Here are 5 factors that could determine market action on March 9:
America, Israel and Iran war
As the conflict between Iran and the US-Israeli alliance continues to escalate, leaders from all sides have warned that the situation will worsen. US Defense Secretary Pete Hegseth said the war had “just begun”, while US President Donald Trump said he had “no time limit” on how long the war could last.
American officials have also said that their country has enough ammunition to continue military operations in the region for a long time. Conflict in the oil-rich Middle East escalated over the weekend after the US and Israel launched strikes on Iran that reportedly killed its supreme leader, Ayatollah Ali Khamenei. Iran responded with counter-attacks in several parts of the region. The lack of any visible diplomatic efforts to end the conflict has unsettled international investors.
Crude oil is moving above $90
Oil prices rose sharply as Israel, the US and Iran waged trade strikes for the eighth day in a row. Just last week, before the conflict started, the price of oil was around $62 per barrel. However, by Friday, US crude futures had risen as much as 12% amid fears of supply disruptions, before paring some gains. Brent crude was up $7.28, or 8.52%, at $92.69 a barrel, while West Texas Intermediate (WTI) was up $9.89, or 12.21%, to close at $90.90 a barrel.
Markets were jittery as the escalation of conflict in the Middle East disrupted shipping and energy exports through the Strait of Hormuz. This narrow strait between Iran and Oman normally transports about one-fifth of the world’s crude oil and liquid natural gas. In practical terms, oil equivalent to approximately 20% of world demand passes through the strait every day. With the effective closure of the waterway in the last seven days, about 140 million barrels of oil, which meets 1.4 days of the world’s demand, have been prevented from reaching international markets.
FII withdrawals continue
Foreign investors remained net sellers of Indian stocks during the previous session, selling shares worth Rs 6,030 crore, according to NSE data. Domestic investors remained net buyers, buying Indian equities worth Rs 6,971 crore on Friday. FIIs have sold nearly Rs 30,000 crore worth of Indian assets so far this month, as the war in the Middle East has spooked investors.
In addition, Morgan Stanley has reduced its exposure to Indian markets, while taking a more cautious stance on Asian currencies amid concerns that the Iran war could disrupt supply chains if oil flows through the Strait of Hormuz are not restored. “We remain defensive,” Morgan Stanley strategists said, adding that “Asia is heavily dependent on Middle Eastern crude oil, refined products and LNG supplies and we believe the market is more complacent about supply chain risks.”
Disappointing US jobs data
The U.S. labor market showed signs of weakening in February, with the Bureau of Labor Statistics reporting that nonfarm payrolls fell by 92,000. That marked a sharp turnaround from the downwardly revised gain of 126,000 jobs in January and was worse than the 50,000 increase that economists polled by Dow Jones had expected. The unemployment rate also rose to 4.4% from 4.3% last month.
“The headline number was very disappointing and will raise concerns that the labor market — despite the strong January jobs report — is softening,” Tim Holland, chief investment officer at Orion, told CNBC.
Poor technical organization
Indian equity markets are likely to start next week on a cautious note as global risk sentiment has worsened sharply. The current trend in the GIFT Nifty, which closed around the 24,300 level, indicates a bearish undertone compared to the Nifty close of 24,450, said Hariprasad K of Levelling Wealth.
This combination of macroeconomic uncertainty and geopolitical risk is likely to affect market sentiment in the near term. Unless there is a positive development in the Middle East conflict that lowers crude oil prices, Indian markets may witness continued volatility.
From a technical perspective, Parvesh Gaur of Swastika Investmart said the Nifty is supporting near 24300 but remains highly volatile. On the upside, the 24,900-25,000 range is expected to act as an immediate supply zone, where selling pressure could arise if the index attempts a recovery. On the downside, 24,300 remains the primary key support, and if the index breaks below this level, 23,800 will be the next key support area that traders will closely monitor.
(Disclaimer: The suggestions, recommendations, views and opinions given by the experts are their own. They do not represent the views of The Economic Times)
