Will Nifty extend gains to 4th session on Monday? US sanctions on Russia among factors to decide D-Street action

The Indian stock market saw divergence in its benchmark indices for the second consecutive session, with the Sensex closing in the red and the Nifty in the green following sharp swings during the closing auction session (CAS).

Sensex and Nifty both traded in the green before the CAS began. The indicative prices of both benchmark indices sharply tumbled, with the Sensex plunging nearly 1,000 points within a few seconds, before making a sharp recovery. While the Nifty managed to recover all losses during the CAS, the Sensex ended with marginal losses in the red despite a sharp rebound.

Here are 4 factors that will decide market mood starting Monday:


1.) Oil prices

Oil prices fell for a third straight session on Friday, but the outlook remained uncertain as crude continued to trade comfortably above $100 a barrel. JPMorgan said on Thursday that, for the first time since the start of the US-Israeli war on Iran in February, it no longer had a clear baseline view for oil markets.

Oil prices had climbed to near four-month highs earlier in the week after crude loadings at Saudi Arabia's Red Sea export hub of Yanbu were suspended. Riyadh also cancelled some deliveries to Europe after its East-West pipeline was damaged in an attack last week.

The possibility of further supply disruptions has increasingly tilted the risks for oil prices to the upside. Daan Struyven, co-head of global commodities research at Goldman Sachs, said recent attacks had shown that shipping disruptions could spread and become more severe.

Goldman Sachs has outlined a scenario in which oil prices could reach as high as $120 a barrel if attacks on vessels in the Middle East intensify. If exports return to normal, the bank expects oil prices to fall back toward $80 a barrel. Struyven told Bloomberg that shipping risks had become an important driver of oil prices.

2.) Iran war tensions

The Strait of Hormuz also remained largely cut off. Just four commodity vessels passed through the strait on Thursday, well below the 10-day average of about 16, preliminary shipping data showed on Friday.

Iran said it struck an oil tanker from Togo that was attempting to transit the Strait of Hormuz. Meanwhile, hundreds of thousands of people rallied in Tehran in the largest show of support for the government since the United States and Israel launched attacks in February.

3.) Trump signs Russia sanctions bill

US President Donald Trump on Friday, September 18, signed into law a sweeping Russia sanctions package that gives him the authority to impose tariffs of up to 100% on the five biggest purchasers of Russian oil or natural gas, potentially affecting major buyers such as India and China.

The “Lindsey O. Graham Sanctioning Russia and Iran Act of 2026” targets Russian officials, banks, energy and defence sectors, as well as the country's so-called shadow fleet of tankers used to transport oil while circumventing existing sanctions.

The new tariff authority could expose major buyers of Russian energy, including India and China, to higher US tariffs if they meet the criteria set out under the law. The tariff provision gives the US administration discretionary authority rather than automatically imposing a 100% tariff.

4.) FII DII Activity

On the flows front, FIIs remained net sellers for the fifth straight week, offloading Rs 7,620 crore. DIIs extended their buying streak with net purchases of Rs 11,232 crore, helping the index recover from its mid-week lows. Month-to-date, FIIs have sold a net Rs 7,041 crore, against DII net buying of Rs 36,219 crore, with the Nifty down 3.05% from its August-end close of 24,080.40. Over the past month, FIIs were net sellers in all five weeks, while DIIs remained net buyers throughout, cushioning the Nifty's decline from 24,154.90 to 23,346.40.

Going ahead, sustained FII selling and global headwinds are likely to keep markets volatile, while steady domestic institutional buying should continue to limit the downside, Bajaj Broking said. Market participants will closely track Brent crude prices, US-Iran geopolitical developments, and upcoming US and domestic PMI data for cues on the near-term direction.

Technical set up

Sudeep Shah of SBI Securities suggests Nifty continues to trade comfortably below its short- and long-term moving averages, with these averages still trending downward. The Daily RSI rebounded after testing a low of 22.23 and is currently placed at 34.17. The RSI has also witnessed a bullish crossover, suggesting that the intensity of the recent correction has moderated and a short-term pause in the downtrend could be underway. This improvement in momentum offers some relief, but the crucial support levels will decide whether the recovery can sustain.

The 23,050–23,000 zone will act as a crucial support area, as it represents the confluence of the previous swing low and the 61.8% Fibonacci retracement of the prior upward rally. A decisive break below 23,000 could signal a resumption of the downward move, potentially dragging the index towards 22,700 in the short term. Therefore, the next major clue could emerge from how Nifty behaves around the 23,000 mark.

Disclaimer: This article has been written by Veer Shamra, who is not a SEBI-registered Research Analyst or an Investment Adviser. Veer Sharma and his/her ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here