Sensex, Nifty outlook for Monday, March 9: What to expect from stock market amid rising crude prices, Iran war – Levels, trading strategy & more

Domestic equity markets are staring down at another volatile start as escalating West Asia tensions and a surge in global crude oil prices continue to dampen investor sentiment

On Friday, the Sensex plunged 1,097 points, or 1.37 per cent, to settle at 78,918.90. The Nifty declined 315.45 points, or 1.27 per cent, to close at 24,450.45. Both benchmark indices slipped nearly 3 per cent each for the week, marking their second straight session of settling lower. 

Hinting at a negative opening on Monday, Nifty futures on the NSE International Exchange declined 274 points, or 1.11 per cent, to trade at 24,300. 

“The global markets reacted strongly to the geopolitical tensions in the Middle East, where the domestic market witnessed a nosedive correction. The oil prices skyrocketed to above USD 85 while the Indian rupee has weakened, reflecting concerns over prolonged disruptions to crude supply — a critical input for India’s economy,” said Vinod Nair, Head of Research at Geojit Investments Limited.

Nair added that a sustained rise in crude prices could pressure India’s fiscal metrics and inflation outlook. “A sustained rise in oil prices could weigh on investor sentiment and adversely affect India’s twin deficits, inflation trajectory and the RBI’s monetary stance. An uptick in the US 10-year bond yield and a stronger dollar have prompted FIIs to adopt a risk-off approach toward domestic equities,” he said

Analysts say the sell-off in the past week was broad-based, with rate-sensitive sectors bearing the brunt of the correction. Realty, banking and auto stocks remained among the biggest laggards, reflecting concerns over higher energy costs and weakening risk appetite..

“Markets ended the holiday-shortened week with steep losses as escalating geopolitical tensions in West Asia and a sharp spike in crude oil prices weighed heavily on investor sentiment,” said Ajit Mishra, SVP – Research at Religare Broking.

Mishra said that concerns about supply disruptions around the Strait of Hormuz have pushed Brent crude close to the $95 per barrel mark, raising inflation worries for India.

“Persistent foreign institutional investor (FII) outflows further pressured the market. FIIs remained net sellers in the equity segment, with net outflows of nearly ₹21,831 crore during the week,” Mishra said.

Key levels to watch

“The current trend in GIFT Nifty around the 24,300 level indicates a bearish undertone compared with the previous Nifty close near 24,450,” said Hariprasad K, SEBI-registered research analyst and founder of Livelong Wealth. He added that the spike in volatility reflects growing uncertainty among investors.

Nifty: Mishra said the 24,050 level will act as the next crucial support, which coincides with the 100-week exponential moving average. “A breakdown below this zone could extend the decline toward 23,800,” he said. On the upside, the 24,800–25,200 range is expected to act as a strong resistance band for the index.

Sensex: For the 30-pack index, the 78,500–78,800 zone remains an important support area, while 79,800 could act as immediate resistance in the near term, said Ponmudi R, CEO – Enrich Money.

“A sustained break below this region could lead to further downside toward 77,200–77,000. On the upside, immediate resistance is placed near 79,800, where selling pressure has recently emerged,” Ponmudi added.

Trading strategy

“Given the heightened geopolitical risks and continued FII outflows, investors should adopt a cautious and disciplined approach in the near term,” said Mishra.

He added that selective opportunities may still emerge in sectors such as pharma, defence, public sector enterprises and energy, while rate-sensitive sectors could remain under pressure if crude prices stay elevated.

“Investors are moving towards traditional safe-haven assets and adopting a cautious stance while awaiting greater clarity. We advise avoiding a panic sell-off and maintaining a disciplined long-term perspective,” Nair said.