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Market Snapshot

The Indian stock market observed a trading holiday on March 3, 2026, in celebration of Holi. This pause comes at a critical juncture as the Nifty 50 and Sensex both hit multi-month lows in the preceding session on March 2. The Sensex had tumbled 1,048 points to close at 80,238.85, while the Nifty 50 shed 312 points to settle at 24,865.70. The India VIX, a key indicator of market volatility, skyrocketed by 25% to 17.13, reflecting heightened anxiety among participants due to deteriorating global cues.

Institutional Flows: Cash Market

As the exchanges were closed today, the latest provisional figures from the session ending March 2 highlight a stark divergence between foreign and domestic sentiment. The domestic liquidity continues to act as a formidable wall against global volatility:

• FIIs were net sellers in the cash market, offloading equities worth ₹3,295.64 crore.
• DIIs emerged as the primary market support, recording a massive net purchase of ₹8,593.87 crore.
• This trend underscores a structural shift in the Indian market, where domestic institutional strength is increasingly absorbing the pressure from foreign capital outflows.

Derivatives Market Activity

The derivatives segment witnessed heavy repositioning prior to the holiday, with FIIs maintaining a clear bearish bias in their hedging strategies:

• FIIs were net sellers in Index Futures to the tune of ₹3,314.53 crore, reflecting cautious positioning for the upcoming sessions.
• In the Index Options segment, FIIs recorded a substantial net sell of ₹23,522.72 crore, primarily driven by heavy put-buying in Nifty contracts.
• Interestingly, Stock Futures saw a minor net purchase of ₹521.25 crore by FIIs, suggesting selective bottom-fishing in specific large-cap names despite the broader sell-off.

Key Drivers and Outlook

The primary catalyst for the recent market turbulence remains the escalating geopolitical conflict in the Middle East. Reports of renewed strikes between the U.S., Israel, and Iran have sent crude oil prices surging, directly impacting India's fiscal outlook.

• Geopolitics: The threat of supply disruptions in the Strait of Hormuz remains the biggest "black swan" risk for global energy markets, keeping investors on edge.
• Oil Prices: With crude hovering at multi-month highs, sectors like Aviation, Paints, and OMCs (Oil Marketing Companies) are expected to face margin pressure when trading resumes.
• Technical Outlook: Analysts suggest that Nifty has immediate support at the 24,600 level. A decisive break below this could trigger further downside toward 24,400, while 25,000–25,250 acts as a stiff resistance zone on any recovery attempt.

Investors will be closely monitoring global market movements and crude oil trajectories before the Indian markets reopen for regular trading on Wednesday, March 4.

TAGS: FII, DII, Stock Market, Institutional Investors, Nifty, Sensex

Tags: ** FII DII Stock Market Institutional Investors Nifty Sensex