Indian benchmark indices are heading into the new trading week under heavy geopolitical clouds. The flare up in the Middle East, following the killing of Iran’s Supreme Leader Ayatollah Ali Khamenei, has added a fresh layer of uncertainty to global markets amid the US, Israel-Iran conflict.
The big question now is can the Nifty hold on to previous support levels or will it fall further. This is particularly in focus as the markets have fallen for the third consecutive mark and the Nifty has been unable to break key resistance levels.
Key Nifty levels to watch
Technical factors are a key to watch. Sudeep Shah, Head of Technical & Derivatives Research at SBI Securities said, “On the index front, Nifty’s immediate support lies around the 24,900 psychological mark, followed by the 24,650–24,500 zone; a breach could accelerate downside momentum. On the upside, 25,350–25,500 will act as a key resistance band. For Bank Nifty, 60,000 remains an important support level, while 61,000–61,200 is immediate resistance.”
“If crude sustains above the psychological $80-85 mark and global markets remain weak, Indian equities could open with a gap-down bias, potentially in the range of 1-2%. Banking, oil marketing companies, aviation and auto stocks may see early selling pressure, while IT and pharma could relatively outperform,” he added.
Nifty: Technical outlook
“From a technical perspective, Nifty 50 has slipped below the 25,400 support zone and is now approaching the gap area near 25,100. If weakness persists, the index could drift toward the 24,800 zone and major support at 24,400 level. On the upside, 25,600 remains a strong hurdle; a decisive move above this level could negate the current pessimism and open the door for a recovery toward 25,900.,” said Ajit Mishra – SVP, Research, Religare Broking.
Energy prices key catalyst for markets
With energy prices rising and global risk sentiment turning cautious, Dalal Street is expected to react sharply when trading resumes.
The immediate concern for investors is not just the geopolitical development itself, but its ripple effects. This will especially affect crude oil prices, inflation and foreign investor flows.
Oil shock and India’s vulnerability
The escalation involving the United States and Israel has increased fears of supply disruption in the Strait of Hormuz, a crucial route for global crude movement.
Now, for India, which imports roughly 85% of its oil needs, any sustained spike in crude prices poses economic challenges.
Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Investments said, “Medium-term impact on the market will depend on how long the conflict will last. We don’t know the answer to this question. After crippling Iran, US and Israel may make a strategic withdrawal. The market will react very negatively. In a weak market, upstream oil companies and defence stocks will do well,” he added.
Oil becomes the market’s compass
The brokerage house JM Financial said the situation has now moved beyond limited hostilities to an active military exchange. The brokerage noted, “For India, the impact is direct: every USD 1 rise in crude increases the annual import bill by ~USD 2bn, putting pressure on the trade balance. Markets are likely to move from earnings-driven to oil-driven trading in the near term. Upstream energy and defence may see relative support, while oil-sensitive sectors such as OMCs, paints, tyres, aviation and chemicals face margin pressure. Crude remains the key macro variable for Indian equities under the current escalation scenario.”
Market recap
On Friday, the Sensex fell sharply by 961.42 points to close at 81,287.19, while the Nifty declined 317.90 points to end at 25,178.65.