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Market Closing Commentary

Indian benchmark equity indices plunged over 3% on March 19th, snapping a three-day rally, weighed down by a sharp rise in crude oil prices and weak global cues. Additionally, the US Federal Reserve kept its benchmark rate unchanged while signalling higher inflation, leaving limited room for rate cuts this year. Brent crude has surged to around USD 114,posing a negative for oil-importing countries like India, Higher crude price could adversely impact the country’s macroeconomic outlook.

At close, the Sensex declined 2,496.89 points, or 3.26%, to settle at 74,207.24, while the Nifty fell 775.65 points, or 3.26%, to 23,002.15. All major Nifty sectoral indices ended in the red, led by financial and banking stocks, which dropped around 3% each amid heavy selling in HDFC Bank.

Broader markets also remained under pressure, with the Nifty Smallcap100 and Nifty Midcap100 indices falling nearby 3% each. India VIX, often referred to as the market’s fear gauge, surged over 21% to 22.80, indicating heightened expectations of near-term volatility.

Nifty Outlook 

 The index formed a large bearish candle, marked by a lower high and a lower low, along with shadows on both sides—indicating a likely continuation of the corrective trend after the brief three-session pullback. Notably, it erased the entire gains of the past three sessions in just one day. From a technical standpoint, the index continues to exhibit a bearish bias in both the short and medium term, as it maintains a pattern of lower highs and lower lows.

Immediate support is seen around the current week’s low in the 23,000–22,900 zone. A breakdown below this level could trigger further downside, potentially dragging the index toward the 22,700–22,400 range. This region coincides with a previous gap area and the 78.6% Fibonacci retracement of the earlier major uptrend.

Volatility is likely to stay elevated in the near term, influenced by uncertain global cues and ongoing geopolitical tensions, which are weighing on market sentiment. On the upside, yesterday gap zone between 23,618 and 23,378 is expected to act as immediate resistance. The overall bias remains negative as long as the index trades below this zone.

Bank Nifty Outlook

The index formed a high-wave candle with a lower high and lower low, signaling a resumption of the corrective trend after the three-session pullback. In the process, it wiped out all gains from the past three sessions in a single day. Volatility is likely to remain elevated in the near term, driven by uncertain global cues and rising geopolitical tensions, which continue to weigh on market sentiment.

A sustained move below Thursday’s low of 53,240 could trigger further downside, with potential targets at 52,500 and 51,800 in the coming sessions. These levels correspond to the 61.8% Fibonacci retracement of the rally from the January 2025 lows and coincide with the low of the breakout candle formed in April 2025. On the upside, the Thursday gap zone between 54,689 and 54,150 is expected to act as immediate resistance. The overall bias remains bearish as long as the index stays below this zone.

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