Benchmark indices staged a sharp recovery on Monday, March 16, erasing early losses to close firmly in the green, even as the spectre of an escalating US–Iran conflict continued to hover over global markets. The Sensex surged 939 points, or 1.26 per cent, to close at 75,502.85, while the Nifty 50 gained 258 points, or 1.11 per cent, to settle at 23,408.80 — after briefly touching a session low of 22,955.
The recovery was anything but smooth. Both indices spent much of the morning in negative territory before a sharp buying surge after 2 pm turned the tide. “Bulls finally cheered with relief rally on Monday… sharp buying has emerged after 2 pm that led to sharp bounce back in Nifty to close near the highs,” said Nagaraj Shetti, Senior Technical Research Analyst, HDFC Securities. He cautioned, however, that “the underlying broader trend of Nifty remains weak and the market is still not out of woods,” with a crucial overhead resistance at 23,500–23,600.
Market breadth on the BSE told a more cautious story — of 4,537 stocks traded, only 1,509 advanced while 2,860 declined, and 907 stocks hit fresh 52-week lows against just 81 at 52-week highs.
Among Nifty gainers, UltraTech Cement led the pack, surging 4.46 per cent to ₹11,090, followed by Grasim Industries at 3.44 per cent to ₹2,656.90, Mahindra & Mahindra at 3.34 per cent to ₹3,029, Eternal at 3.16 per cent to ₹222.50 and Trent at 2.68 per cent to ₹3,581.20. On the losing side, Bharat Electronics fell 2.48 per cent to ₹428.50, Max Healthcare dropped 2.32 per cent to ₹967, Wipro declined 1.79 per cent to ₹194.05, Coal India shed 1.71 per cent to ₹459, and ONGC slipped 1.51 per cent to ₹260.10. Auto and financial stocks carried the recovery, while oil & gas and realty remained under pressure.
India VIX cooled 4.47 per cent to settle at 21.63, offering some relief, though it remains elevated above 20. Derivatives data showed a Put-Call Ratio near 1.07 for Nifty, with heavy call writing at the 23,500 strike — a level the index failed to decisively breach. “A breakout above 23,500 could trigger short covering toward 23,800–24,000, while a break below 23,200 may drag the index towards 22,900–22,600,” said Dhupesh Dhameja, Derivatives Research Analyst, SAMCO Securities.
The session was shaped significantly by the ongoing US–Iran conflict now entering its third week. WTI crude surged above $100 per barrel, though it briefly dipped below $97 as traders noted continued exports from Iran’s Kharg Island. COMEX gold slipped to $4,970/oz and silver to $78.5/oz, weighed down by a firmer dollar and rising Treasury yields. “Supply chain disruptions stemming from the Iran conflict are increasingly viewed as re-inflationary, prompting markets to scale back expectations of policy easing,” noted Kaynat Chainwala, AVP Commodity Research, Kotak Securities. Precious metals may remain soft in the near term, with the upcoming FOMC meeting and U.S. PPI data the next key triggers to watch.
The Indian Rupee opened on a steadier note, supported by equity gains and a softer dollar, though it remains near historic lows. HDFC Securities’ Dilip Parmar flagged immediate resistance at 92.60 and key support at 92.05 for the spot USD/INR pair, with the RBI seen providing a floor amid sustained importer dollar demand and foreign fund outflows.
Despite today’s bounce, the technical setup remains fragile. Om Mehra, Technical Research Analyst, SAMCO Securities, described the move as “a short-term relief rally rather than a trend reversal,” pointing to RSI near 29 and the negative directional line still dominant. Research Analysts Jahol Prajapati and Saurav Chaube at SAMCO noted that in seven instances over 15 years where Nifty fell over 5 per cent in a week — including the 5.3 per cent fall on March 13 — the index delivered average returns of 3.4 per cent in the following week, making aggressive short bets less attractive at current levels.
The broader picture, however, offers some perspective for long-term investors. An analysis by Narender Singh, Founder of Growth Investing and smallcase manager, points out that Indian markets have navigated four years of rolling geopolitical crises — from Russia–Ukraine and Israel–Hamas to US–China trade tensions and the India–Pakistan escalation of May 2025 — delivering a CAGR of around 12.7 per cent. Mid-caps led the charge with 18.4 per cent CAGR, outpacing large caps at 9.8 per cent. Defence, manufacturing and capital goods have emerged as sectoral beneficiaries of this geopolitical churn, while gold’s role as a safe haven, Singh’s analysis notes, tends to reassert itself only after initial liquidity stress subsides. “Periods of uncertainty often create opportunities for those who remain invested and take a long-term view,” Singh said.
Looking further out, Nifty EPS is projected to reach ₹1,650–₹1,700 by FY29, driven by consumption, banking credit and infrastructure spending — a trajectory that, at current valuation multiples, points to potential Nifty levels of 34,000–35,000 over three years. For now, though, the next directional move will hinge on what happens in the Strait of Hormuz, the FOMC’s tone this week, and whether crude oil finds a ceiling.