Indian stock market: Both benchmark indices – Sensex and Nifty – closed at nearly 1% down on Friday, February 27, driven by persistent geopolitical tensions and a sharp spike in crude oil prices.
The Sensex tumbled 961 points, or 1.17%, to settle at 81,287.19, while the Nifty 50 slumped 318 points, or 1.25%, to close at 25,178.65. Broader markets also faced pressure, with the BSE 150 MidCap Index dropping 1.09% and the BSE 250 SmallCap Index falling 0.86%.
“Equity markets ended the week under notable pressure as persistent geopolitical tensions and weakness in technology stocks weighed on sentiment. After an initially positive start, benchmark indices traded lacklustre through the middle of the week. However, a sharp decline in the final session pushed bulls onto the back foot,” said Ajit Mishra, SVP, Research, Religare Broking Ltd.
Stock Market Outlook next week
According to Manoranjan Sharma, Chief Economist at Infomerics Ratings, the simmering tensions between the United States, Israel, and Iran escalated sharply on February 28, 2026, significantly affecting global energy security and economic stability.
“Indian equity markets have already responded with risk-off sentiment. Benchmark indices are expected to open lower, accompanied by heightened volatility as investors reassess geopolitical and commodity-related risks. A short-term correction of approximately 1–1.5% is possible, with sectors such as automobiles, financials, and FMCG facing downward pressure. In contrast, IT companies and select export-oriented businesses may find relative support amid global risk aversion and a strengthening US dollar,” Sharma said.
Top 5 triggers for the Indian stock market
1] Israel-Iran War
Following a claim by US President Donald Trump, Iran’s state-run Islamic Republic News Agency reported that joint US-Israel strikes had killed Supreme Leader Ayatollah Ali Khamenei. However, Iranian authorities have not officially confirmed the report.
The United States and Israel launched a large-scale military operation against Iran on Saturday.
Two Israeli officials told The Associated Press that Khamenei’s death had been confirmed, though Tehran has yet to respond. Earlier, Iranian Foreign Minister Abbas Araghchi told NBC News that Khamenei and President Masoud Pezeshkian were alive “as far as I know.”
Trump described the operation as “already a success,” saying, “We’ve inflicted tremendous damage. It would take them years to rebuild.”
In retaliation, Iran launched missiles and drones toward Israel and targeted US military bases in Bahrain, Kuwait and Qatar. The US military said there were no American casualties, while Israel stated that many of the incoming missiles were intercepted.
2] Crude Oil Prices
Market experts believe that the US-Israeli strikes against Iran and reprisals by Tehran could severely disrupt the global supply of crude oil and send prices soaring to new levels.
AFP report revealed that Iran maintains its position as one of the world’s top ten oil nations. Currently, the country pumps approximately 3.1 million barrels per day, which is roughly half of its peak output from five decades ago.
According to Kunal Sodhani, Head of Treasury, Shinhan Bank India, around 50% of India’s total crude oil imports (2.6 million barrels per day) transit through the Strait of Hormuz — a major chokepoint between the Persian Gulf and open seas. If disrupted, this directly threatens half of India’s oil supply and elevates risk premiums in global oil prices.
3] Gold and silver rates
The latest developments in the Middle East are likely to heighten geopolitical tensions and increase investor uncertainty, with key asset classes — particularly equities, gold and silver — expected to respond when markets reopen on Monday.
Commenting on the potential opening trend for precious metals amid escalating US-Iran tensions, Anuj Gupta, a SEBI-registered market expert, said the rising war-related concerns are expected to drive uncertainty, prompting investors to turn to gold and silver as safe-haven assets. He anticipates a gap-up opening for precious metals.
4] Global markets
According to Mishra of Religare Broking, the performance of global markets, particularly the US, amid lingering tensions between the US and Iran and trade-related developments, will be closely monitored.
On Friday, U.S. stock index futures declined on Friday as escalating concerns around artificial intelligence weighed heavily on technology shares, putting the Nasdaq on course for its sharpest monthly decline since March 2025. Investors also remained cautious ahead of crucial inflation data due later in the day.
The S&P 500 slipped 0.4%, marking only its second monthly loss in the past 10 months. The Dow Jones Industrial Average fell 1.1%, while the Nasdaq Composite dropped 0.9%.
5] FII and DII Activity
After several months of persistent selling, foreign institutional investors (FIIs) reversed course and became net buyers in Indian equities in February, recording their strongest monthly inflows in 17 months despite ongoing volatility in domestic markets.
So far, FIIs have invested nearly $2.14 billion in the secondary market and about $299 million in the primary market, pushing total net inflows to approximately $2.44 billion. This marks the highest monthly inflow since September 2024, when investments had touched around $5.95 billion.
The renewed buying interest comes even though FIIs offloaded more than $1.21 billion worth of IT stocks during the first half of February amid concerns surrounding artificial intelligence, according to data from National Securities Depository Limited.
“The conflict in the Middle East has triggered a risk on situation in financial markets. It remains to be seen how the conflict will evolve and impact crude and currency markets.
FIIs are likely to wait and watch how things evolve before making further commitments in emerging markets,” said VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited.
Technical Outlook
Nifty 50
According to Ponmudi R, CEO of Enrich Money, the Nifty 50 has slipped below its key short-term moving averages (20, 50, 100, and 200-day EMAs), confirming emerging weakness after a failed rebound.
“A bearish formation on the weekly chart signals distribution at higher levels. Immediate support lies at 25,100–25,000; a break below this zone could expose 24,900–24,700 near the long-term trendline. On the upside, 25,350–25,500 now acts as immediate resistance, and a sustained move above this band is needed for stabilisation. An RSI around 46 and a negative MACD indicate mild bearish momentum. Overall bias remains negative to range-bound, with consolidation possible near support,” Ponmudi said.
Bank Nifty
On the Bank Nifty outlook, Ponmudi further said that it closed at 60,529, retreating from recent highs and forming a short-term double-top pattern, suggesting profit booking.
“Immediate support is placed at 60,300–59,900; a breakdown could extend losses toward 59,700–59,500. Resistance is seen at 60,800–61,000, with a sustained reclaim required to revive upward momentum toward 61,400–61,500. RSI near 52 reflects neutral but weakening momentum. The bias remains mildly negative unless support levels hold firmly,” he said.
Sensex
He further noted that the index has tested the 81,200–81,000 zone, with further downside risk if volatility persists.
“Immediate resistance is positioned at 82,000–82,500. While heavyweight participation offers some structural support, near-term caution prevails amid global uncertainties. The broader structure appears mildly negative with an indecisive undertone, favouring accumulation on weakness rather than aggressive positioning,” Ponmudi added.
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
