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Market Commentary 

Nifty has seen a sharp decline of more than 14% from the all-time high tracking weak global market cues amid escalating geopolitical tensions surrounding the US–Israel conflict with Iran. The fall got accelerated in today’s session with Nifty declining almost 600 points as the standoff over the Strait of Hormuz has sharply escalated, with US President Donald Trump issuing a 48-hour deadline to Iran over the weekend and warning of direct strikes on its power infrastructure if the key shipping route is not reopened.

Geo-political tension has pushed Brent crude oil prices sharply higher, with prices currently hovering around $112 per barrel, raising concerns for oil-importing economies like India. Adding to the negative sentiment, the Indian rupee slipped to a fresh low against the US dollar, further weighing on investor confidence due to fears of higher import costs and rising inflationary pressures. Elevated crude oil prices pose a major macroeconomic challenge for India due to its strong reliance on energy imports. A prolonged rise in oil prices can increase inflationary pressures, expand the current account deficit, and put further pressure on the domestic currency.

Nifty has retraced more than 78.6% of the previous major rally of April 2025 and January 2026 (21744-26373) and has slipped to a 11-month low forming lower high and lower low in the short- and medium-term time frame indicating continuation of the ongoing corrective phase. Market volatility is expected to remain elevated in the near term amid uncertain global cues, rising crude oil prices, and escalating geopolitical tensions.

The recent sharp decline has driven daily oscillators into oversold territory, with the 14-period RSI dropping below 30. However, there is still no price confirmation indicating a pause in the ongoing correction. For signs of stabilization, the index must begin forming a consistent pattern of higher highs and higher lows on the daily chart and secure a close above the immediate resistance level of 23,862, which aligns with the previous week’s high.

On the downside, the key support zone lies in the 22,000–21,700 range, which marks the lows of last year. Since the COVID-led decline in CY20, Nifty has consistently held above its previous yearly lows, making this a critical area to monitor in the near term. Going forward, geopolitical developments and movements in Brent crude prices are likely to play a decisive role in shaping the direction of the equity markets

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