Indian stock markets closed with gains on Friday. Sensex rose more than 300 points, while Nifty closed above 23,100. The reason for this was that oil prices softened a bit. After the heavy selling on Thursday, the ‘bears’ (those who bring the market down) got a lot of relief. Due to this selling, there was a loss of more than Rs 11.5 lakh crore from the market capitalization of BSE listed companies. Looking ahead, the market is likely to remain volatile and affected by events. The near-term direction of the market will largely depend on the developments taking place in the Middle East.
Especially the situation around the ‘Strait of Hormuz’ will also influence the stock market. If this disruption continues for a long time, crude oil prices may remain above the $100 mark. This will increase the pressure of inflation and current account deficit, and will also create a risk averse environment in the market. FII inflows, rupee movement, and global cues—including US dollar strength and general market sentiment—will be key factors to keep an eye on.
If there are any signs of easing of tensions or softening of crude oil prices, this could lead to ‘short-covering’ or a relief rally. At the same time, if tensions increase again, there may be further downward pressure on the market. Let us discuss in detail the factors that can affect the stock markets next week.
US, Israel and Iran War
The conflict between Iran and the US-Israel alliance continues to escalate, and leaders on all sides have warned that the situation could get worse. On Saturday, Israeli forces launched strikes on Iran and Beirut, while the US began preparing to deploy thousands of additional Marines to the Middle East.
Last week, Iran accused Israel of attacking facilities in its South Pars gas field and threatened to attack oil and gas assets in the Gulf region in response. It fired missiles towards Qatar and Saudi Arabia, and targeted energy in Saudi Arabia, UAE and Qatar. Iran also claimed to attack an LNG plant in Qatar.
Crude oil around $110
Oil prices rose on Friday, closing at their highest level in almost four years. This came as Iraq declared ‘force majeure’ on all oil fields operated by foreign companies and the Iran War escalated, leading to the US preparing to deploy thousands of additional Marines and sailors to the Middle East. Brent crude futures for May rose $3.54, or 3.26 percent, to settle at $112.19 a barrel, the highest level since July 2022. US West Texas Intermediate crude futures for April, which expire Friday, closed up $2.18, or 2.27 percent, at $98.32.
Due to the closure of the Strait of Hormuz, all the major markets of the world have been shaken. The narrow waterway between Iran and Oman typically carries about a fifth of the world’s supply of crude oil and LNG. In practice, oil equivalent to about 20 percent of global demand passes through this waterway every day. With the waterway effectively closed for the past seven days, approximately 140 million barrels of oil—equivalent to about 1.4 days of global demand—has been blocked from reaching international markets.
FII exodus continues
According to preliminary NSE data, foreign institutional investors (FIIs/FPIs) remained net sellers; They bought shares worth Rs 28,496.17 crore, while sold shares worth Rs 34,014.56 crore, leading to a net outflow of Rs 5,518.39 crore. In contrast, domestic institutional investors (DIIs) remained net buyers on March 20, 2026; They bought shares worth Rs 22,938.31 crore and sold shares worth Rs 17,232.08 crore, resulting in a net inflow of Rs 5,706.23 crore.
Foreign portfolio investors (FPIs) continued their selling in the Indian equity market. In the fortnight ending March 15, they withdrew Rs 52,703 crore. This reflects heightened risk aversion amid global uncertainties and growing macroeconomic challenges. The special thing is that till now in March, foreign investors have withdrawn more than Rs 88 thousand crores. Whereas in the current year it has sold more than Rs 1 lakh crore.
Dr. VK, Chief Investment Strategist, Geojit Investments. Vijayakumar said weakness in global equity markets following the war in West Asia, continuous depreciation of the rupee, and concerns over the impact of high crude oil prices on India’s economic growth and corporate earnings – all these factors have increased the concerns of FPIs.
Rupee at record low
The Indian rupee fell by 110 paise on Friday, the biggest single-day fall since the end of 2022. The decline came as oil prices rose sharply amid continued attacks by both sides on each other’s energy facilities in West Asia. According to a report, New Delhi had paid a very high price for oil supplies on Thursday; Amidst this report, the rupee fell to a historic low of 93.73, after which it remained at 93.71 per dollar at market closing.
The pace of decline was quite rapid, which was probably compensating for the market holiday in Mumbai on Thursday. Traders said market speculation about the central bank’s ‘short dollar’ positions (dollar shortage) and continued selling of Indian equity assets by foreign investors put further pressure on the rupee. The rupee has fallen by more than 2.5 percent since the start of the Iran war.
week technical setup
From a technical perspective, Nifty 50 is trying to stabilize near the support zone of 23,00023,200 after the recent sharp fall. However, the index is still trading below the key resistance levels, which shows that its overall structure is still weak. If the level of 23,000 is broken decisively, then selling pressure may increase, due to which the index may slide towards 22,70022,500, with a risk of further fall to 22,00021,800.
On the upside, the zone of 23,300–23,400 is still acting as immediate resistance, while 24,000 is a strong resistance. Only a sustained rise above this level will indicate a meaningful recovery. Momentum indicators still remain weak. The RSI is close to the oversold zone and the MACD is in the negative zone, suggesting that any upside is likely to be limited.