Week ahead: US-Israel-Iran conflict, rising crude oil prices, RBI MPC meeting among key market triggers to watch

Indian markets extended their decline for the sixth consecutive week, reflecting persistent weakness in the broader market structure. While there were intermittent signs of recovery, especially towards the end of the week, the overall sentiment remained cautious amid global uncertainties and continued selling pressure.

NIFTY 50 closed the week near the 22,713 mark, while the SENSEX ended the week slightly lower. Despite the modest losses, the underlying trend continues to suggest a market struggling to attract sustained buying interest.

A key highlight of the week was the sharp intraday recovery seen in the second half of the week. This rebound was primarily driven by short covering. The trigger came from the Indian rupee, which recovered after hitting record lows earlier in the week.

However, the broader macro environment remains challenging. Escalating geopolitical tensions, particularly in the Middle East, caused crude oil prices to rise sharply during the week. Rising crude oil prices are a major concern for India given its dependence on imports.

Sectorally, the market witnessed a mixed trend. NIFTY IT (+3.0%) and NIFTY Metal (+2.6%) showed relative strength. On the other hand, NIFTY Pharma (-3.3%), NIFTY Consumer Durables (-1.6%) remained under pressure.

From a technical standpoint, HDFC Bank has clearly entered a strong bearish phase after correcting over 25% this year. The stock has slipped below its 200-day moving average, indicating a loss of long-term trend support and signalling sustained weakness. The stock is oversold, hinting at a short-term bounce. However, it does not indicate a reversal.

However, the spotlight will be on the US CPI data (MoM), expected after a 0.3% rise previously. Any upside surprise in inflation could delay rate cut expectations from the Federal Reserve, keeping yields and volatility elevated.

The key event for domestic markets will be the policy outcome from the Reserve Bank of India, with the Monetary Policy Committee meeting scheduled between April 6–8. While the repo rate currently stands at 5.25%, the Street will closely watch the stance and commentary for any signals on future rate trajectory.

Market breadth

The breadth of the NIFTY50 index weakened sharply this week, with the percentage of NIFTY50 stocks trading above the 50-day moving average (DMA) slipping to single digits (5–10%). This suggests widespread selling across the index, with few stocks showing short-term upward trends.

While such extreme readings typically reflect oversold conditions, they also confirm that the broader structure remains weak. While this creates the potential for short-covering rallies, sustained recovery will require a meaningful improvement above 50% in market breadth.

FIIs cash market

Foreign institutional investors (FIIs) ended FY26 on a bearish note, selling equities worth ₹1.88 lakh crore, and carried forward the same trend into FY27 with outflows of ₹18,262 crore at the start of the year. However, the intensity of selling has moderated compared to FY25 and FY24, when FIIs had offloaded a higher ₹3.06 lakh crore and ₹3.02 lakh crore, respectively.

NIFTY50 outlook

Despite a sharp recovery on Thursday, the broader technical structure of the NIFTY50 index remains weak. The index continues to trade below its key moving averages and momentum indicators remain subdued. Meanwhile, the volatility remains high, with India VIX above 25 indicating uncertainty and the likelihood of sharp price fluctuations.

In terms of levels, 23,000 remains a crucial resistance zone, while 22,200 to 22,000 acts as immediate support. For any shift towards a range-bound structure, a sustained move above resistance is required, while failure to hold support may keep the bearish bias intact.

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