Indian stock markets ended the week on a sharply negative note as escalating tensions in the Middle East triggered risk-off sentiment among investors. Benchmark indices reversed earlier gains, with profit booking and global uncertainties pushing the markets lower.
On Friday, March 6, the BSE Sensex dropped 1,097 points, or 1.4%, to close at 78,918.90, while the NSE Nifty 50 declined 315 points, or 1.3%, ending the session at 24,450.45. The sell-off capped a weak holiday-shortened trading week in which both indices lost nearly 3%.
Market analysts pointed to the rapidly intensifying Iran–Israel conflict, rising crude oil prices and sustained foreign institutional investor (FII) outflows as the primary factors behind the decline.
According to Ajit Mishra, Senior Vice President of Research at Religare Broking, geopolitical developments in West Asia combined with the spike in energy prices created widespread selling pressure across sectors.
He noted that market breadth remained weak during most trading sessions of the week, with investors adopting a cautious stance amid global uncertainty.
Volatility Expected to Persist
Experts believe market volatility could continue in the coming week as investors track developments in the Middle East and their potential impact on global trade and commodities.
Ponmudi R, CEO of Enrich Money, said markets will closely monitor crude oil prices and geopolitical developments, particularly disruptions around the Strait of Hormuz, a critical route for global energy supplies.
The rising tensions have already started affecting trade flows and economic activity, raising concerns about potential supply chain disruptions and inflationary pressures.
Major Factors That Could Move the Market
Geopolitical tensions:
The ongoing Iran–Israel conflict remains a major concern for global markets. Statements from world leaders and developments in the region are expected to influence investor sentiment in the coming days.
Crude oil prices:
Oil prices surged significantly amid fears of supply disruptions. Brent crude climbed to $92.69 per barrel, rising about 8.5% in a single day and nearly 30% over the week.
Precious metals movement:
Gold and silver prices also moved higher as investors sought safe-haven assets following weaker US payroll data that increased expectations of a possible Federal Reserve rate cut.
Institutional investment flows:
Foreign institutional investors continued to reduce exposure to Indian equities. On March 6, FIIs sold shares worth ₹6,030 crore, while domestic institutional investors (DIIs) purchased equities worth ₹6,972 crore, providing some support to the market.
So far in 2026, FIIs have sold ₹60,364 crore worth of Indian equities, whereas DIIs have invested a net ₹1.28 lakh crore, largely supported by strong mutual fund SIP inflows.
VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said foreign investors are unlikely to return strongly until crude oil prices stabilise and there is greater clarity on the geopolitical situation.
Key Data To Watch
Investors will also focus on India’s Consumer Price Index (CPI) inflation data, scheduled for release on March 12, which could provide important insights into inflation trends amid rising energy costs.
From a technical standpoint, analysts suggest markets may remain cautious in the near term as investors continue to assess global risks and economic signals.
Originally published on 24×7-news.com.
