Mumbai: The three-day rebound in markets after the sell-off since early March has been marked by scepticism and unease, making it an unloved rally. As equities trudge higher, partly driven by short covering and domestic institutional buying, a decisive shift will hinge on some respite on the war front and the market finding its footing, something which experts say has not yet happened.

Both indices had dropped roughly 8.3% from the start of March till Friday, spooked by the spike in oil prices sparked by the conflict in West Asia. The pace of the fall had resulted in markets turning oversold, typically followed by a rebound – a phenomenon that analysts describe as ‘dead cat bounce’.

The Sensex and Nifty have recovered up to 2.9% in the past three trading sessions till Wednesday, bouncing off their lowest levels since April 2025, but the tentative bounce in this period underscores doubts about the durability of the rally.

The main stock indices gave up a portion of their early gains on these trading sessions. For instance, on Wednesday, Nifty closed 0.8% higher after gaining as much as 1.2% earlier in the day. Similarly, the index rose 1.1% and 1.5% on Tuesday and Monday but ended the day 0.7% and 1.1% higher, respectively.

“The word on the Street is caution given the significant drawdowns recently, and while they are hoping for a resolution soon, investors are wary and lack optimism due to uncertain outcomes,” said Lakshmi Iyer, Group president and CEO, Bajaj Alternates. “The durability of gains can be assessed only when there is clarity on the endgame on the war front,” she said.

One reason for this is the unrelenting foreign institutional selling amid the rebound. Overseas fund managers pulled out ₹16,400 crore in the previous three trading sessions, taking their sales tally for March so far to nearly ₹75,000 crore – the highest selling in a month since January 2025.
In index futures, the cuts in foreigners’ bearish bets, as reflected in their long-short ratio, have also been moderate, analysts said. “The FII long short ratio rose from 10% on Friday to 14% on Wednesday, which indicates only a marginal reduction in short positions by global investors,” said Nilesh Jain, VP and head of Technical and Derivative Research, Centrum Finverse.

Dwindling trader confidence also stems from uncertainty over whether the Nifty has formed a bottom, fuelling confusion. “Until it crosses 24,300 levels, this indecision could persist.”

While many investors are of the view that the conflict may not stretch on for long, they appear unwilling to deploy cash aggressively into equities now.

“The rebound does not enthuse foreign investors while domestic investors are stuck after buying at higher levels,” said Siddarth Bhamre, head of Research, Asit C Mehta Intermediates. “Retail investors, however, are not participating much in the buying and are waiting to see how the war shapes up.”

“The geopolitical risk from a closure of the Strait of Hormuz remains a sword hanging over us,” he said. “There are no reasons to be bullish currently and unless there is a resolution of the conflict, further declines are likely.”

PPI) The Producer Price Index is a price index calculated to measure the average change in prices received by producers over a period of time.” data-id=”2208911029″ data-type=”getty-image” width=”1536″ height=”1024″ srcset=”https://static.seekingalpha.com/cdn/s3/uploads/getty_images/2208911029/image_2208911029.jpg?io=getty-c-w1536 1536w, https://static.seekingalpha.com/cdn/s3/uploads/getty_images/2208911029/image_2208911029.jpg?io=getty-c-w1280 1280w, https://static.seekingalpha.com/cdn/s3/uploads/getty_images/2208911029/image_2208911029.jpg?io=getty-c-w1080 1080w, https://static.seekingalpha.com/cdn/s3/uploads/getty_images/2208911029/image_2208911029.jpg?io=getty-c-w750 750w, https://static.seekingalpha.com/cdn/s3/uploads/getty_images/2208911029/image_2208911029.jpg?io=getty-c-w640 640w, https://static.seekingalpha.com/cdn/s3/uploads/getty_images/2208911029/image_2208911029.jpg?io=getty-c-w480 480w, https://static.seekingalpha.com/cdn/s3/uploads/getty_images/2208911029/image_2208911029.jpg?io=getty-c-w320 320w, https://static.seekingalpha.com/cdn/s3/uploads/getty_images/2208911029/image_2208911029.jpg?io=getty-c-w240 240w” sizes=”(max-width: 767px) calc(100vw – 36px), (max-width: 1023px) calc(100vw – 132px), (max-width: 1199px) calc(100vw – 666px), (max-width: 1307px) calc(100vw – 708px), 600px” fetchpriority=”high”>

By Jennifer Nash

The latest report on the Producer Price Index (PPI) shows that wholesale inflation for final demand increased by 0.7% in February. This uptick was higher than the expected 0.3% growth and follows a 0.5% increase in January. On

The Federal Reserve on Wednesday left interest rates unchanged amid mounting uncertainty over how the Iran war will impact the economy and in turn the central bank’s approach to monetary policy, raising questions over whether any rate cuts will occur this year.

The Fed’s monetary policy panel, known as the Federal Open Market Committee (FOMC), voted 11-1 to leave the benchmark federal funds rate unchanged at a range of 3.5% to 3.75%. It marked the second straight meeting with rates being held steady after three successive 25-basis-point cuts in September, October and December to end last year.

Policymakers released a summary of economic projections (SEP), which showed that the median projection for interest rates sees just one 25 basis point cut the rest of this year followed by a single cut of that size in 2027.  

“In our SEP, FOMC participants wrote down their individual assessments of an appropriate path for the federal funds rate under what each participant judges to be the most likely scenario for the economy,” Federal Reserve Chair Jerome Powell said. “The median participant projects that the appropriate level of the federal funds rate will be 3.4% at the end of this year and 3.1% at the end of next year, unchanged from December.”

FEDERAL RESERVE HOLDS INTEREST RATES STEADY

“As is always the case, these individual forecasts are subject to uncertainty and they are not a committee plan or decision,” Powell added.

During the post-announcement press conference, Powell was asked what officials are seeing that led them to project a cut despite higher forecasts for both inflation and unchanged projections for the unemployment rate and economic growth. 

The SEP showed policymakers projected that the personal consumption expenditures (PCE) index – the Fed’s preferred inflation gauge – will be 2.7% at the end of this year, well above the central bank’s 2% target. That’s up from 2.4% in the Fed’s prior projection in December.

Core PCE, which excludes volatile measurements of food and energy, was also revised up to 2.7% at the end of this year. The previous projection had it at 2.5%.

FED’S FAVORED INFLATION GAUGE REMAINED STUBBORNLY HIGH IN JANUARY AS CONSUMER PRICE PRESSURES PERSIST

“There are 19 people, and so 19 reasons, 19 individual submissions,” Powell said. “If you notice, the median didn’t change, but there was actually a meaningful amount of movement toward fewer cuts by people, so four or five people went from two cuts to one cut.”

“Essentially, the forecast is that we will be making some progress on inflation, not as much as we had hoped, but some progress on inflation,” Powell said. “It should come as we start to see in the middle of the year progress on tariffs going through once and then tariff inflation coming down. We should be seeing that.”

“And you know, the rate forecast is conditional on the performance of the economy, so if we don’t see that progress, then you won’t see the rate cut,” he explained.

FED OFFICIALS CLOSELY MONITOR IRAN CONFLICT FOR POTENTIAL INFLATION IMPACT

The market responded to the Fed’s projection by pulling back expectations surrounding interest rate cuts this year, which were previously expected to begin as early as June.

The CME FedWatch tool showed an 89.2% probability that rates will remain at their current level following the Fed’s June meeting in the wake of today’s announcement. That’s up from 79.5% yesterday, 62.8% a week ago and 37.8% last month – while the tool also now shows a 3.8% chance of a 25 basis point hike in June, up from zero a month ago.

The market now sees it being more likely than not that the Fed will leave rates unchanged through the end of this year. 

GET FOX BUSINESS ON THE GO BY CLICKING HERE

The CME FedWatch tool shows a 51.3% chance of rates being at their current range after the Fed’s December meeting – up from 23.5% a week ago and 4.9% last month. 

Probabilities for December show a 35.7% chance of one 25 basis point reduction by then, while the odds of a second cut between now and then have fallen to 9.5% from 32.5% a month ago.

Europe’s largest airlines extended their suspensions of flights to Dubai and other major Middle Eastern travel hubs amid the conflict in the region.

On-and-off airspace and airport restrictions are forcing carriers worldwide to reroute planes, on sometimes lengthy detours at a time when energy prices are rising due to oil supply constraints.

Copyright ©2026 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Cryptocurrency exchange Kraken has put its multibillion-dollar initial public offering plan on hold, CoinDesk reported on ‌Wednesday, ⁠citing ⁠two people with knowledge of the matter

The company is still weighing an IPO, but is unlikely to move ⁠ahead until ‌market conditions improve, according to ⁠the report.

The company confidentially filed for ​a U.S. IPO ​in November 2025. Kraken was set to go public in the first ‌quarter of 2026.

Initially focused on ​crypto, the ​company ⁠has expanded across asset classes in recent months, including ​equities with the rollout of commission-free trading.