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Below the Quote on Daily Market Commentary for March 9th 2026 by Siddhartha Khemka - Head of Research, Wealth Management, Motilal Oswal Financial Services Ltd

Indian equity markets witnessed a sharp sell-off, with the Nifty falling to 23,697—nearly 10% below its all-time high of 26,373 but managed to close above 24,000 mark—as escalating geopolitical tensions and a sharp spike in crude oil prices triggered broad risk-off sentiment. The decline followed a surge in oil prices of around 26% in early trade, the highest level since 2022, amid intensifying conflict in West Asia and fears of supply disruptions, raising concerns for oil-importing economies like India. Fluctuations in crude oil prices are expected to weigh on sectors where oil is a key input cost. Oil marketing companies, aviation, paints and cement stocks could face pressure due to rising and volatile crude prices. Escalating tensions between Iran and Israel and the resulting instability in the Middle East heightened global risk aversion, weighing on investor confidence. For India, the sharp move in crude prices raises concerns over higher inflation, a widening current account deficit and potential pressure on economic growth, all of which dampened market sentiment. The Nifty eventually closed at 24,028, down 422 points (-1.7%), recovered from the day’s lows during the mid-session. The rebound was largely driven by selective buying in beaten-down large-cap and additionally, crude oil prices eased slightly from their early spike, which helped calm panic selling. Broader markets extended losses with Midcap and Smallcap down 2% and 2.2% respectively. Market volatility surged to a multi-month high, reflecting uncertainty over the duration of the conflict and its potential economic impact. Sectorally, all major indices ended in the red, with PSU Banks and Auto stocks emerging among the worst performers. Banking stocks came under pressure amid concerns that higher crude prices could weigh on economic growth and tighten liquidity conditions. Meanwhile, the Nifty Auto index fell 4.1%, as the sector faced multiple headwinds including rising raw material costs and ongoing supply chain disruptions, particularly shortages of memory chips impacting production. Going ahead, markets will closely monitor developments in West Asia and their potential impact on global energy supplies and crude oil prices, as uncertainty around the duration and intensity of the conflict is likely to keep investor sentiment cautious in the near term.

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