Global Markets Shake Off, Regional War turmoil, high volatility, market sentiment rebound in hope of ceasefire and conflict resolution
Performance recap March and April 2026 review with key drivers
The Indian capital Market in line with global Markets saw sharp contrast in performance for the month of March 2026 vs current April month. Nifty & Sensex saw big decline of -11% in March whereas in current month has seen sharp recovery of 7% as on date. Nifty closed March month at 22331 which was very close to US Tariff low witnessed on 7th Apr’25 when nifty was at 21745. Similarly Sensex closing for March month was at 71498 whereas 7th Apr’25 closing was at 71425. Indian Market has come a full circle between year 2024 to Apr’26 where in month of sep’24 made life high, then corrected 17% in Apr’25 driven by US Tariff news and again made lifetime high in Jan’26 followed by swift 17% correction in Mar’26 driven by US Israel and Iran war. Investors and Traders have seen huge volatility over last 3 years with broad based corrections and recovery. The stock Market performance with lessons from 2025 and the outlook for 2026 with strategies have been published in earlier articles for detailed reference.
The Indian Market has underperformed major global Markets over last few years now and same continued in Mar and Apr’26 so far. Key drivers for this under performance are war situation impacting Indian macros and economy, high crude oil prices, rupee depreciation to all time low, relentless FII selling. FII sold for Rs 1.22 lakh crores in March’26 alone which is highest monthly outflow in recent times and Rs 56k crores in 3 weeks of April so far. The silver lining in this crisis is DII continuous buying the Market with Rs 1.42 lakh crores in Mar’26 and Rs 39k crores in Apr so far, RBI accommodative policy stance, controlled inflation and positive corporate earnings. Further stock Market recovery and performance will depend on key geo political situations unfolding, energy supply and relevant macro factors. All the economies and capital Markets are increasingly interdependent than as ever in the past, hence to closely track the news and updates.
Key event highlight – US, Israel vs Iran conflict
Background & Escalation
The conflict between the U.S., Israel, and Iran reached a critical flashpoint on February 28, 2026, when joint U.S.-Israeli airstrikes targeted Iranian military and nuclear infrastructure. These “preemptive” strikes aimed to dismantle Tehran’s nuclear program and incite regime change following the breakdown of nuclear negotiations. The operations resulted in the death of Supreme Leader Ayatollah Ali Khamenei, whose son, Mojtaba, has since been appointed his successor. Iran immediately retaliated with drone and missile strikes targeting Israel, U.S. bases in the region, and Gulf state infrastructure, while also mining and blockading the vital Strait of Hormuz, causing a global energy crisis.
Current Situation
Currently, the conflict is in a state of volatile stalemate under a tenuous, Pakistan-mediated ceasefire that has been repeatedly violated. As of late April 2026, direct peace talks in Islamabad have stalled, with President Trump cancelling a high-level diplomatic mission after rejecting recent Iranian proposals as insufficient. While a three-week extension for the Israel-Hezbollah truce was recently announced to prevent a full-scale ground war in Lebanon, localized clashes continue. The U.S. Navy remains engaged in dangerous mine-clearing operations in the Strait of Hormuz to restore oil flow, though insurance premiums for shipping remain at record highs.
Possible outcome
Possibilities for the near future range from a “frozen conflict” marked by periodic flare-ups to a massive regional escalation. Iran demands the lifting of the U.S. naval blockade and war reparations as conditions for a permanent deal, while the U.S. insists on “zero enrichment” and the disarmament of proxies like Hezbollah. If negotiations fail to resume this week, the U.S. has threatened to resume broad aerial assaults. Conversely, a potential diplomatic breakthrough mediated by regional actors remains the only path to preventing a broader war that could permanently destabilize West Asia and the global economy
Sectoral performance recap
The sectors have seen corrections and recovery broadly in line with the Market. The sectors which have underperformed Nifty corrections of -11% in March month are PSU -20%, Nifty bank -17%, realty -17% and auto -16% whereas sectors which outperformed Nifty are Pharma -3%, energy -5%, IT -6%. Similarly in current month of Apr so far sectors which underperformed Nifty recovery of 7% are IT -2% and Pharma 2% whereas outperforming sectors are Realty 20%, Energy 15%, metals 14% and FMCG 12%. Notably, Mid-cap and Small-cap corrected -11% in line with nifty -11% whereas rebounded strongly in current month with 13% return vs 7% return in March. The inference is that mean reversion works in longer term and momentum works in shorter term. Since it is difficult to time it, rebalancing and broader diversification is important for lower volatility and risk management.
Global Market outlook including commodity
US and global Markets saw sharp corrections in month of March’26 due to start of war and strong escalations between US, Israel Vs Iran and equally sharp recovery in current month of Apr’26 due to ceasefire, formal talks and hope of conflict solution. This geo political uncertainness have impacted most countries across the global impacting energy supply, high inflation, increasing fiscal deficit, volatility in currency & commodity prices and mounting of US debt. US blockade and Iran blockade of State of Hormuz and ceasefire uncertainty still poses significant threat to all the global Markets and economy.
Gold & Silver have seen sharp corrections this year after touching life time high and stellar returns over last few years. Silver has seen sharp corrections by 50% nearly from life time high and Gold nearly 28% as comparatively silver shot up faster than gold. This caution has been highlighted in many previous monthly outlook articles emphasizing the asset class nature that period of sharp up move is followed by both price and time corrections. Hence, Investors behaviour based on greed and fear always cost dearly and they need to safeguard it through systematic and disciplined investing. The outlook for precious metals Gold and silver remain muted and may see extended period of consolidation with mild volatility though long term outlook remains positive. Gold is currently trading at Rs 150k/ 10 gm and Silver at Rs 260k/ 1kg.
Outlook for the Indian Market
Indian Market has witnessed high volatility this year primarily driven by geo political events. Investors have seen their portfolio and broad Markets recovery in current month from sharp fall of March month. Investor awareness initiative has helped stabilized Indian Market compensating for FII outflows. Majority Investors have shown maturity by continuing their SIP understanding the volatile nature of market in short run driven by news and events and conviction of the long term growth story, though the stoppage of SIP by section of Investors have also made headlines. Investors should stick to the discipline of regular systematic investing for long term in quality stocks and or mutual funds with periodic rebalancing. The outlook remains positive with high volatility for near term. Global Market, events and policies will further drive the Market. Further, consult your investment advisor for prudent financial practices.
Fundamental outlook: Indian Market is trading at relatively fair value after both time and price corrections and offer good opportunity in different sectors and stocks. Favourable economic policies and past reforms like GST reforms, DII inflows and good corporate earnings are positive drivers. However rupee depreciation, fiscal deficit, FII outflows need to be effectively managed and economic growth need to be accelerated through further reforms. IPO Markets may see more listings once Market stabilizes. We need to further track global Market events and policies announcements.
Technical outlook: Indian Market seems to consolidate and stabilize in last few days after corrections and recovery and VIX has cooled off indicating stability around this level. Nifty is currently trading in neutral zone with monthly RSI of 52 and weekly RSI of 43 and above short term moving average and below long term moving average giving mixed signals. However technicals can completely change based on significant Market events. Nifty immediate support is seen at 23000 and resistance at 25000.
Disclaimer: The information provided above is for educational purposes only and does not constitute financial or investment advice. Market conditions are subject to change. Please consult with a qualified professional financial advisor before making any investment or financial decisions.
