Iran’s olive branch sparks Sensex surge; index reclaims 80,000

by Hansraj Agrawal | Mar 5, 2026 | Business

Equity benchmarks staged a sharp recovery on Thursday, snapping a three-session losing streak, after rumours surfaced that Iran had conditionally offered to abandon its nuclear programme raised hopes of de-escalation in the ongoing US-Israel-Iran conflict. The BSE Sensex surged 899.71 points, or 1.14 per cent, to close at 80,015.90, while the Nifty 50 gained 285.40 points, or 1.17 per cent, to settle at 24,765.90. Earlier in the session, both indices had given up a portion of their intra-day gains after an initial surge.

The catalyst for the rally was a combination of geopolitical and trade-related developments. The US announced security and insurance guarantees for commercial shipping through the Strait of Hormuz, including the possibility of military escorts for oil tankers, easing fears of disruption to global energy supplies. Separately, a US Deputy Secretary indicated that India-US bilateral trade deal negotiations are nearing completion. Vinod Nair, Head of Research at Geojit Investments, said: “…investor sentiment improved after comments from the US deputy secretary suggested that an India-US trade deal may be nearing completion… Market momentum strengthened toward the close after reports that Iran had conditionally offered to abandon its nuclear program…”

Broader markets outperformed the frontline indices. The Nifty Midcap 100 and Nifty Smallcap 100 indices gained 1.52 per cent and 1.58 per cent, respectively. On the BSE, 2,749 stocks advanced against 1,515 declines, while 133 remained unchanged. However, 381 stocks hit fresh 52-week lows, against only 66 at 52-week highs, reflecting lingering stress in pockets of the market.

Broad-based gains

Sectorally, the gains were broad-based. The Nifty Metal index advanced 2.29 per cent, supported by supply disruptions in West Asia, including shipment interruptions and smelter shutdowns that tightened global supply. The Nifty Infra index rose 2.21 per cent, Nifty Auto climbed 1.86 per cent and the India Defence index gained 2.5 per cent, buoyed by expectations of higher defence spending amid escalating West Asia tensions. The Nifty IT index was the lone sectoral loser, slipping 0.59 per cent, partly weighed down by the rupee’s recovery.

Ajit Mishra, SVP Research at Religare Broking, noted: “…a sharp surge in the final hours helped the index retest the hurdle near the 24,800 level… Elevated crude oil prices and lingering geopolitical uncertainties continue to keep participants cautious.”

Among individual stocks, Mazagon Dock was a standout gainer, surging around 8 per cent on reports of a potential ₹99,000-crore defence deal. BSE Ltd rose over 4 per cent after receiving SEBI approval to launch index derivatives on two additional indices — Sensex Next 30 and BSE Focused Midcap Index. Adani Ports and Hindalco Industries were among the top Nifty performers. On the losing side, Tech Mahindra and ICICI Bank were the key laggards, weighed down by profit booking and subdued sectoral sentiment.

Decline in fear

Market volatility cooled sharply. India VIX plunged nearly 15.53 per cent to close at 17.8575, signalling a meaningful decline in fear among participants. Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services, said: “…broader markets also rebounded after three consecutive sessions of losses… The India Defence index rose 2.5 per cent, supported by broader market recovery and renewed investor interest amid escalating tensions in West Asia…”

The Indian rupee staged a modest recovery, trading at 91.50 against the US dollar, gaining 0.55 paise, supported by suspected RBI intervention. Jateen Trivedi, VP Research Analyst at LKP Securities, said: “…the recovery suggests efforts to stabilise the currency amid rising volatility driven by geopolitical tensions and commodity price movements… dollar index movement and developments in the West Asia conflict will remain key drivers for the rupee as FII’s position gets influenced on crude rates.” Technically, support for the rupee is placed near 91.10, with resistance at 92.00.

Gold traded in a sideways range between ₹1,60,000 and ₹1,63,000, with CME gold hovering near the $5,150 level. Trivedi added: “…market focus now shifts to key US data releases — Initial Jobless Claims, Unemployment Rate and Nonfarm Payrolls. These data points will play an important role in shaping expectations around the Federal Reserve’s interest rate outlook…”

Global sentiment

Global sentiment also provided a tailwind. Asian markets rebounded, with South Korea’s KOSPI surging 10-12 per cent after the government activated a $68-billion market stabilisation fund, while Japan’s Nikkei gained nearly 1.8 per cent.

Technically, the Nifty holds immediate support at 24,600-24,550, while resistance is positioned at 24,920-24,950. Aakash Shah, Technical Research Analyst at Choice Equity Broking, noted the RSI at 37.55 has recovered from oversold levels, though follow-through buying is needed for confirmation. Bank Nifty is expected to consolidate between 58,000 and 60,000 in the near term, with a breakout above 59,400 or breakdown below 58,000 determining the next directional move.

Looking ahead, markets will closely track geopolitical developments in West Asia, global crude oil prices and Friday’s US Nonfarm Payrolls data. Analysts expect the Nifty to consolidate between 24,300 and 25,200 in the coming sessions, with a sustained close above 25,000 needed to confirm continuation of the recovery. A breakdown below 24,300 could, however, expose the index to deeper support around 24,200-24,000.

Published on March 5, 2026

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RBI data suggest end of repo rate cut transmission into lending rates

by Hansraj Agrawal | Mar 5, 2026 | Business

Weighted average lending rate on fresh rupee loans of banks rose 39 bps to 8.67 per cent in January 2026 from 8.28 per cent in December 2025
| Photo Credit:
utah778

The transmission of repo rate cuts into lending and deposit rates may be over, as interest rates on fresh loans went up even as interest rates on fresh deposits barely came down, going by RBI data for January 2026.

This development comes amid deposit growth (at 12.42 per cent year-on-year) lagging credit growth (14.40 per cent) as on January 31, 2026.

That transmission of the repo rate cuts into lending rates may have concluded can be gauged from the fact that the weighted average lending rate (WALR) on fresh rupee loans of scheduled commercial banks (SCBs) rose 39 bps to 8.67 per cent in January 2026 from 8.28 per cent in December 2025.

WALR in December 2025 had declined by 43 bps from 8.71 per cent in November 2025.

The Reserve Bank of India’s rate-setting monetary policy committee cumulatively reduced the policy repo rate by 125 basis points (bps) during the February-December 2025 period from 6.50 per cent to 5.25 per cent.

Madan Sabnavis, Chief Economist, Bank of Baroda, observed that banks may be upping the spreads on fresh loans linked to external benchmarks such as the repo rate, resulting in increase in the WALR of these loans. External benchmark-linked loans such as retail and MSME loans account for almost 60 per cent of banks’ overall loans.

He said: “There’s a limit to which banks can keep lowering the interest rates….Yield of the 10-year benchmark Government security is fairly intransigent in the 6.65-6.70 per cent range. And the fact that banks are now no longer able to pass on repo rate cuts as they’re losing deposits itself shows that the transmission is over.”

Marginal cost up

The one-year median marginal cost of funds-based lending rate (MCLR) of SCBs increased to 8.45 per cent in February 2026 (back to the December 2025 level) from 8.40 per cent in January 2026, per RBI data on lending and deposit rates.

The weighted average domestic term deposit rate on fresh rupee term deposits of SCBs just about nudged down to 5.66 per cent in January 2026 (5.67 per cent in December 2025).

V Rama Chandra Reddy, Head – Treasury, Karur Vysya Bank, said: “I think, the lending rates have bottomed out….banks are either increasing spreads on fresh floating rate loans or giving more fixed rate loans.”

Sabnavis said that banks’ are raising short-term bulk deposits to offset the relatively slower growth in retail deposits (as compared to loan growth). And this explains why the deposit rates are sticky.

Published on March 5, 2026

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Google’s Play Store concessions fail to impress Indian entrepreneurs fighting antitrust case

by Hansraj Agrawal | Mar 5, 2026 | Business

Indian entrepreneurs who led the antitrust fight with the tech giant in India, are not impressed and see it as a status quo in terms of their case against Google.

Google may have ended its five-year antitrust battle with Epic Games on Wednesday but Indian entrepreneurs who took the tech giant to court in India say that Google’s policies are still “rent-seeking” and the overhaul does not change it.

Google announced major concessions to its Play Store policies on March 4, and this includes allowing alternative payment systems inside apps, making third-party app stores easier to install on Android, letting developers direct users to external payment sites, and lowering app store commissions for developers among others. The reforms apply globally in platform policy in phases with a 2027 rollout for markets like India.

Antitrust fight

However, Indian entrepreneurs who led the antitrust fight with the tech giant in India, are not impressed and see it as a status quo in terms of their case against Google.

“The fundamental question remains — what services are we actually paying for? For any significant download volume, we are already forced to spend massive amounts on advertising within their own platform. To then demand an additional transaction fee for a customer we acquired and a payment they didn’t process is rent-seeking at its worst,” Shaadi.com founder Anupam Mittal told businessline.

When asked if Google’s recent changes address India’s concerns, he says that Google is “attempting to bypass the spirit of the CCI’s previous orders” by rebranding their fees. “Earlier, when the law turned against Google Play Billing, they introduced ‘User Choice Billing’ (UCB). Now, they have unbundled the commission into a ‘Service Fee’ and a ‘Payment Fee’. By allowing third party billing but still demanding a heavy ‘Service Fee’, the total cost to the developer remains virtually unchanged,” he said.

Unfair levy

Murugavel Janakiraman, founder, Matrimony.com, another vocal critic and part of the complainants, said that despite the changes, developers will still have to pay a fee to Google to host their apps, which is akin to a cut on revenue. It is still an unfair levy and this has been the core issue in why we took the tech company to court earlier, and the case is still under investigation, he added.

Shaadi.com, Matrimony.com, along with other Indian start-ups and industry bodies like Alliance of Digital India Foundation (ADIF), moved the Competition Commission of India (CCI) back in 2020 alleging anti-competitive practices by Google which had then made the use of Google Play billing mandatory.

Google then subsequently introduced User Choice Billing to comply with the CCI order. User Choice Billing allows developers to show users an alternative billing system alongside Google Play Billing. However, the companies still argued that Google’s service fee levy was unfair and that the tech giant was abusing its monopoly power over the Android app marketplace.

Google did not respond to businessline’s queries on whether its policy overhaul impacts the current litigation in India.

Published on March 5, 2026

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Coforge, Persistent Systems, Tech Mahindra, Mphasis, HCL Tech dip as Nifty IT slips, Kotak warns of Gen AI disruption risks, Infosys, TCS, Wipro flat

by Hansraj Agrawal | Mar 5, 2026 | Business

Erasing early gains, the Nifty IT index slipped into the red on Thursday, as Kotak analysts flagged rising disruption risks from generative AI for the sector.

The Nifty IT index dipped 0.59 per cent to settle at 30,126.80, hitting an intraday low of 29,823.15 in today’s trade after a positive opening at 30,554.85 from the previous close of 30,305.25.

Nifty IT falls 1.5 per cent after erasing early gains.

Coforge, Mphasis, LTIMindtree lead broad IT sell-off.

Kotak cuts EPS estimates and target prices.

Brokerage flags rising Gen AI disruption risks.

The index had staged resilience in the previous trading session despite the broader market fall, emerging as the only index closing in the green. However, sentiment weakened in the latest session as selling pressure spread across the pack.

MphasiS, Persistent Systems, Coforge, Tech Mahindra and LTM ended as major losers under the index, shedding up to 2 per cent. Heavyweights Infosys, TCS and Wipro ended nearly flat.

Target price cuts across IT pack

Factoring in slower growth and higher disruption risk, Kotak Institutional Equities has trimmed earnings estimates and reduced fair values across the sector. The brokerage cut EPS estimates by 1–3 per cent and reduced fair values by roughly 15–28 per cent across companies under coverage, while also raising cost of equity assumptions by 50–100 basis points.

Among large-cap IT companies, Kotak now values TCS at ₹3,090 per share, Infosys at ₹1,530 and Tech Mahindra at ₹1,615. It assigns a target price of ₹1,425 for HCLTech and ₹190 for Wipro.

For mid-tier companies, the brokerage sets a target price of ₹4,430 for LTIMindtree, ₹1,620 for Coforge, ₹4,615 for Persistent Systems, ₹2,275 for Mphasis and ₹620 for Hexaware.

The report indicates that Tier-1 IT stocks are likely to trade at around 13–18 times FY2028 earnings, while mid-tier firms could command valuations of 18–27 times.

Preferred picks in the sector

Despite the cautious outlook, Kotak continues to see selective opportunities within the IT space. Among Tier-1 companies, the brokerage prefers Infosys, TCS and Tech Mahindra, noting that current valuations already reflect subdued growth expectations and offer relatively attractive free cash flow and payout yields.

In the mid-tier segment, Coforge and Hexaware are the preferred names due to comparatively inexpensive valuations and potential for stronger growth.

It has changed the rating of Persistent Systems from sell to reduce.

Kotak flags higher Gen AI disruption risks

A recent report by Kotak Institutional Equities highlighted rising risks from generative AI adoption, which it believes could trigger revenue deflation for IT services companies in the coming years.

The brokerage now factors in around 3–3.5 per cent revenue deflation for the global IT services industry in FY2027–28, higher than its earlier estimate of 2–3 per cent. The increase reflects faster innovation cycles in AI models, growing enterprise adoption and an AI-first approach among developers and technology firms.

Kotak noted that while overall technology spending is expected to remain robust due to generative AI investments, a larger share of the spending may accrue to hyperscalers and AI labs rather than traditional IT services providers.

As a result, the brokerage expects global IT services growth to remain moderate over the next decade, projecting industry expansion of around 4–5 per cent annually in dollar terms.

Challengers may outperform incumbents

Kotak believes mid-tier “challenger” firms could gain an edge over incumbents in the evolving technology landscape.
Large IT companies may face pressure from revenue deflation given their sizeable base, while smaller players have greater flexibility to disrupt their own offerings and capture emerging opportunities in AI-driven services.

At the same time, the brokerage cautioned that application development and customer BPO services could see the highest productivity-driven deflation from AI adoption, while areas such as infrastructure management and consulting may remain relatively resilient.

Long-term relevance intact despite near-term headwinds

While generative AI is expected to reshape the industry, Kotak does not believe the shift will eliminate the need for IT services companies. Instead, it expects the sector to remain structurally relevant over the long term, even as the pace of growth moderates and productivity gains reshape revenue models.

However, the brokerage warned that evolving AI capabilities and enterprise adoption trends could lead to periodic volatility in IT stocks as investors reassess the sector’s long-term growth trajectory.

Mid-tier IT firms best placed to benefit from AI-led transition: Choice

According to Choice Institutional Equities, the IT services sector outlook remains neutral. Based on industry channel checks with senior technology leaders, the brokerage believes enterprise adoption of AI will be gradual due to legacy system complexity, regulatory constraints, data-security concerns and the need for human oversight in mission-critical processes. While GenAI may drive modest pricing deflation of about 2–3 per cent in existing engagements, it is also expected to create new service opportunities in areas such as AI infrastructure, governance, data engineering and legacy modernisation.

Choice noted that mid-tier IT firms are structurally better positioned than large Tier-I players to benefit from the AI-led transition due to their agility, stronger data-engineering capabilities, diversified vertical exposure and faster margin recovery potential.

The brokerage’s long-term stock picks in the sector are Coforge, Persistent Systems, Happiest Minds Technologies and KPIT Technologies, which it sees as well placed to capture the shift toward AI-enabled, platform-led service models.

Published on March 5, 2026

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L&T Finance launches specialised ‘Spoorthi’ programme for women entrepreneurs

by Hansraj Agrawal | Mar 5, 2026 | Business

To be eligible, the woman borrower must be a key person managing the business with at least a 50% stake in non-individual entities, and her income must constitute at least 50% of the total appraised income when clubbing with other borrowers.

L&T Finance Ltd (formerly known as L&T Finance Holdings Ltd) has launched a specialised “Spoorthi“ programme for women entrepreneurs, whereby specific relaxations and benefits, including extended loan tenors of up to 25 years for the purchase of house property or Loan Against Property (LAP) for business expansion and working capital, will be offered to them for specific profiles.

Furthermore, the Non-Banking Financial Company (NBFC) will offer industrial LAP tenors for up to 12 years. The programme has also introduced enhanced eligibility norms such as higher debt-to-income ratios to provide greater financial flexibility, LTF said in a statement.

Eligibility criteria

To be eligible, the woman borrower must be a key person managing the business with at least a 50 per cent stake in non-individual entities, and her income must constitute at least 50 per cent of the total appraised income when clubbing with other borrowers, per the statement.

Additionally, the business must show an annual cash profit of at least ₹5 lakh as per the latest Income Tax Return (ITR) and must not have incurred a net loss in the last two years.

The programme will initially be rolled out in major metropolitan hubs, including Mumbai MMR, Delhi NCR, Bengaluru, Chennai, Pune, Ahmedabad, Kolkata and Hyderabad.

Sudipta Roy, Managing Director & CEO, said, LTF is committed to supporting women borrowers because they consistently demonstrate a disciplined and strong repayment history, which makes them ideal borrowers.

“By launching Spoorthi, LTF aims to harness this reliability while providing women with the necessary capital to scale their enterprises and secure their personal assets, ultimately contributing to a more inclusive and robust financial ecosystem,” he said.

By reducing the business vintage (that is age of a company) requirement to just two years for loans up to ₹75 lakh, LTF is making it easier for emerging women-led businesses to access the high-value credit they need to thrive, said Jinesh Shah, Chief Executive – Urban Secured Assets & Third-Party Products.

Published on March 5, 2026

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No significant upside to /bbl Brent price estimates for 2026: Fitch

No significant upside to $63/bbl Brent price estimates for 2026: Fitch

by Hansraj Agrawal | Mar 5, 2026 | Business

New Delhi, Mar 5 (PTI) The $63/bbl estimation for average Brent crude price for 2026 is unlikely to see any significant upside as the Strait of Hormuz closure would be only temporary and global oil market oversupply should limit oil price rises, Fitch Ratings said.

Fitch said the strait is not formally closed but vessels are increasingly avoiding it given the risk of attack by Iran or its proxies. Oil majors have halted shipments for safety reasons, and insurers are cancelling war risk cover for vessels.

“We do not expect significant upside to our December 2025 assumption of an average Brent oil price of $63/bbl for 2026,” Fitch said, adding it expects this effective closure of the strait to be temporary.

Also, global oil market oversupply, should limit oil price rises and mitigate any potential disruptions to Iranian oil supply, it added.

Brent crude prices have already risen to $82-84 per barrel from an average of $66-67 in January-February 2026.

The US and Israel jointly launched military strikes on Iran on February 28. Iran responded by firing drones and missiles at Israel and US military installations around the Gulf, and also at the global business hub of Dubai.

The Strait of Hormuz is a vital artery for seaborne oil transportation, with limited alternative routes. The crisis in West Asia has led to spiralling prices of global oil and natural gas. The Strait is a narrow 33-kilometre passage connecting the Persian Gulf to the Arabian Sea.

Fitch said prior to the conflict, around 20 million barrels per day (MMbpd) of crude oil and petroleum products transited the strait, accounting for about a quarter of global seaborne oil trade and a fifth of global oil consumption.

About half of the oil volumes transported through the strait are exports from Saudi Arabia and the UAE, with the remainder from Iraq, Kuwait and Iran. About half of these exports go to China and India.

“A protracted closure would affect both exporting and importing countries and therefore is not our baseline assumption. If the strait were to remain effectively closed for a protracted period, naval protection for tanker navigation could be considered, as occurred during the 1980s Iran–Iraq war,” Fitch said.

In addition, the global oil market is oversupplied, which should limit the geopolitical risk premium and cap risks to oil price increases, Fitch said.

Global supply growth exceeded demand growth in 2025. Fitch expects this trend to continue in 2026. Supply increased by about 3MMbpd in 2025, while demand grew by well below 1MMbpd, Fitch added.

While Iran is a sizeable oil producer, producing about 3.5 MMbpd and exporting about 2 MMbpd, it accounts only for about 3.5 per cent of global crude oil production.

Fitch said any potential supply disruption would be offset by global market oversupply.

However, the duration and intensity of the increasingly regional conflict remain uncertain, Fitch said, adding oil price volatility would rise if there were to be any material disruption to Iranian oil production.

“Any protracted blockage of the strait or material and sustained damage to the region’s oil and gas production and transportation infrastructure would materially affect oil markets and likely result in a more material rise in our base case 2026 oil price assumption,” Fitch said.

Published on March 5, 2026

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