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Below the Daily Market Commentary for March 18th 2026 By Siddhartha Khemka - Head of Research, Wealth Management, Motilal Oswal Financial Services Ltd

From a strong three-day rebound, due to supportive global cues, markets are expected to remain cautious as investor sentiment may carry on to be sensitive to developments in West Asia, movements in crude oil prices and continued FIIs activity. While a near-term relief rally may persist, its sustainability will depend on de-escalation in geopolitical tensions and moderation in energy prices. Markets witnessed a sharp recovery for the third consecutive session, with the Nifty 50 gaining 0.8% and crossing the 23,750 mark to close at 23,777, up 196 points, and broader markets strengthened, with the Midcap100 and Smallcap100 indices gaining 2% and 1.6% respectively. The rally was aided by positive global cues, softer crude oil prices and selective buying at lower levels, while a decline in the India VIX indicated improving investor sentiment and lower near-term volatility.  Additionally, gains were led by buying in IT and auto stocks, which rebounded on value buying after recent declines (the IT index was down 3.6% and auto index was down 9.1% in March). IT stocks were further supported by easing concerns around AI disruption, driving the Nifty IT index up over 4%, and Auto index above 2%, while the strong auto registrations in March—showing double-digit growth with most segments—highlighted robust underlying demand in the sector. On the currency front, the Indian rupee weakened to a record low of Rs.92.6 against the US dollar. The currency remained under pressure due to strong dollar demand from oil importers and foreign fund outflows, although the RBI intervened by selling dollars to limit excessive volatility. Depreciation pressures are likely to persist if crude oil prices remain elevated. Going ahead, markets will track developments in West Asia, movements in crude oil prices and trends in foreign fund flows for directional cues. Updates on India–US trade agreement and the upcoming Federal Reserve interest rate decision will also be key triggers.

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