalingam believes the market has bottomed out.
“I believe so. Several indicators support this view. The market-cap-to-nominal-GDP ratio, which had risen to around 154%, has now corrected to nearly 115%, bringing valuations into a more comfortable zone,” said Chokkalingam.
The head of research at Equinomics Research pointed out that in absolute terms, total market capitalisation peaked at about ₹485 lakh crore in September 2025. Since then, there have been multiple corrections and recoveries. Currently, the market is down roughly ₹65 lakh crore from its peak, even after accounting for additional listings through IPOs.
Moreover, many small- and mid-cap stocks have corrected sharply—by 20% to 50%—which reflects a significant reset in valuations.
Rohit Srivastava, the founder and market strategist at Indiacharts.com, also believes the market may be near the bottom, pricing in the worst-case scenario based on current information.
“I see it as a recovery. Yesterday’s fall appeared to mark the point of maximum panic. The market has priced in the worst based on currently available information. Of course, new developments can always change the outlook, but as things stand, known risks appear to be largely discounted,” said Srivastava.
“There’s a strong possibility that we have formed a near-term bottom. Yesterday’s low becomes the critical turning point. On the upside, the index could move towards 24,000 or slightly higher. For Bank Nifty, the downside support is around 53,000, while the upside resistance is near 57,200,” Srivastava said.
Ajit Mishra, SVP of Research at Religare Broking, believes 22,800 is the next support for the Nifty 50, and if it fails to hold this level, 22,500 is on the cards.
On the upside, 23,800 is the resistance. Once we break this, this short-term negativity would be over, Mishra said.
But the risks remain
The market is experiencing heightened volatility amid persistent risks. The war continues, crude oil prices remain elevated above $100 per barrel, and the breached the 93 mark for the first time.
According to Bloomberg data, the rupee dropped 64 paise from its previous close of 92.6375 to a fresh low of 93.2813 against the US dollar during the session on March 20.
“Crude oil prices remain a key risk. It is still at $105-odd levels, which is not a very great picture for India. Until we see crude slipping below the $100 mark and sustaining at those levels, the negatives are not over, and the market may remain volatile,” said Mishra.
Mishra noted that global markets, especially the US, have also begun to correct. While the correlation may not be perfect, sustained weakness in US markets is likely to spill over into Indian equities.
The sharp decline we saw yesterday—when a single session wiped out gains from the previous three trading days—clearly indicates a lack of underlying market strength.
The volatility index India VIX also remains above 22 despite the rebound and decline in crude, indicating the risk meter is still high, Mishra said.
“Even sectors such as banking and auto, which had been relatively resilient, may find it difficult to maintain their positive momentum amid this corrective bias. The broader narrative, once again, appears to be shifting towards concerns around inflation and other macro factors,” said Mishra.
However, despite the persisting risks, experts say this could be the perfect time to buy stocks for the long term.
“Over the past 18 months, markets have faced multiple headwinds—FII selling, heavy IPO supply, promoter stake sales, concerns around AI disruption, and now geopolitical tensions. Given the magnitude of these pressures, markets have already absorbed substantial headwinds. As a result, valuations have become attractive, and I have a strong conviction in the long-term opportunity,” said Chokkalingam.
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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.