New Delhi: Market experts say that investors should be prepared for significant volatility during the week commencing March 23, as the rising tensions in the Middle East, fluctuating crude oil prices, foreign investor activity, and global market trends will be the primary factors determining the market’s direction. During the previous trading session on Friday, March 20, the stock market witnessed gains. The Sensex closed with a surge of 300 points, while the Nifty also closed above the 23,100 mark. Following Friday’s rally, will the market be able to sustain this upward momentum? Let’s find out…
These factors could determine the market’s direction
- The ongoing military conflict in the Middle East could easily shake the investor’s confidence. Moreover, US President Donald Trump has issued a stern warning to Iran as he stated that if the Strait of Hormuz is not fully reopened within 48 hours, the United States will launch an attack on Iran’s power plants. Meanwhile, Iran has warned that if its power plants are targeted, it will strike energy infrastructure linked to the US and Israel across the Middle East. If this conflict drags on, investor confidence could be shaken, potentially leading to a market downturn.
- The prices of crude oil have increased and have touched $110 amidst the ongoing conflict in the Middle East. On Friday, March 20, Brent crude surged 3.26% to reach $112.19 per barrel, its highest level since July 2022. There are fears that if oil prices remain above the $100 mark, it will fuel inflation in India, which will affect the entire economy.
- The Foreign Institutional Investors (FIIs) recorded net selling of Rs 5,518 crore on March 20. During the same period, Domestic Institutional Investors (DIIs) engaged in buying worth Rs 5,706 crore. So far in March, FIIs have withdrawn a total of Rs 86,780 crore, while DIIs have made purchases amounting to Rs 101,168 crore.
- 1 USD, as of Sunday, 22 March 2026, is equal to 94.01 Indian Rupee. This is Indian Rupee’s all time low record. The Indian rupee depreciated by 110 paise on Friday, March 20. Since the outbreak of the Iran war, the rupee has weakened by over 2.5%. A weaker rupee makes imports more expensive, which has a direct bearing on the broader economy and corporate earnings.
- The Nifty is attempting to find its footing around the 23,000 mark. If the Nifty slips below this level, it could potentially drop to 22,500 or even 22,000. On the upside, it is essential to breach the 23,400 mark. Based on technical indicators, the scope for a major recovery in the market appears limited.
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