
The stock market has seen a slight recovery amid signs of easing tensions in the Middle East. In the last two trading days, Nifty 50 has crossed almost 23 thousand points, which was going through a lot of ups and downs since the beginning of the war. The market was in turmoil for most of March due to concerns about high crude oil prices and gas shortages. However, the market sentiment has changed after US President Donald Trump's statements indicating a possible end to the war, due to which the demand for risky investments has increased.
Nifty 50 has seen a huge surge in the last two trading sessions and has gained 794 points or 3.52% to 23,306, recovering a major part of the recent losses. Earlier this week, the index had slipped to its lowest level since April 2025.
Although the recovery has been sharp, the index has fallen 7.5% so far in March, its biggest monthly decline since March 2020, when it fell 23.25%. If the index ends the current month with a decline, it will be the fourth consecutive monthly decline. Earlier, four consecutive months of decline was recorded in the index between October 2024 and February 2025.
Nifty's journey in the year 2026
Amid expectations of improvement in earnings, investors were expecting better performance of the Indian stock market in the first quarter of 2026. However, issues arising from Artificial Intelligence (AI), unexpected announcements in the Union Budget 2026 and increasing tensions in the Middle East have negatively impacted the market environment.
Due to war-related concerns, foreign investors made a net sale in the month of March and according to NSDL data, so far they have withdrawn Rs 1.12 lakh crore. This withdrawal has not only affected the stock market, but has also put pressure on the rupee, which has fallen to an all-time low of 94 against the US dollar.
Will Nifty 50 be able to maintain recent gains?
Analysts believe the sustainability of the current economic recovery will depend on which direction the war takes in the coming weeks, especially as both the US and Iran have put forward conditions for ending the conflict. Siddharth Khemka, head of research, wealth management at Motilal Oswal Financial Services, said the current recovery may remain weak and will depend on more clarity about geopolitical events.
He also said that while signs of softening and talks in crude oil prices have provided short-term relief, any change in the market environment could sharply put pressure on the markets, especially with respect to energy infrastructure risks. Bajaj Broking said that volatility is likely to remain high in the near future due to uncertain global cues, stable crude oil prices and ongoing geopolitical tensions. Broking estimates that the index will remain in the range of 22,450 to 23,850 in the coming sessions.
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