Indian Stock Market Rebounds: Has the Bottom Been Reached?
The Indian stock market staged a strong rebound on Friday, March 20, with across-the-board buying, a day after witnessing a massive selloff that dragged key indices — the Sensex, Nifty 50, and Bank Nifty — over 3% lower.
The Sensex rose 326 points, or over 0.44%. The Nifty 50 ended at 23,114.50, gaining 112 points, or 0.49%. The mid- and small-cap segments jumped up to half a per cent, reflecting that the buying was not just limited to large-cap stocks.
Why Did the Stock Market Rise?
The Indian stock market witnessed a relief rally after Thursday’s massive fall. The main drivers of this relief rally are a slight decline in crude oil prices, hopes that the worst of the US-Iran war may be over, and valuations coming to fair levels, especially in large-cap segments.
Brent crude prices declined more than 3% after the US hinted that sanctions on Iranian oil could be eased. News flows surrounding global powers coming together to secure shipping through the Strait of Hormuz also eased concerns, weighing on oil prices.
Meanwhile, there are indications that the worst of the Middle East war may be over, and an end is near. Israeli Prime Minister Benjamin Netanyahu said the war with Iran might end sooner than expected. Notably, US President Donald Trump has also expressed similar views about the ongoing war.
Has the Indian Stock Market Bottomed Out?
While predicting a bottom of the market is challenging and even futile, experts say the market is discounting an end to the war. G Chokkalingam, founder and head of research at Equinomics Research, explained that unlike prolonged conflicts such as the Ukraine war, this situation is unlikely to drag on for months.
A sustained disruption would severely impact the global economy. Apart from a few exceptions, most countries would suffer through higher oil import bills, weaker trade, and broader economic stress. Given these factors, global pressure to de-escalate is likely to build quickly, said Chokkalingam, adding that the worst may be behind us, and the situation could stabilise within days or weeks.
Several indicators support his view. The market-cap-to-nominal-GDP ratio, which had risen to around 154%, has now corrected to nearly 115%, bringing valuations into a more comfortable zone, said Chokkalingam. The head of research at Equinomics Research pointed out that in absolute terms, total market capitalisation peaked at about ₹485 lakh crore in September 2025.
Since then, there have been multiple corrections and recoveries. Currently, the market is down roughly ₹65 lakh crore from its peak, even after accounting for additional listings through IPOs. Moreover, many small- and mid-cap stocks have corrected sharply—by 20% to 50%—which reflects a significant reset in valuations.
Expert Insights
Rohit Srivastava, the founder and market strategist at Indiacharts.com, also believes the market may be near the bottom, pricing in the worst-case scenario based on current information. Ajit Mishra, SVP of Research at Religare Broking, believes 22,800 is the next support for the Nifty 50, and if it fails to hold this level, 22,500 is on the cards.
On the upside, 23,800 is the resistance. Once we break this, this short-term negativity would be over, he said. But the risks remain… The market is experiencing heightened volatility amid persistent risks. The war continues, crude oil prices remain elevated above $100 per barrel, and the Indian rupee breached the 93 mark for the first time.
According to Bloomberg data, the rupee dropped 64 paise from its previous close of 92.6375 to a fresh low of 93.2813 against the US dollar during the session on March 20. Crude oil prices remain a key risk. It is still at $105-odd levels, which is not a very great picture for India.
Until we see crude slipping below the $100 mark and sustaining at those levels, the negatives are not over, and the market may remain volatile, said Mishra. Mishra noted that global markets, especially the US, have also begun to correct. While the correlation may not be perfect, sustained weakness in US markets is likely to spill over into Indian equities.
Is This the Perfect Time to Buy Stocks for the Long Term?
Despite the persisting risks, experts say this could be the perfect time to buy stocks for the long term. Over the past 18 months, markets have faced multiple headwinds—FII selling, heavy IPO supply, promoter stake sales, concerns around AI disruption, and now geopolitical tensions.
Given the magnitude of these pressures, markets have already absorbed substantial headwinds. As a result, valuations have become attractive, and I have a strong conviction in the long-term opportunity, said Chokkalingam. For more information on stock market news, visit our website.
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