Rupak De, Senior Technical Analyst at LKP Securities, said the index has fallen sharply after spending three sessions below the key short-term moving average. It has also fallen below the 200-day moving average (DMA), indicating continued short-term weakness.”The RSI indicator has turned strongly bearish. In the short term, the index may remain under selling pressure with any rally likely to encounter resistance. Immediate support is seen at the 25,000 and 24,750 levels, while resistance is placed at 25,370,” De said.
1) War between Iran and Israel
By the time global markets open on Monday, the conflict between Iran and Israel could escalate further, increasing uncertainty in financial markets. Investor sentiment is likely to remain fragile as long as hostilities continue, with reports suggesting the conflict could last for weeks.
On Saturday, Israel launched pre-emptive strikes on Iran after the United States and Iran failed to reach an agreement on a nuclear deal.
US President Donald Trump described the development as “major combat operations in Iran” in a video on social media following the attacks, which were reported near the offices of Supreme Leader Ali Khamenei.
Iran retaliated by firing missiles at targets in Israel and at US bases in Saudi Arabia, Bahrain, Qatar and Kuwait.
Also read: Tensions between Iran and Israel are likely to lead to choppy trading on Monday. What should investors do?
2) US markets
Domestic stocks will likely take cues from the action on Wall Street. The major US indices closed lower on Friday due to the risky sentiment.
The Dow Jones Industrial Average fell 521.28 points, or 1%, to close at 48,977.90. The Nasdaq Composite fell 210 points, or 1%, to 22,668.20, while the S&P 500 also finished in the red, albeit with a relatively smaller loss of 0.43%.
3) Crude oil
The price of crude oil will remain an important factor to monitor. Both Brent and US WTI benchmarks rose more than 3% last session and could extend gains when trading resumes on Monday.
U.S. WTI crude futures settled at $67.29 per barrel, up $2.08 or 3.19% in one session. Brent crude rose 3.4%, or $2.37, to close at $72.87 a barrel. Both benchmarks are currently trading at their highest levels since July and August.
Inflation trends are closely linked to crude oil prices. Since India meets almost 80% of its crude oil needs through imports, any sustained rise in oil prices could put pressure on domestic inflation and weigh on market sentiment.
Also read: War between Iran and Israel: 20% increase in 2026, crude oil costs $80 per barrel
4) BE/DO action
Data on Friday shows that foreign institutional investors (FII) sold Indian shares worth Rs 7,536.36 crore. The domestic institutional investors (DIIs) were net buyers at Rs 2,292.81 crore.
FIIs turned net buyers in February, picking up Indian equities worth Rs 22,615 crore during the month, but Friday’s sharp sell-off has cast doubt on the sustainability of that trend reversal. With the conflict between Iran and Israel escalating this weekend, risk appetite may take a back seat, prompting foreign investors to take a wait-and-see approach before sending new flows of money into emerging markets.
Also read: FIIs pour Rs 22,615 crore into Indian equities in February. Can the conflict between Iran and Israel reverse the trend?
5) AI threat
Analyst Sudeep Shah, Vice President and Head of Technical & Derivatives Research at SBI Securities, said the IT sector remains under continued pressure on both fundamental and technical fronts. “Momentum indicators are amplifying the weakness. The RSI is heavily oversold around 22, the ADX is rising – indicating a strengthening downtrend – and the MACD remains well below the zero line. Unless the index regains 31,000-31,300, the outlook remains negative with any recovery likely to be slow rather than fast,” Shah said.
6) Sector surveillance
The war between Iran, Israel and the US could have a direct impact on many sectors. Oil marketing companies (OMC) are likely to be negatively impacted if oil prices rise sharply. Their margins may come under pressure, putting pressure on their profitability. On the other hand, explorers like ONGC could benefit from this. Paint and tire companies that use crude oil as a raw material may also suffer adverse consequences.
Aviation and tourism stocks are also expected to respond on Monday.
7) Technical triggers
Nilesh Jain, vice-president and head of technical and derivative research at Centrum Finverse, said Nifty has fallen below the crucial 200-DMA of 25,350, which is now expected to act as an immediate resistance zone. The index continues to show a lower top and lower bottom formation on the daily chart, reflecting a weakening trend, he said.
“Momentum indicators remain cautious, with the MACD signaling a selling crossover and the RSI gradually drifting lower. Meanwhile, the India VIX rose 5% to around 13.50, and any further rise in volatility could increase downside risks. Key psychological support is now seen at the 25,000 mark, and the overall structure points to continued weakness, with pullback likely to face selling pressure,” he added.
8) Rupee vs Dollar
The movement of the rupee against the US dollar will be closely monitored. The rupee fell 17 paise to settle at 91.08 against the US dollar on Friday, pressured by massive foreign fund outflows and a sharp rise in global crude oil prices amid geopolitical uncertainties.
At the interbank forex market, the rupee opened at 90.91 and moved within a narrow range of 90.91-91.08 before settling at 91.08, down 17 paise from the previous close.
The rupee traded flat at 90.91 against the US dollar on Thursday.
“We expect the rupee to trade with a negative impact on weak domestic equities tone and geopolitical risks between the US and Iran. The spot price of $INR is expected to trade within a range of Rs 90.70 to Rs 91.20,” said Anuj Choudhary, research analyst at Mirae Asset ShareKhan.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.05 percent lower at 97.74.
9) IPO watch
The primary market will see limited action this week, with only one company launching its public subscription offering. The only new issue opening next week is the Rs 1,087 crore Sedemac Mechatronics IPO. The offer, which is entirely an offer to sell, opens on March 4 and closes on March 6. The price range has been fixed at Rs 1,287-1,352 per share.
Meanwhile, nine companies are scheduled to appear on the Motherboard and SMB platforms. Clean Max Enviro Energy Solutions, Shree Ram Twistex and PNGS Reva Diamond Jewelery will be among the mainboard entries. On the SME side, Yaap Digital, Accord Transformer, Mobilize App, Kaisa Retail and Striders Impex will make their debut.
(Disclaimer: Recommendations, suggestions, views and opinions expressed by the experts are their own. These do not represent the views of Economic Times)
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