Market Outlook - March 2026

Equity Market Performance
It was a month of wild swings for Indian equity markets. After
a weak start post the budget, equities recovered. However,
global geo-political concerns led to reactions again, with
Nifty posting its third straight monthly decline, ending down
0.6%. Broader markets were slightly better, with the Mid-cap
index gaining 1.2%, whereas the small-cap index rising a
marginal 0.3%. Except the IT Sector, rest of the sectors ended
in green, led by in Power (+9%), Consumer Durables (+7%)
and Health care (+6%). Global equity markets continued
to show a mixed performance over the past month. Korea,
Thailand, and Taiwan led the rally with robust returns. In
contrast, markets in Indonesia, Malaysia, and Hong Kong
witnessed marginal to moderate declines. A redeeming
trend was FPIs turning net buyers after months to the tune
of US$2 billion worth of Indian equities. DIIs continued their
optimism buying US$4.2 billion of Indian equities

Market Update
Sensex and Nifty experienced significant volatility
through February 2026, driven largely by key economic
announcements and geopolitical events. Markets initially
rose following the Union Budget 2026–27, and the landmark
India–US trade deal. However, gains were briefly interrupted
by a sell off in IT stocks after the launch of a new AI automation
tool. Indices recovered as the RBI held the repo rate steady
at 5.25% and optimism grew around the conclusion of the
India–US trade agreement. Mid month, markets dipped
sharply due to geopolitical tensions between the US and Iran
and a spike in global crude prices. again, a modest rebound,
persistent concerns over AI led disruptions again weighed
on sentiment.