Equity market forecast for March 2026

Industry experts suggest that the Indian equity markets are currently in a phase of consolidation, even as the structural growth story of India remains strong. However, the near-term upside is expected to be limited due to factors such as tariff-related volatility, geopolitical risks, and concerns about the impact of advancements in artificial intelligence.

To gain more insight into the current market trends, we reached out to George Thomas, Fund Manager- Equity at Quantum AMC, Meeta Shetty, Fund Manager at Tata Mutual Fund, and Utsav Verma, Head of Research at Choice Institutional Equities.

In February, Indian equities were influenced by a combination of factors including clarity on domestic policies and global trade developments. The Union Budget presented on February 1 was well-received for its balanced and pragmatic approach, outlining a growth trajectory for the next decade, instilling confidence in India’s future growth potential.

On the global front, market reactions were swift to developments in the US-India interim trade framework, with the rolling back of punitive tariffs leading to uncertainty in global trade flows. This uncertainty caused intermittent risk-off sentiment across emerging markets. Additionally, the rapid evolution in artificial intelligence technology created concerns about disruption to business models and potential margin compression, particularly affecting technology stocks.

Looking ahead to March, market movements are anticipated to be influenced by various domestic and global factors. Investors will closely monitor GDP data based on the new series, along with indicators like auto sales, PMI, and inflation prints to gauge the sustainability of festive demand upticks seen in the third quarter of FY26.

Internationally, the evolving US tariff structure will be a key area of focus, as it impacts global trade and export-oriented sectors. The upcoming policy meeting of the US Federal Reserve will also be closely watched for insights into global interest rate trends, which in turn could influence capital flows into emerging markets like India.

In the medium term, Indian equities are anticipated to benefit from expectations of around 10% nominal GDP growth, boosted by improving domestic demand and gradual growth in exports facilitated by trade agreements. Encouraging signs from high-frequency indicators hint at a stabilizing growth environment, while macroeconomic stability is supported by controlled fiscal deficits, robust foreign exchange reserves exceeding USD 700 billion, and prudent central government spending.

Despite these positive factors, external risks remain a concern. Commodity price fluctuations may impact corporate margins, geopolitical tensions could elevate crude oil prices, and the rapid integration of AI-driven automation raises fears of job losses and structural disruptions in certain sectors.

Considering these factors, the industry forecasts that markets will likely remain range-bound in the short term, with limited potential for both upsides and downsides.