Mumbai, March 7, 2026, 11:38 IST
- Nifty 50 and Sensex each tumbled roughly 2.9% for the week ending March 6, marking the sharpest weekly slide either index has posted in over a year.
- Financials dropped, with state-run banks under particular pressure, after oil surged and risk appetite faded.
- After the rupee breached the 92-per-dollar mark, hitting a record low, the RBI ramped up its efforts to shore up the currency.
Friday wrapped up a tough stretch for India’s National Stock Exchange, with the Nifty 50 sinking 2.9% for the week to 24,450.45, matching the Sensex, which also fell 2.9% and settled at 78,918.9. With the U.S.-Israeli conflict with Iran driving oil prices up and unsettling investors, the market took a hit. Still, Samrat Dasgupta of Esquire Capital called the selloff “a compelling window” to snap up stocks with “reasonable valuations.” Reuters
Why it’s hitting now: oil’s the lever. Any spike in crude drops right into India’s import costs, stirring up fresh inflation fears well before quarterly results reflect the squeeze—and that’s what traders were reacting to. The mood soured everywhere: U.S. and European equities finished the week in the red as oil charged higher and investors absorbed a surprise miss in U.S. jobs numbers. Reuters
The rupee took a sharp hit this week, briefly slipping below 92 to the dollar before steadying. Bankers estimated the Reserve Bank of India burned through around $12 billion to halt the drop. One banker pointed to RBI action across both spot and derivatives, flagging the NDF—non-deliverable forwards settle in dollars, not rupees—as part of the push. Reuters
The selloff hit almost every corner of the equity tape. Fifteen out of 16 major sectors closed lower for the week. Small-caps slumped 2.5%, with mid-caps off by 2.9%. State-owned banks took a harder hit, tumbling around 6.5%. Banks and financials gave up roughly 4.5%, while oil and gas names declined 3.9%. Larsen & Toubro, pressured by concerns over its Middle East exposure, lost 7.7% for the week. InterGlobe Aviation dropped 8.8% as higher fuel costs crept back into focus. According to ICICI Securities’ Pankaj Pandey, the market is wrestling with near-term oil risks but, so far, “we don’t yet see a macroeconomic impact.” Moneycontrol
Even after the week’s finish, the market’s imprint was unmistakable. According to NSE data, market capitalisation stood at 448.07 lakh crore rupees ($4.89 trillion) as of March 6. GIFT Nifty futures slipped in early Saturday action, a sign that traders are on edge ahead of the next session. NSE India
Financials dragged the market lower—no surprise, given their outsized influence on index movement and domestic risk sentiment. Once they start to slip, other sectors usually get pulled along, oil-linked or not.
Selling had its reasons in spots. Airlines and engineering stocks with international footprints took a beating—cost pressures and execution worries hung over them. Oil marketing firms slid too, investors mulling the fallout from pricier crude.
The road ahead isn’t straightforward. A prolonged conflict with persistently high oil prices could push up volatility, pressure margins for fuel-heavy sectors, and keep the rupee on edge. But if oil prices drop quickly, those trades could unravel just as fast.
The exchange is closed over the weekend, so on Monday, traders’ attention will turn first to crude, then the rupee, and after that, foreign inflows. This week’s signal came through loud and clear: geopolitics has returned to the Indian stock market’s pricing.
