Indian benchmark indices Sensex and Nifty are likely to open on a cautious note on Monday, with GIFT Nifty indicating a weak start as renewed fighting between the United States and Iran pushed crude oil prices higher and weighed on global risk sentiment.

GIFT Nifty was trading at 24,225 around 8 am, down 87 points or 0.36 percent. Indian equities had ended higher on Friday, snapping a two session losing streak, with the Sensex gaining 330.92 points or 0.43 percent to close at 77,264.51 and the Nifty rising 84.80 points or 0.35 percent to 24,175.65. Gains in information technology stocks supported the domestic benchmarks during the previous session.

The market enters the new week against a weaker global backdrop as renewed escalation in the Middle East brings crude oil prices and geopolitical risks back into focus. Asian equities declined sharply on Monday after fresh fighting between the United States and Iran revived concerns over the conflict and the security of global energy supplies.

Japan's Nikkei declined 2.1 percent, while South Korean equities fell 2.4 percent. MSCI's broadest index of Asia Pacific shares outside Japan declined 0.7 percent. US equity futures also pointed to a weaker opening, with S&P 500 futures down 0.3 percent and Nasdaq futures lower by 0.5 percent.

Crude oil prices rose more than $1 a barrel as the latest US Iran exchange heightened concerns over energy supplies through the Strait of Hormuz. Brent crude futures climbed 1.23 percent to $89.18 a barrel, while US West Texas Intermediate crude advanced 1.10 percent to $84.32 a barrel. Higher crude prices could remain a concern for oil importing economies such as India by increasing pressure on inflation and the external balance.

Global markets are also responding to a more hawkish interest rate outlook after Federal Reserve Chair Kevin Warsh reiterated the central bank's focus on bringing inflation under control. Markets subsequently raised the probability of a September rate increase to 57 percent, pushing short term US Treasury yields sharply higher.

Wall Street had already ended lower on Friday, with the S&P 500 declining 0.25 percent to 7,711.76 and the Nasdaq Composite falling 0.52 percent to 26,402.42. Higher bond yields and increased expectations of tighter monetary policy could continue to weigh on global equity valuations, particularly in interest rate sensitive segments.

Investors will also track key macroeconomic indicators during the week. India's Q1 FY27 GDP data and the US non farm payrolls report are expected to provide fresh signals on the strength of domestic economic growth and the outlook for global monetary policy.

On the technical front, Nifty is expected to retain a cautious bias. The 24,300 to 24,400 zone is likely to act as the key resistance area, while 24,100 to 24,000 remains the immediate support zone. A sustained break below 24,000 could open the way towards the 23,800 level.

Institutional flows could provide some cushion to the domestic market. Foreign institutional investors sold Indian equities worth more than Rs 5,000 crore on Friday, adding to the pressure from weak global risk sentiment. Domestic institutional investors, however, purchased equities worth Rs 5,183 crore, extending their buying streak to a 14th consecutive session and largely offsetting the foreign outflows.

With geopolitical tensions, crude oil prices, US bond yields and domestic macroeconomic data all in focus, market direction is likely to remain volatile as investors assess the balance between strong domestic institutional support and rising external risks.