Indian equity markets witnessed a volatile session on March 9, with benchmark indices attempting a partial recovery after a steep early decline triggered by escalating geopolitical tensions and a surge in global crude oil prices. However, a sudden drop in oil prices later in the morning helped stabilize sentiment and limit further downside in the market.

By 11:25 am, the Sensex was trading at 77,018.63, down 1,900.27 points or 2.41 percent, while the Nifty stood at 23,847.15, lower by 603.30 points or 2.47 percent. Despite remaining sharply in the red, both indices managed to rebound meaningfully from their intraday lows. The Sensex recovered more than 700 points from the day’s bottom, while the Nifty managed to reclaim the psychologically important 23,850 level.

Market breadth remained weak, reflecting continued selling pressure across sectors. Around 636 stocks were advancing on the NSE, while 3,179 declined and 136 remained unchanged, indicating a broad-based risk-off environment among investors.

The initial selloff was largely driven by concerns surrounding global energy markets following the escalation of the Iran conflict. The intensifying geopolitical tensions pushed Brent crude prices sharply higher, deepening fears of supply disruptions and rising inflation pressures worldwide. Brent crude had surged more than 26 percent to around $119 per barrel earlier in the session, accelerating the rally seen in recent days.

However, sentiment improved after reports emerged that G7 nations were considering a coordinated release of crude oil from strategic reserves to stabilize global supply. According to reports cited by the Financial Times, energy ministers from G7 countries were scheduled to hold emergency discussions alongside Fatih Birol, the executive director of the International Energy Agency (IEA), to assess the impact of the Iran conflict on global energy markets.

The discussions reportedly included a proposal to release between 300 million and 400 million barrels of crude oil from strategic reserves. This would represent roughly 25 to 30 percent of the approximately 1.2 billion barrels currently held by IEA member countries. Three G7 nations, including the United States, have already expressed support for such a coordinated intervention.

Following these reports, US crude prices dropped sharply by nearly $15 per barrel in under two hours, falling below the $104 per barrel mark. The sudden decline in oil prices helped ease some of the inflationary and macroeconomic concerns weighing on global markets, including India.

The link between crude oil and Indian equities remains particularly strong given the country’s heavy dependence on imported energy. India imports more than 80 percent of its crude oil requirements, meaning sustained spikes in oil prices can significantly widen the current account deficit, pressure the rupee, and complicate monetary policy decisions. As a result, even modest declines in crude prices tend to trigger relief rallies in domestic equities.

Sectorally, information technology stocks showed relative resilience during the session. The Nifty IT index was trading only about 0.4 percent lower, significantly outperforming the broader market. The limited downside in IT stocks reflects their lower sensitivity to crude oil price movements compared with sectors such as aviation, paints, chemicals, and logistics, where energy costs directly impact margins.

IT companies also derive a large portion of their revenues from overseas markets, which often provides a hedge during periods of domestic macroeconomic uncertainty. This partly explains why the sector remained comparatively stable despite the broader market weakness.

From a technical standpoint, market participants are closely watching key support levels on the Nifty. According to market analysts, the index could see further downside only if it breaks decisively below the 23,535 level. As long as the index holds above this threshold, intermittent rebounds driven by global cues and short-covering activity remain possible.

However, the broader outlook remains fragile due to continuing geopolitical risks. The sharp rise in oil prices since the outbreak of the US-Israeli war on Iran has already triggered a global shift toward safer assets such as the US dollar. Oil prices have risen more than 50 percent since the conflict began, intensifying concerns around inflation, supply chains, and global growth.

For Indian markets, the trajectory of crude oil will likely remain the dominant macro driver in the near term. Sustained prices above $100 per barrel could create pressure on inflation expectations and potentially delay monetary easing globally, which in turn could weigh on equity valuations.