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Below the Daily Market Commentary for March 13th 2026 By Siddhartha Khemka - Head of Research, Wealth Management, Motilal Oswal Financial Services Ltd

Market volatility is expected to persist in the near term as geopolitical tensions in West Asia continue to disrupt the energy sector and push crude oil prices higher, while uncertainty around shipping routes through the Strait of Hormuz keeps risk sentiment fragile. Any meaningful de-escalation in the conflict involving Iran, Israel and the US could provide relief and support a recovery in equities, while further escalation may keep markets under pressure. Indian equities have witnessed a sharp correction in 2026 amid heightened global volatility and uncertainties, leading to significant erosion in market value across segments. While Nifty50 has declined over 11% since the beginning of the year Nifty Mid cap and Small cap indices are down by around 10% each. Even in March so far, Nifty has fallen by 8% - the worst monthly fall since the pandemic fall of Mar’2020. On the currency front, the Indian rupee sank to a fresh record low of ?92.45 against the US dollar as investor sentiment weakened amid a surge in energy prices above $100 per barrel, raising concerns over a widening current account deficit for India, which imports nearly 88% of its crude oil. The Reserve Bank of India intervened by selling dollars to curb volatility, though traders expect continued pressure on the currency if crude prices remain elevated. On Friday, Indian markets declined for the third consecutive session, with the benchmark index Nifty50 breaking key support levels amid rising crude oil prices, dollar index, persistent foreign fund outflows and weak global cues. The escalation in the West Asia conflict has heightened global uncertainty and disrupted key shipping routes, pushing Brent crude over $100 per barrel and intensifying fears of supply disruptions. Elevated oil prices have also raised concerns about inflationary pressures, a widening current account deficit and potential pressure on corporate margins, prompting investors to reduce exposure to equities and shift toward safer assets. Against this backdrop, rate-sensitive and cyclical sectors such as banking, financial services and automobiles witnessed notable selling pressure. Nifty 50 declined 2% during the session to close at 23,151, down 488 points, while broader markets also weakened with the Midcap 100 and Smallcap 100 indices declining over 2% each. Going ahead, market direction is likely to remain sensitive to developments in the West Asia conflict, movements in crude oil prices and the trend in foreign fund flows. Sustained foreign outflows and elevated oil prices could keep sentiment cautious, while any signs of easing geopolitical tensions may provide relief to markets.

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