The Dow Jones fell nearly 1%, posting its steepest weekly decline since April 2025. The S&P 500 dropped 1.3%, while the Nasdaq Composite slid 1.6%. US markets were unsettled by a disappointing US payrolls report that raised fresh concerns about a cooling labour market at a time when rising energy prices threaten to revive inflation pressures.The bigger shock, however, came from oil markets.
Crude prices jumped sharply after the United States and Israel carried out military strikes on Iran, escalating the conflict in the region and raising fears of prolonged disruptions to global energy supplies. Shipping through the Strait of Hormuz, a key route for global oil trade, was halted amid the tensions.
US crude futures surged more than 12% to above $90 per barrel on Friday, while Brent crude climbed about 8.5% to around $92. Analysts warn that prices could climb further if the conflict intensifies, with some forecasts pointing to oil potentially moving toward the $100 per barrel mark or higher.
Higher oil prices pose a direct risk to India’s markets and economy, given the country’s heavy dependence on imported crude. Rising energy costs tend to push up inflation, widen the current account deficit and pressure corporate margins across several sectors.The global risk-off mood had already weighed heavily on Indian equities last week.
Benchmark indices, Sensex and Nifty, fell nearly 3% each during the week, marking their biggest weekly drop in more than a year. The selling was widespread, with 41 of the 50 Nifty stocks ending the week in the red, highlighting the broad-based pressure across sectors.
Financial stocks were among the biggest losers as investors reduced exposure to risk assets amid rising geopolitical uncertainty.
The market’s weakness was also reflected in trading patterns through the week. Out of four sessions, the market declined on three sessions and managed to close higher only once, underscoring the cautious sentiment among investors.
Foreign institutional investors selling and a weakening rupee added to the pressure.
Although the market attempted a brief recovery on Thursday, supported by bargain hunting and slightly improved global cues, the rebound was short-lived. Selling resumed in the final trading session as crude prices surged further and global uncertainty intensified.
Technical indicators now suggest that the market is entering a period of heightened volatility.
Pravesh Gour, senior technical analyst at Swastika Investmart, said the Nifty is currently holding an important support level but remains vulnerable to further declines. “Nifty is taking support near 24,300 but remains highly volatile. On the upside, the 24,900-25,000 range is likely to act as an immediate supply zone where selling pressure could emerge if the index attempts a recovery,” Gour said.
He added that a decisive break below the 24,300 level could trigger further downside. “If the index slips below 24,300, the next important support comes near 23,800, which traders will closely monitor,” he said.
Banking stocks may also remain under pressure. According to Gour, the Bank Nifty is currently trading below its 100-day moving average but finding support near the 200-day average. The index faces immediate resistance near the 59,000-59,500 zone, while a break below 57,500 could extend the decline toward 56,700.
Looking ahead, analysts say the direction of equities will largely depend on three key factors: developments in the Middle East conflict, movements in crude oil prices, and foreign investor flows.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times.)