Indian markets started FY27 on a strong note but gave up a portion of gains due to profit booking, highlighting fragile sentiment. | Photo Credit: Orientfootage
Markets kicked off the new financial year with a sharp gap-up, only to surrender a chunk of those gains by the close — a session that laid bare the fragile optimism underpinning the current rally. The Nifty 50 settled at 22,679.40, up 348 points or 1.56 per cent, after touching a day’s high of 22,941.30 in early trade. The BSE Sensex mirrored the pattern, closing at 73,134.32 — a gain of 1,186.77 points or 1.65 per cent — having surged to an intraday peak of 73,964.58 before profit booking pulled it back.
President Donald Trump’s remarks that the United States could withdraw from Iran “whether we have a deal or not” within the next two to three weeks delivered the catalyst that markets had been waiting for.
Global markets rally in tandem
The initial surge was matched globally. Asian markets led the charge, with South Korea’s KOSPI surging over 7 per cent, while Taiwan and Japan’s Nikkei each gained more than 4 per cent. US and European indices followed suit as geopolitical risk premiums unwound across asset classes.
technical indicators signal caution
However, India’s own session told a more cautious story. “Despite the positive close, the formation of a bearish candle on the daily chart signals a strong presence of sellers at higher levels,” said Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities. “…RSI is yet to cross above the 40 mark, while MACD stays well below the zero line, reinforcing the underlying bearish bias.”
Sectoral moves mixed; defense leads
Sectorally, the rally was broad but uneven. Defense emerged as the session’s standout performer, rising close to 5 per cent after Trump openly criticized European allies, reinforcing India’s strategic positioning. Capital markets gained 4.62 per cent, boosted by the Reserve Bank of India’s decision to defer stricter norms on banks’ capital market exposure to July, offering near-term relief to brokers and intermediaries. Media, PSU banks, and chemicals each gained roughly 4 per cent. The lone laggard was pharma, which slipped over 1 per cent, with Dr Reddy’s down 3.8 per cent and HDFC Life off 3.1 per cent. Trent and IndiGo were the top individual gainers, surging 6.9 per cent and 6.1 per cent respectively.
Broader markets outperform benchmarks
Broader markets outperformed the frontline. The Smallcap index climbed 3.4 per cent — its strongest close since May 12, 2025 — while midcaps added 2.2 per cent, though both indices showed similar intraday patterns of gap-up openings followed by profit booking. Market breadth was skewed heavily towards bulls, with 436 of the Nifty 500 constituents closing in the green.
Volatility eases but risks remain
India VIX eased 10.32 per cent to close at 25.01, offering some relief on the volatility front, though analysts cautioned the reading still reflects elevated uncertainty. In the derivatives market, significant call writing was noted at the 22,800 and 22,900 strikes, suggesting the street views this zone as near-term resistance.
Rupee, crude and commodities in focus
On the currency front, the rupee recovered to the 93.3 zone against the US dollar after having touched 95 in the previous session — a development that, if sustained, would ease pressure on India’s import bill. Crude oil prices retreated, with Brent approaching the $100 mark and WTI swinging from $103 to below $97 intraday. Natural gas declined about 0.6 per cent in Indian markets. Gold extended gains to near $4,750 per ounce, a two-week high, with silver edging toward $76. “…prices are likely to remain sensitive to Trump’s address and this week’s US economic releases, including jobs, retail sales, and manufacturing PMI,” said Kaynat Chainwala, AVP-Commodity Research at Kotak Securities.
Bank Nifty mirrors indecision
For Bank Nifty, the session was similarly indecisive. The index opened with a gap of 1,158 points at 51,434, dipped to 51,134 before recovering, and closed at 51,449, up 2.33 per cent.
Key levels to watch ahead
Looking ahead, the trajectory of both indices will hinge on whether geopolitical signals translate into tangible de-escalation — particularly the reopening of the Strait of Hormuz. For Nifty, immediate support is pegged at 22,550–22,500, with a breach risking an extension towards 22,300 and then 22,100. The 22,800–22,850 zone remains stiff resistance. “…a decisive bullish candle, supported by strong follow-through and a break above the prior swing high, would be essential to revive buying interest,” Shah added. Until then, the market’s range-bound, headline-sensitive character is unlikely to change.
Published on April 1, 2026