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Below the Quote on Weekly Note Mar 28 by Mr. Ajit Mishra – SVP, Research, Religare Broking Ltd

Volatile Week Ends Lower Amid Geopolitical Uncertainty and Weak Global Cues

Market Summary

Markets ended the week on a weaker note, reflecting heightened volatility amid fluctuating global cues and escalating geopolitical tensions in the Middle East. The week was marked by sharp swings, with early losses driven by concerns over energy supply disruptions, a weakening rupee—which touched a record low near 94/USD—and rising volatility. This was followed by a midweek recovery on hopes of a temporary de-escalation in US-Iran tensions. However, renewed selling pressure on Friday erased the gains, dragging indices lower. Consequently, both benchmark indices, Nifty and Sensex, declined by over 1% each to close at 22,819.60 and 73,583.22, respectively.

Key Market Drivers

Global developments remained the primary driver of market direction. Escalating tensions in West Asia, particularly the ongoing US-Iran conflict, heightened concerns over energy supply disruptions, with reports indicating significant damage to energy infrastructure across the region. Although a temporary pause in hostilities and ongoing diplomatic engagements offered brief relief, uncertainty persisted and continued to weigh on investor sentiment.

Currency weakness further compounded concerns, with the rupee nearing the 95/USD mark. Crude oil prices remained volatile, rebounding toward the $105 level after correcting to around $93, thereby sustaining inflationary concerns.

On the domestic front, economic indicators showed signs of moderation. The HSBC Flash Composite PMI eased to 56.5 in March from 58.9 in February, indicating slower expansion in both manufacturing and services due to softer domestic demand and geopolitical disruptions. However, the medium-term growth outlook remains constructive, with S&P Global revising India’s FY27 GDP growth forecast upward to 7.1%, supported by steady domestic demand and structural resilience.

Sectoral Snapshot

Sectoral performance reflected broad-based weakness with intermittent recovery phases. Realty, metal, and banking sectors were among the key laggards, primarily due to inflation concerns and currency weakness. In contrast, IT and pharma managed to end in the green, offering some resilience amid broader market pressure.

Broader markets also edged lower, with midcaps declining approximately 1.38%, while smallcaps showed relative resilience with a milder decline of around 0.63%. The overall trend indicates risk aversion and limited participation, with a defensive bias across sectors.

Key Events to Watch

The upcoming week is expected to remain influenced by global macro developments, particularly crude oil price trends and progress in US-Iran ceasefire negotiations, which will be critical in shaping market sentiment. Stability in the rupee will also be important for any revival in foreign institutional flows.

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