Indian Equities Expected to Bounce Back on Wednesday Amid Favorable Market Indicators

Indian Equities Poised to Bounce Back as Global Cues Turn Positive

The equity benchmark indices Sensex and Nifty are likely to open higher on Wednesday, snapping a two-day decline, thanks to positive global cues and a marginal decline in crude prices.

The Sensex and Nifty had ended the last trading session of the 2025-26 fiscal year sharply lower on Monday due to weak investor sentiment caused by the ongoing conflict in West Asia and rising crude oil prices. Additionally, weak Asian markets and continued foreign fund outflows had weighed on domestic equities.

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The Reserve Bank of India has deferred the implementation of norms related to banks' exposure to capital markets to July 1. The RBI has also eased certain conditions for brokers, allowing them to continue using bank guarantees backed by 50 percent margin until then. Furthermore, capital adequacy requirements for banks issuing payment commitments to clearing corporations have been relaxed by limiting the exposure on which capital must be maintained.

A Wall Street Journal report indicated that US President Donald Trump is willing to end the ongoing conflict with Iran, even if the Strait of Hormuz remains largely closed for now. As a result, Brent crude futures for May declined $1.22, or 1.08 percent, to $111.56 per barrel after earlier gains. The more active June contract stood at $105.76. Analysts said the decline reflects near-term optimism, though sustained movement would depend on restoration of flows through the Strait of Hormuz.

Global markets showed firmness, with Nasdaq-100 futures rising 0.55 percent, S&P 500 futures up 0.7 percent, and Dow Jones futures gaining 0.8 percent. Gift Nifty was also trading higher by about 0.5 percent at around 11:30 am.

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Ajit Mishra, SVP, Research at Religare Broking, stated that the Nifty has declined over 11 percent during March and it will be essential to track whether it holds the 200-week exponential moving average placed around the 21,900 level. He noted that weakness in key sectors, especially banking and financials, along with elevated volatility indicated by India VIX near 28, suggests continued downside risk. Mishra added that any pullback may face resistance in the 22,600–23,000 range and advised caution.

For the last two sessions, the Sensex has fallen 3,325.9 points or 4.41 percent, while the Nifty has dropped 975.05 points or 4.18 percent. For the full 2025-26 financial year, the BSE benchmark declined 5,467.37 points or 7 percent, and the Nifty fell 1,187.95 points or 5 percent.

Broader markets also remained under pressure, with the BSE MidCap Select index falling 3.13 percent and the SmallCap Select index declining 2.14 percent.

Foreign institutional investors withdrew Rs 1.14 lakh crore from domestic equities in March, marking the highest monthly outflow, amid concerns over West Asia tensions, a weakening rupee, and the impact of elevated crude oil prices on growth.