Stock Market Outlook, March 5: Sensex, Nifty May Stay Under Pressure Amid West Asia Tension, Rising Oil Prices

Indian equity markets are expected to remain under pressure on Thursday, March 5, 2026, as investors brace for continued volatility amid escalating geopolitical tensions in West Asia and surging crude oil prices. After witnessing three consecutive sessions of decline, benchmark indices are likely to open cautiously, tracking weak global cues and fragile investor sentiment.

Stock Market Outlook Today, 5 March 2026; Sensex, Nifty Prediction Today

On Wednesday, the Nifty closed at 24,480, down 385 points or 1.5%, although it recovered partially from intraday lows on value buying at lower levels. Broader markets also mirrored the weakness, with the Midcap 100 and Smallcap 100 indices declining 2.1% each.

India Vix Surges; Indian Rupee at Record Low

Volatility spiked sharply, with India VIX surging 23.4%, signaling heightened nervousness among traders. Meanwhile, the Indian rupee breached the Rs 92 per US dollar mark to hit a record low, adding to concerns over capital flows and imported inflation.

Sensex, Nifty Today: Key Triggers To Watch on March 5, 2026

According to Siddhartha Khemka, Head of Research, Wealth Management at Motilal Oswal Financial Services Ltd, sentiment is likely to stay fragile in the near term. He noted, "Markets are likely to remain cautious in the near term as evolving war developments and shifting geopolitical dynamics continue to create uncertainty and keep investor sentiments fragile." He further added, "With sentiment turning cautious, participants may prefer a selective approach while monitoring incoming global cues."

Khemka also highlighted sectoral preferences amid the uncertainty. "Amid prevailing uncertainties, we suggest investors to shift focus towards domestic themes, upstream Oil&Gas companies which is expected to benefit from elevated energy prices, and defence may remain in focus on the back expectations of increased defence spending."

He cautioned that given India's heavy reliance on oil imports, sustained strength in crude prices could pressure inflation and the current account, potentially keeping markets in negative territory.

From the fixed-income perspective, Amit Modani, Senior Fund Manager and Lead - Fixed Income at Shriram AMC, warned of deeper risks if geopolitical tensions escalate further. He stated, "While short-term volatility may present tactical trading opportunities, a prolonged and structural disruption to the Strait of Hormuz would represent a fundamental external shock to India's growth trajectory."

"In such a scenario, the risk-reward balance shifts away from aggressive duration positioning toward high-quality accrual strategies focused on delivering more stable, risk-adjusted returns amid elevated external uncertainty," Amit Modani added.

For Thursday's session, market participants will closely track developments in the US-Israel-Iran conflict, global crude oil price movements, and currency trends. Analysts expect Sensex and Nifty to trade with a negative bias, though intermittent pullbacks cannot be ruled out due to bargain hunting at lower levels.

Overall, volatility is likely to remain elevated, with defensive positioning and sector rotation dominating trading strategies.

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