The 50-stock Nifty declined 317.90 points, or 1.25%, to settle at 25,178.65.
Rupak De, Senior Technical Analyst at LKP Securities, said the index has fallen steeply after spending three sessions below its key short-term moving average. It has also slipped beneath the 200-day moving average (DMA), signalling continued weakness in the near term.
“The RSI indicator has turned sharply bearish. In the short term, the index may remain under selling pressure, with any rally likely to face resistance. Immediate support is seen at 25,000 and 24,750 levels, while resistance is placed at 25,370,” De said.
1) Iran-Israel war
By the time global markets open on Monday, the Iran-Israel conflict could escalate further, heightening uncertainty across financial markets. Investor sentiment will likely remain fragile as long as hostilities persist, with reports suggesting the conflict may 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 social media video following the strikes, which were reported near the offices of Supreme Leader Ali Khamenei.
Iran retaliated by firing missiles at targets in Israel as well as at US bases located in Saudi Arabia, Bahrain, Qatar and Kuwait.
Also read: Iran-Israel tensions likely to trigger choppy trade on Monday. What should investors do?
2) US markets
Domestic equities are likely to take cues from the action on Wall Street. Major US indices ended lower on Friday amid risk-off sentiment.
The Dow Jones Industrial Average fell 521.28 points, or 1%, to close at 48,977.90. The Nasdaq Composite declined 210 points, or 1%, to settle at 22,668.20, while the S&P 500 also finished in the red, though with a relatively smaller loss of 0.43%.
3) Crude oil
Crude oil prices will remain a key monitorable. Both Brent and US WTI benchmarks surged more than 3% in the previous session and could extend gains when trading resumes on Monday.
US WTI crude futures settled at $67.29 per barrel, up $2.08 or 3.19% in a single session. Brent crude rose 3.4%, or $2.37, to close at $72.87 per barrel. Both benchmarks are currently trading at their highest levels since July and August.
The trajectory of inflation is closely tied to crude oil prices. As India meets nearly 80% of its crude requirement through imports, any sustained spike in oil prices could exert pressure on domestic inflation and weigh on market sentiment.
Also read: Iran-Israel war: Up 20% in 2026, crude oil stares at $80 a barrel
4) FII / DII action
Friday data shows Foreign Institutional Investors (FII) sold Indian equities 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 Iran-Israel conflict escalating over the weekend, risk appetite could take a back seat, prompting foreign investors to adopt a wait-and-watch approach before committing fresh flows to emerging markets.
Also read: FIIs pour Rs 22,615 crore into Indian equities in February. Can Iran-Israel conflict flip 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 sustained pressure on both fundamental and technical fronts. “Momentum indicators reinforce the weakness. The RSI is deeply oversold around 22, ADX is rising—signalling a strengthening downtrend—and MACD remains well below the zero line. Unless the index reclaims 31,000–31,300, the outlook stays negative, with any recovery likely to be slow rather than swift,” Shah said.
6) Sector watch
The Iran-Israel/US war may directly impact many sectors. Oil marketing companies (OMC) are likely to be adversely affected if oil prices rise sharply. Their margins could get hit, hitting their profitability. On the other hand, explorers like ONGC could benefit. Paint and tyre companies which use crude oil as a raw material may also be adversely impacted.
Airline and tourism stocks are also expected to react on Monday.
7) Technical triggers
Nilesh Jain, Vice President- Head of Technical and Derivative research at Centrum Finverse said Nifty has slipped below its crucial 200-DMA placed at 25,350, which is now expected to act as an immediate resistance zone. The index continues to exhibit a lower top and lower bottom formation on the daily chart, reflecting a weakening trend, he said.
“Momentum indicators remain cautious, with the MACD signalling a sell crossover and the RSI gradually drifting lower. Meanwhile, India VIX moved up by 5% to around 13.50, and any further rise in volatility could intensify downside risks. The key psychological support is now seen at the 25,000 mark, and the overall structure points towards continued weakness, with pullbacks likely to face selling pressure,” he added.
8) Rupee Vs dollar
Rupee movement against the US dollar will be closely tracked. The rupee declined 17 paise to settle at 91.08 against the US dollar on Friday, weighed down by a massive outflow of foreign funds and a sharp rise in global crude oil prices amid geopolitical uncertainties.
At the interbank foreign exchange, the rupee opened at 90.91 and moved in a narrow range of 90.91-91.08 before settling at 91.08, down 17 paise from its previous close.
The rupee settled on a flat note at 90.91 against the US dollar on Thursday.
“We expect the rupee to trade with a negative bias on the weak tone in the domestic equities and geopolitical risks between the US and Iran. $INR spot price is expected to trade in a range of Rs 90.70 to Rs 91.20,” Anuj Choudhary, Research Analyst, Mirae Asset ShareKhan, said.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.05 per cent lower at 97.74.
9) IPO watch
The primary market will see limited action this week with just one company launching its public offer for subscription. The only new issue opening next week is the Rs 1,087 crore IPO of Sedemac Mechatronics. The offer, which is entirely an offer for sale, will open on March 4 and close on March 6. The price band is set at Rs 1,287-1,352 per share.
Meanwhile, nine companies are scheduled to list across the mainboard and SME platforms. Clean Max Enviro Energy Solutions, Shree Ram Twistex and PNGS Reva Diamond Jewellery will be among the mainboard listings. On the SME side, Yaap Digital, Accord Transformer, Mobilise App, Kaisa Retail and Striders Impex will make their debuts.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)