Market Wrap

Indian equities witnessed a sharp and broad-based correction last week, reflecting a clear shift to risk-off sentiment. The Nifty50 slipped below the crucial 25,200 mark, ending the week down 1.54%, as escalating geopolitical tensions triggered panic across global markets.

The sharp sell-off followed reports of a direct U.S.–Iran military confrontation and the killing of Iran’s Supreme Leader, Ayatollah Khamenei, significantly raising global uncertainty. Iran’s retaliation threats, including drone attacks on key Middle Eastern infrastructure such as Saudi Aramco facilities, fueled fears of supply disruptions at the Strait of Hormuz a critical route that accounts for nearly 20% of global oil consumption.

As a result, crude oil prices spiked nearly 8–9%, adding inflationary pressure concerns for oil-importing nations like India.

Domestically, the damage was severe:

• Nearly ₹6.6 lakh crore was wiped off BSE market capitalization

• India VIX surged 25% to 17.13, signaling a sharp jump in volatility

• Nifty closed near its Budget-day lows after a gap-down start

Sectoral Performance

• Nifty Oil & Gas emerged as a relative outperformer, supported by the rally in crude prices. The index witnessed a fresh bullish RSI crossover on the weekly chart, suggesting technical resilience.

• Broader markets bore the brunt of the sell-off, with midcaps and smallcaps seeing heavy unwinding as leveraged positions were trimmed aggressively.

• Defensive buying helped U.S. indices attempt stabilization, but global markets largely traded cautiously amid energy price volatility.

Overall, sentiment remains fragile, with geopolitical risk dictating flows and positioning.

What's Ahead

With markets closed on 3 March for Holi, attention now turns to global developments during the holiday period. The next trading session could see sharp moves depending on :

• Crude oil trajectory

• Escalation (or de-escalation) in Middle East tensions

• Global risk appetite and U.S. market cues

Elevated volatility is likely to persist until there is greater clarity on geopolitical stability.

Strategy for Investors

• Avoid over-leveraged positions

• Expect sharp intraday swings

• Stay patient for confirmation of support levels

For long-term investors, such sharp corrections may offer staggered accumulation opportunities in fundamentally strong names. However, near-term direction will remain heavily influenced by geopolitical headlines and global energy markets.

For now, caution remains the dominant strategy.

Market Snapshots

Institutional Activity

Sectoral Performance

Technical Outlook

Nifty 50

The NIFTY 50 closed at 24,865.70, down 312.95 points (-1.24%), forming a weak structure amid broad-based selling in financials, auto, and infra stocks. The index opened lower and remained volatile within a 385-point range before settling near the day’s mid-range, indicating sustained selling pressure despite intraday recovery attempts. With RSI slipping sharply below the 40 mark, bearish momentum has strengthened, suggesting downside risk may persist unless strong buying emerges near key supports. Immediate support is placed at 24,564 followed by 24,358; a decisive break below these levels could trigger further unwinding. On the upside, resistance stands at 25,227 and 25,433, where any pullback may face supply. The overall setup remains cautious with volatility likely to stay elevated amid global risk-off cues and FII selling.

Bank Nifty

The NIFTY BANK ended at 59,839.65, down 689.35 points (-1.14%), reflecting uniform weakness across PSU and private lenders, with all 14 constituents closing in the red. The index opened weak, attempted an intraday recovery toward 60,177, but failed to sustain higher levels, signaling continued distribution at higher zones. RSI has slipped toward the 40 mark, indicating weakening momentum and sustained selling pressure in the financial space. Immediate support is seen at 59,242 followed by 58,873; a breach below these levels could accelerate downside momentum. On the upside, resistance is placed at 60,437 and 60,806, where selling pressure may re-emerge. The bias remains negative in the near term unless the index decisively reclaims the 60,400 zone.

Nifty Financial Services

The NIFTY FINANCIAL SERVICES index closed at 27,564.10, down 305.65 points (-1.10%), with market breadth heavily skewed toward declines (1 advance vs 19 declines), highlighting broad-based weakness across NBFCs and banking stocks. The index continues to trade under pressure, reflecting sustained distribution in high-beta financial counters. Immediate support is placed at 27,293 followed by 27,109; a breakdown below these levels may intensify selling. Resistance levels are seen at 27,890 and 28,075, which are likely to act as supply zones on any technical bounce. Momentum indicators suggest a cautious stance, and recovery attempts may remain limited unless broader sentiment stabilizes.

Sensex

The BSE SENSEX settled at 81,287.19, down 961.42 points (-1.17%), witnessing sharp selling across heavyweight constituents. The index failed to sustain above key psychological levels and closed near the lower band of its recent consolidation range, reflecting persistent bearish undertones. Market breadth remained negative (4 advances vs 25 declines), reinforcing weak internal structure. Immediate support is seen at 80,513 followed by 80,027; a break below 80,000 could trigger further downside acceleration. On the upside, resistance is placed at 82,084 and 82,570, where supply pressure is likely to cap rebounds. The short-term trend remains weak, with traders advised to watch support zones closely amid heightened volatility.