The Indian stock market ended mixed for the second session in a row on Friday, with the Sensex closing lower while the Nifty managed to finish in positive territory. Both indices saw sharp swings during the closing auction session (CAS).
The benchmarks were trading higher before the CAS began. Their indicative prices then fell sharply, with the Sensex briefly dropping nearly 1,000 points within seconds before recovering. The Nifty erased its losses by the close, while the Sensex remained marginally in the red.
1. Oil prices
Crude oil prices declined for a third consecutive session on Friday, but remained well above $100 a barrel, keeping concerns over inflation and market volatility alive.
JPMorgan said it no longer had a clear baseline outlook for oil prices, reflecting the uncertainty created by the ongoing conflict involving the US, Israel and Iran.
Oil prices had risen to near four-month highs earlier in the week after crude loadings at Saudi Arabia’s Yanbu export hub were suspended. Saudi Arabia also cancelled some shipments to Europe after an attack damaged its East-West pipeline.
Markets remain concerned that further attacks could disrupt supplies and shipping routes. Goldman Sachs has warned that oil could rise to as much as $120 a barrel if attacks on vessels in the Middle East intensify. If supplies return to normal, prices could move back towards $80 a barrel.
2. Iran tensions
The Strait of Hormuz remains a major concern for global energy markets. Preliminary shipping data showed that only four commodity vessels passed through the strait on Thursday, compared with a 10-day average of around 16.
Iran said it had struck an oil tanker from Togo that was attempting to cross the waterway. At the same time, large crowds gathered in Tehran in support of the government following the US and Israeli attacks launched in February.
Any further disruption in the region could put additional pressure on crude prices and global markets.
3. US Russia sanctions
US President Donald Trump signed a new Russia sanctions package into law on September 18. The legislation gives the US administration the power to impose tariffs of up to 100% on major buyers of Russian oil or natural gas.
The law, known as the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026, targets Russian officials, banks, energy and defence companies, as well as the country’s so-called shadow fleet of oil tankers.
India and China, among the major buyers of Russian energy, could face higher US tariffs if they meet the conditions under the law. However, the 100% tariff is not automatic and would depend on a decision by the US administration.
4. FII-DII flows
Foreign institutional investors (FIIs) remained net sellers for the fifth consecutive week, selling shares worth Rs 7,620 crore. Domestic institutional investors (DIIs), meanwhile, continued to buy, with net purchases of Rs 11,232 crore.
So far this month, FIIs have recorded net sales of Rs 7,041 crore, while DIIs have bought shares worth Rs 36,219 crore. The Nifty is down 3.05% from its August-end level of 24,080.40.
Over the past five weeks, FIIs have remained net sellers while DIIs have continued buying. This domestic support has helped limit the fall in the Nifty, which has moved from 24,154.90 to 23,346.40 over the period.
Bajaj Broking said continued FII selling and global uncertainties could keep the market volatile, while domestic institutional buying may provide some support. Investors will watch Brent crude, developments involving the US and Iran, and upcoming US and domestic PMI data for further direction.
Technical outlook
Sudeep Shah of SBI Securities said the Nifty remains below both its short- and long-term moving averages, which are also trending lower.
The daily Relative Strength Index (RSI) has recovered from a low of 22.23 and now stands at 34.17. A bullish crossover in the RSI indicates that the pace of the recent fall has eased and the index could see a short-term pause in its downtrend.
However, the key support levels will determine whether any recovery can continue.
The 23,050-23,000 range is seen as an important support zone, supported by the previous swing low and the 61.8% Fibonacci retracement level of the earlier rally.
A clear break below 23,000 could lead to further weakness, with the Nifty potentially moving towards 22,700 in the short term. Market participants will therefore closely watch how the index behaves around the 23,000 level.
