Monday’s selloff was broad-based and severe. India VIX surged over 17 per cent to close near 26.8 — its highest since June 2024 — reflecting extreme fear among participants
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With US President Donald Trump having extended his 48-hour ultimatum to Iran by five days, Gift Nifty, along with global stocks, recovered sharply. However, analysts cautioned against reading too much into it.

Currently, Gift Nifty futures are trading about 800 points gain at 23,280, after recovering to hit a high of 23,500 from the day’s low of 22,453.

Bear Pressure

Markets are at a critical juncture, with the trajectory of the US-Iran conflict and crude oil prices set to determine whether a sharp recovery or a deeper slide lies ahead, analysts said, after the Sensex crashed 1,836 points and the Nifty 50 closed at 22,512 — its lowest in 11 months. March 2026 is on course to be the worst monthly performance for Indian indices since the Covid-19 crash of 2020, with the Nifty down nearly 12 per cent this month alone.

Rajesh Palviya, Head of Research, Axis Securities, said the market structure remained weak and any sustained recovery hinged entirely on geopolitical developments. “…market is desperate to give a sharp up move from the current level… maybe we could see 5–6 per cent kind of jump that cannot be ruled out because market is highly oversold…” he said, adding that a failure to de-escalate could push the Nifty toward the April 2024 low of 21,700–22,000.

Palviya also flagged that supply chain disruptions from the conflict zone would weigh on multiple sectors for at least one to two quarters, with inflation emerging as a secondary concern. “…a lot of money is waiting on the sideline. The confidence and sentiments are not supportive and that is what everybody is waiting for — whether some certainty towards the war comes…” he added.

Kranthi Bathini, Director – Equity Strategy, WealthMills Securities, described the current market phase as one of heightened volatility, noting that the Nifty had violated the 23,000 mark over the last 22 trading sessions since the war began. He identified crude oil and the rupee as a twin burden on Indian markets. “…it is a double whammy — on one hand the rise of crude oil, on the other hand rupee depreciation — creating extra pressure on Indian markets in the medium to short term…” he said.

Bathini cautioned that while relief rallies were possible, sustainability was the real test. “…for that sustainability, we need to see a gradual downtrend in crude oil prices…” he said, adding that any de-escalation of geopolitical tensions would have a direct positive impact on India given crude’s outsized role in the current account deficit and inflation trajectory.

Panic Selling

Monday’s selloff was broad-based and severe. India VIX surged over 17 per cent to close near 26.8 — its highest since June 2024 — reflecting extreme fear among participants. Nifty Midcap 100 and Nifty Smallcap 100 each fell over 3.9 per cent, and of the Nifty 500 universe, only 15 stocks ended in positive territory. The rupee touched a fresh all-time low near 93.97 against the US dollar, while Brent crude hovered around $112 per barrel. Bank Nifty is now down nearly 17 per cent from its all-time high in just 33 trading sessions, with the broader market structure continuing to form lower highs and lower lows.

Published on March 23, 2026