Nifty 50 set for cautious open as US-Iran tensions weigh on markets

The Indian stock market opened Monday morning under a cloud of geopolitical anxiety, with traders bracing for weakness after a sharp Friday selloff that left the Nifty 50 down 317 points, or 1.25 percent. The index had cracked through a critical support level at 25,350, sweeping through a zone thick with open interest and nearly erasing gains from an earlier rally tied to US-India trade developments. Sentiment had shifted decisively. Gift Nifty futures, the early signal for how Dalal Street would trade, were pointing lower by 0.35 percent as the session began.

The weight pressing down on markets was unmistakable: escalating tensions between the United States and Iran, with ripple effects destabilizing the broader Middle East. That deterioration had triggered a broad flight to safety across global markets. Investors were rotating into gold and silver, driving prices sharply higher. Crude oil had surged nearly 9 percent in early Asian trading on fears of supply disruptions—a direct threat to India, which imports most of its oil and faces immediate macroeconomic pressure from higher energy costs. Aviation stocks were already under strain after flights were suspended across key UAE routes, a tangible operational consequence of the regional instability.

The timing compounded the fragility. Monday brought the weekly Nifty expiry, and the market would close the next day for Holi, a national holiday. That combination of expiry-driven positioning and geopolitical stress was expected to amplify intraday volatility, keeping traders reactive to headlines rather than confident in any directional thesis. Technically, the Nifty 50 remained vulnerable. Analysts saw the 25,000 psychological mark as the next critical test should tensions escalate further, with significant open interest clustered there to provide support.

Precious metals were the clear beneficiary of the risk-off mood. Gold on COMEX had hit $5,400 an ounce, up more than 2.5 percent intraday. Silver had gapped higher and touched $96.93 per ounce, a 2 percent gain in the first minutes of the morning session. One SEBI-registered analyst noted that silver had closed Friday above $93 per ounce and was now testing a hurdle at $95. If it broke and held above that level, spot silver could reclaim the $100 per ounce mark, with Indian silver prices potentially touching 3,00,000 rupees per kilogram. For gold, the resistance sat at $5,400 per ounce. A sustained break above that could push Indian gold prices to 1,68,000 to 1,70,000 rupees per 10 grams. If the US-Iran conflict dragged on like the Russia-Ukraine war, gold could approach its record high of 1,80,000 rupees per 10 grams.

Foreign investors had been a consistent source of selling pressure. On Friday alone, FIIs had offloaded Indian stocks worth 7,536 crore rupees. Domestic institutional investors had stepped in with 12,293 crore rupees of buying, but it was not enough to shift the net flow. February had ended with FIIs as net sellers, having dumped 6,640 crore rupees of shares in the cash segment. This marked the eighth consecutive month of FII selling since July 2025—a sustained exodus that underscored the loss of confidence among global money managers.

The technical picture was deteriorating. The Nifty 50 had formed four consecutive red candles and closed below its 200-day exponential moving average, signaling a shift in the medium-term trend toward bearishness. Immediate resistance was seen at 25,300 to 25,350, with strong support positioned around 25,000 to 25,050. Bank Nifty, by contrast, was holding up slightly better, though it had slipped below its 100-period moving average and would need to sustain its 50-EMA support at 60,000 to maintain its positive bias.

Despite the cautious backdrop, analysts had identified eight stocks they believed offered opportunity for intraday traders: Sai Life Sciences, R R Kabel, BEL, SAIL, HAL, OIL, Kalpataru Projects, and Godrej Agrovet. Each came with specific entry points, profit targets, and stop-loss levels. The recommendations reflected a belief that even in a weak market, individual stocks could find buyers—though the broader environment remained fragile, hostage to developments in the Middle East and the willingness of foreign investors to return.