Indian equity markets ended the penultimate week of FY2025-26 in a state of acute stress. The Nifty 50 fell 1,299 points over the five sessions ended March 13 — a 5.3 per cent decline that was the sharpest weekly loss in nearly three years — while the BSE Sensex surrendered 4,355 points, or 5.5 per cent, over the same period. The proximate cause was a geopolitical shock of a scale that has rewritten global energy market assumptions: the outbreak of active military conflict between the United States, Israel, and Iran, and Iran’s subsequent closure of the Strait of Hormuz.
The Market in Numbers
The Nifty 50 closed at 23,151.10 on March 13 — down 488.05 points or 2.06 per cent on the day alone — after opening at 23,462.50, touching an intraday low of 23,112.00, and finishing near the bottom of the session’s range. The day’s breadth was among the weakest of the year: 47 of the 50 Nifty constituents declined, with only three ending in positive territory. L&T led losses at 7.38 per cent, followed by Hindalco at 6.07 per cent, Tata Steel at 5.41 per cent, and JSW Steel at 4.49 per cent — a pattern that concentrated the heaviest damage in metals, infrastructure, and capital goods. Worldbank
On a sectoral basis, the Nifty Auto index fell the most during the week, losing 10.6 per cent. Nifty Bank declined 7 per cent, Nifty India Defence lost 7 per cent, Nifty Metal dropped 5.9 per cent, and Nifty Financial Services fell 5.7 per cent. Mid and small caps also saw significant declines, with the Nifty Midcap 100 down 4.59 per cent and Nifty Smallcap 100 down 3.66 per cent over the five sessions. IMF
The Nifty’s 52-week range now spans from 21,743.65 to 26,373.20 — meaning the index has given back approximately 87 per cent of the gains between its 52-week low and high, and is currently closer to its annual floor than to its ceiling. IBEF
The Geopolitical and Energy Shock
The week’s losses did not occur in isolation. They followed an escalating geopolitical sequence that began on February 28, 2026, and has restructured the global oil supply outlook in a matter of days.
The International Energy Agency’s March 2026 Oil Market Report, published in the week of March 9, confirmed the magnitude of the disruption: US and Israeli joint airstrikes on Iran on February 28 triggered Iran’s closure of the Strait of Hormuz, through which approximately 20 million barrels per day of crude and products normally transit. The IEA estimates that crude production is currently being curtailed by at least 8 million barrels per day, with a further 2 million barrels of condensates shut in. On March 11, IEA member countries unanimously agreed to release 400 million barrels from emergency strategic reserves — an unprecedented coordinated release — to mitigate the market impact. India Infoline
Brent crude prices surged over 20 per cent in a single session on March 9, with prices reaching $119.50 per barrel at the intraday high. WTI posted its largest single-week gain in history — 35.6 per cent — over the week ending March 13. The surge followed the closure of the Strait of Hormuz, through which approximately one-fifth of global oil demand typically transits, and the subsequent halt in tanker movements. ThePrint
The geopolitical scenario playing out is categorically different in its energy market implications from the short-lived June 2025 US-Iran confrontation. The Allianz Research assessment, published March 3, notes that US strikes on key Iranian military and civilian infrastructure — and the deaths of senior Iranian leadership — have “raised questions about the future direction of the country,” signalling to markets that a rapid diplomatic resolution is unlikely and that the current Iranian government has incentives to maintain high prices to fund its defensive posture. International Monetary Fund
The Impact on India
India’s exposure to the oil price shock is structural and immediate. India is the world’s third-largest importer of crude oil, with its energy import bill constituting a significant share of the current account. The surge in crude to $119.50 per barrel represents a cost increase that flows directly into India’s trade deficit, inflation trajectory, currency, and the earnings of every Indian company with fuel-linked input costs — from auto manufacturers and airlines to chemicals and logistics companies. IMF
FII activity on March 13 showed net selling of ₹10,716.64 crore by Foreign Institutional Investors, partially offset by domestic institutional buying of ₹9,977.42 crore. The FII outflow pattern has been persistent: consistent selling through the second week of March, attributed to the oil shock’s inflationary implications for India and the broader risk-off global positioning triggered by the West Asia conflict. International Monetary Fund
What the Old Analyst Targets Mean Now
The research brief for this article cited a range of broker targets for Nifty at FY26 close — Nomura at 26,140, Kotak at 29,120 as base case, Morgan Stanley implied near 27,500, and Axis Securities at 28,100 to 29,500. All of these targets were set in the period between June and December 2025, before the February 28 escalation.
Nomura’s 26,140 target — the most recently revised figure before the conflict, set in June 2025 — was calculated on a 21x price-earnings multiple on FY27 earnings estimates. The note, authored by Saion Mukherjee and Amlan Jyoti Das, noted at the time that consensus FY26 and FY27 earnings had already been revised down 7.6 per cent and 6.3 per cent respectively from September 2024 levels, and flagged earnings cut risks of a further 4 to 8 per cent for FY27. The World Bank At the current level of 23,151, the Nifty is trading approximately 11.5 per cent below Nomura’s pre-conflict target of 26,140. Whether Nomura or any other brokerage has revised its target downward following the February 28 escalation is not available in primary form as of this writing — but the gap between the pre-conflict target and the current market level reflects the shock that has been absorbed since those targets were published.
BofA’s December 2025 analysis had flagged that consensus FY26 earnings had been revised down 11 per cent and FY27 earnings down 6 per cent, with its own forecasts of 7 per cent and 14 per cent FY26 and FY27 earnings growth. Those projections assumed oil prices in a range consistent with pre-conflict levels — a baseline that $119 crude has unambiguously violated. Worldbank
Technical Indicators and Near-Term Support
Technical analysis from multiple platforms shows the Nifty RSI in the mid-to-low 20s — a level that technically indicates oversold conditions — but without confirmation of a reversal signal. The MACD indicator remains deep in negative territory, reflecting persistent bearish momentum in the trend. Key support levels are identified at 23,000 and the 22,500 zone, where analysts note a broader long-term rising trendline; key resistance has shifted down to approximately 23,600 to 23,800, which has turned from support to barrier following the week’s breakdown. Libertify
The term “oversold” describes a technical condition — not a guarantee of recovery. Oversold markets can remain oversold or extend further in the presence of a genuine fundamental shock. The oil price surge represents exactly that kind of shock: it directly affects India’s current account, inflation, corporate earnings, and global risk appetite simultaneously. Whether the market finds a floor before FY26’s March 31 close or continues to test the 22,500 level depends materially on whether the Strait of Hormuz situation de-escalates, stabilises, or deteriorates further — an outcome that no market analyst, brokerage target, or technical indicator can reliably predict.
Note to readers: This article reports factual information on equity market levels, macroeconomic developments, and published analyst research for journalistic and informational purposes only. It does not constitute investment advice, a buy or sell recommendation, or a prediction of future index levels. Equity markets are subject to risk; analyst targets reflect conditions at time of publication and can become outdated. Readers should consult a SEBI-registered investment advisor before making investment decisions.