Nifty under pressure as Israel-Iran tensions escalate; Key levels to watch on June 16
The Indian equity markets ended a volatile week in the red, dragged by both expiry-related choppiness and escalating geopolitical tensions. The Nifty declined for two straight sessions, closing the week on a weak note as Israel launched a fresh offensive on Iran, prompting retaliation and escalating concerns of wider regional conflict.
While India remains uninvolved directly, the economic ripples are hard to ignore. Brent crude spiked nearly 13% on Friday, briefly nearing $80/barrel—just days after hovering near $60. This surge in oil prices raised alarm bells across Dalal Street, with fears of higher inflation, a widening import bill, and possible dilution of RBI's recent monetary policy measures.
The Nifty did show some resilience by bouncing back 250 points from its intraday low of 24,472 on Friday—defending the crucial May 22 swing low of 24,462. However, the rebound wasn't enough to soothe broader concerns. With global markets reacting sharply—Dow Jones plunging over 700 points and safe havens like gold and bonds rallying—the domestic outlook remains shaky.
One major drag continues to be the Nifty Bank index, which has corrected more than 1,500 points over the past four sessions, giving up all post-RBI policy gains and slipping toward the psychological 55,000 mark. Technical analysts now peg this level as critical support, with resistance seen at 56,000.
Rajesh Bhosale of Angel One highlighted that Nifty remains rangebound between 24,450–25,200, with key support at 24,400–24,450 aligned with its 50-day moving average. A move above 24,825 and reclaiming 25,000 is crucial for bullish momentum. "We maintain a cautious stance and advise a wait-and-watch approach," he added.
Vaishali Parekh of Prabhudas Lilladher echoed similar views, noting that only a decisive breakout above 25,000 would signal a trend reversal, while 24,000 remains a vital support zone for market stability.
Nandish Shah from HDFC Securities warned that breaching 24,462 could intensify sell-offs, with the next downside target at 24,164. On the upside, resistance levels are noted at 24,847 and 24,936.
Meanwhile, Om Mehra from SAMCO Securities emphasized the importance of defending 55,000 on the Nifty Bank, with a break below that increasing downside risks. A sustained close above 56,000 could revive bullish sentiment.
As the conflict evolves, investors are advised to remain cautious. Unless tensions ease before Monday's open, volatility could persist, with global cues likely to dominate trade direction.
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