SBI Securities Expert Warns of Market Pressure Amid Middle East Conflict
Sudeep Shah, Head of Technical Research and Derivatives at SBI Securities, has shared his critical analysis on the Indian stock market for the week starting March 16, 2026. His insights focus on the Nifty and Bank Nifty indices, as well as key sectors, against the backdrop of escalating geopolitical tensions in the Middle East, including conflicts involving the US, Israel, and Iran. The ongoing war has triggered significant market volatility, with recent events such as drone strikes at Dubai International Airport and threats in the Strait of Hormuz adding to investor anxiety.
Nifty View: Sharp Decline Amid Geopolitical Turmoil
The sell-off on Dalal Street extended into a third consecutive week, driven by escalating tensions between the US and Iran, which have severely eroded investor confidence. During the last three trading sessions, pressure intensified sharply, with the benchmark Nifty index declining over 5% for the week. This marks the steepest weekly fall since June 2022, highlighting the severity of the current market correction. Automobile and banking stocks emerged as the primary laggards, exerting significant downward pressure on the index. However, the magnitude of this correction suggests that geopolitical concerns alone may not fully account for the sharp sell-off witnessed in the market.
A major factor weighing on sentiment has been heightened volatility in crude oil prices. Early last week, Brent crude briefly cooled off, slipping to a low near $80.29, which provided temporary relief to equity markets. This respite proved short-lived as prices quickly reversed course, climbing back close to the $100 mark, once again unsettling investors. Adding to the uncertainty are concerns around gas shortages and potential supply disruptions following tensions in the Strait of Hormuz. These issues have raised cost pressures and margin-related worries across several sectors, amplifying the broader market impact.
From a technical perspective, the Nifty remains firmly entrenched in a downtrend, with the pace of decline accelerating in recent sessions. Over the last 27 trading sessions, the index has corrected more than 12%, making it one of the sharpest drawdowns in recent history. The formation of weekly candles with long upper shadows over the past two weeks indicates persistent selling pressure at higher levels, suggesting that every pullback is being used as an opportunity to exit positions. Additionally, the index has closed below the crucial 61.8% Fibonacci retracement of the prior rally from 21743 to the all-time high of 26373. This signals a weakening technical setup and implies that the market may require more time before forming a meaningful bottom.
Momentum indicators further reinforce this bearish view, with the weekly RSI slipping to 30.43, its lowest level since the COVID-induced market crash. Looking ahead, the 22850–22800 zone is expected to act as immediate support for the index. A sustained break below 22800 could extend the correction towards 22500. On the upside, the 23450–23500 zone is likely to act as immediate resistance, with any recovery attempt facing selling pressure at higher levels.
Bank Nifty View: Underperformance and Sharp Correction
The banking benchmark index, Bank Nifty, has also witnessed a sharp correction in recent sessions, notably underperforming frontline indices due to sustained selling pressure in banking heavyweights. Over the last week alone, the index declined by nearly 7%, and more importantly, it has broken down from its rising channel on the weekly chart. This breakdown signals a clear shift in the medium-term trend, indicating a transition from consolidation to a phase of pronounced weakness.
From its recent peak of 61678, Bank Nifty has corrected by nearly 13% within just 15 trading sessions, underscoring the intensity and speed of the ongoing decline. Such a sharp fall over a short period typically points to aggressive unwinding of positions and heightened risk aversion within the banking space. This suggests that investors are increasingly cautious about the near-term outlook for the sector, reflecting broader market anxieties.
Technically, the setup remains decisively bearish. All key moving averages along with momentum-based indicators are aligned on the downside, confirming the prevailing negative trend. The weekly RSI is currently placed around 34.56, marking its lowest level in recent years. This reflects persistent weakness and indicates a lack of meaningful buying interest, despite the magnitude of the correction already witnessed.
Looking ahead, the 53400–53200 zone is expected to act as an important support area, as a horizontal trendline support is positioned in this region. However, any sustained breakdown below the 53200 level could further intensify selling pressure and open up additional downside towards 52500, followed by 51800 in the short term. On the upside, any pullback or relief rally is likely to face strong resistance in the 54500–54600 zone, which is expected to act as an immediate hurdle and may attract fresh selling interest.
Overall, until Bank Nifty shows clear signs of stabilization and manages to reclaim key resistance levels, the trend is likely to remain under pressure. In such an environment, market participants may continue to adopt a cautious, level-based approach while closely monitoring price action around critical support zones.
Sectors in Focus: Underperformers and Outperformers
From a technical standpoint, several sectors are expected to remain under pressure and underperform in the short term. These include:
- Nifty Auto
- Private Banks
- PSU Banks
- Oil & Gas
- FMCG
- IT
- India Tourism
- Media
In contrast, the CPSE (Central Public Sector Enterprises) space stands out as the only segment likely to deliver relative outperformance over the near term. This suggests that investors may find some refuge in public sector entities amid the broader market turmoil.
Disclaimer: Recommendations and views on the stock market, other asset classes, or personal finance management tips given by experts are their own. These opinions do not represent the views of The Times of India or Bharat Horizon.
