Pre-Market Update: Nifty, Sensex Likely to Open Gap-Down on Monday as U.S.-Iran Tensions Escalate

Pre-Market Update at 7:42 AM: India’s benchmark indices, the Sensex and Nifty 50, are likely to open lower on Monday, weighed down by global market weakness amid rising inflation concerns linked to the escalating U.S.-Iran conflict. As of 7:17 am, GIFT Nifty was trading around the 22,820 level, down by nearly 313 points from the Nifty futures’ previous close, indicating a gap-down start for the Indian stock market indices.

Global cues remain weak, with Asian markets trading sharply in the red and U.S. equities declining last week. The S&P 500 ended at a six-month low as the conflict entered its fourth week, denting investor sentiment. Market participants will closely monitor key triggers this week, including developments in the U.S.-Iran war, crude oil price trends, FII activity, rupee movement, and major domestic and global economic data.

Asian markets slumped on Monday as escalating geopolitical tensions weighed on sentiment. MSCI’s broadest index of Asia-Pacific shares outside Japan fell 1.2 per cent. Japan’s Nikkei 225 plunged 3.70 per cent, while the Topix declined 3.38 per cent. South Korea’s Kospi dropped 4.73 per cent and the Kosdaq slipped nearly 3.5 per cent. Hong Kong’s Hang Seng index was down 2.5 per cent after opening.

The U.S.-Iran conflict has entered its fourth week, with both nations threatening to target critical infrastructure. Iran stated that the Strait of Hormuz would be “completely closed” if the U.S. follows through on President Donald Trump’s threat to attack its power plants. Trump has issued a 48-hour deadline for reopening the strait, raising fears of further escalation.

Crude oil prices remained volatile after a sharp rally. Brent crude futures were down 0.27 per cent at USD 107.32 per barrel but still up 55 per cent for the month. U.S. crude traded at USD 97.55 per barrel, reflecting continued uncertainty in energy markets.

On the domestic front, India’s eight core infrastructure sectors recorded a slower growth of 2.3 per cent in February, compared to 3.4 per cent a year ago. For the April–February period, cumulative growth stood at 2.9 per cent, lower than 4.4 per cent in the same period last year, indicating moderation in economic momentum.

Bond yields have surged globally amid inflation concerns. The 10-year U.S. Treasury yield climbed to an eight-month high of 4.41 per cent, rising 44 basis points since the conflict began. Japanese government bond yields also moved higher, with the 10-year yield hitting a two-month high.

Foreign Portfolio Investors (FPIs) have remained aggressive sellers in 2026, pulling out over Rs 1 lakh crore from Indian equities so far. As per NSDL data, total outflows stood at Rs 1,01,527 crore, with Rs 88,180 crore of selling recorded in March alone.

The U.S. dollar strengthened as geopolitical tensions boosted demand for safe-haven assets. The dollar index rose 0.03 per cent to 99.53.

From a derivatives perspective, the Put-Call Ratio (PCR) stands at 0.80. On the put side, the 22,800 and 23,600 strikes saw meaningful additions in open interest, while 22,500 and 23,000 hold substantial open interest, making them key support zones. On the call side, open interest concentration is seen from 23,300 onwards, indicating strong resistance at higher levels. Overall, 22,500 remains a crucial support, while upside may face selling pressure.

Technically, Tuesday’s low of 22,470 is expected to act as immediate support for the Nifty. A break below this level could lead to further downside towards 22,400 and 22,300. On the upside, 23,400 is likely to act as a key resistance level.

In the derivatives segment, Sammaan Capital and SAIL remain under the F&O ban for March 23.

On the institutional front, Foreign Institutional Investors (FIIs) were net sellers on March 20, offloading equities worth Rs 5,518.39 crore, while Domestic Institutional Investors (DIIs) purchased shares worth Rs 5,706.23 crore. FIIs have now remained net sellers for 16 consecutive sessions.

On Friday, Indian markets ended higher, supported by a short-covering rally after the previous session’s sharp fall. The Sensex rose 325.72 points, or 0.44 per cent, to close at 74,532.96, while the Nifty 50 gained 112.35 points, or 0.49 per cent, to settle at 23,114.50.

However, U.S. markets closed sharply lower on Friday. The Dow Jones Industrial Average fell 0.96 per cent to 45,577.47, while the S&P 500 declined 1.51 per cent to 6,506.48, marking its lowest level since September. The Nasdaq Composite dropped 2.01 per cent to 21,647.61. For the week, the S&P 500 fell 1.9 per cent, while the Dow and Nasdaq declined over 2 per cent each.

Among major stocks, Nvidia fell 3.15 per cent, Apple declined 0.39 per cent, Microsoft dropped 1.84 per cent, Meta Platforms fell 2.15 per cent, Alphabet declined 2.27 per cent, and Tesla plunged 3.24 per cent. Super Micro Computer witnessed a sharp fall of 33.32 per cent.

In commodities, gold slipped below USD 4,400 per ounce, extending its decline for the fourth consecutive week amid rising inflation concerns and liquidity pressures. Spot gold fell 1.26 per cent to USD 4,438 per ounce, while silver declined 0.83 per cent to USD 67.56 per ounce.

Disclaimer: The article is for informational purposes only and not investment advice.