Sensex and Nifty 50 Outlook Clouded by US-Iran Conflict Tensions Ahead of Next Week's Trading

Indian Stock Market Slips Amid Geopolitical Tensions

The Indian equities remained under pressure on Friday, May 8, as escalating geopolitical tensions following reported Iran-US clashes near the Strait of Hormuz weighed on investor sentiment, dragging both benchmark indices down by more than 0.50%. The Nifty 50 declined 0.55% to settle at 24,193, while the Sensex dropped 0.67% to close at 77,321.

Despite sharp intraday swings, both indices managed to post weekly gains of over 0.70%. Broader markets delivered a mixed performance, with the Nifty Smallcap 100 advancing 0.22%, whereas the Nifty Midcap 100 edged lower by 0.15%.

Market Outlook for Next Week

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According to Ponmudi R, CEO of Enrich Money, markets are likely to remain highly volatile in the coming week, with geopolitical developments continuing to dictate investor sentiment. Market participants will closely track updates surrounding the ongoing U.S.–Iran tensions, particularly Iran’s response to the latest U.S. proposals and further developments concerning the Strait of Hormuz.

Donald Trump said Washington is expecting Tehran’s response later tonight on the proposal aimed at resolving the conflict. Any indication of diplomatic progress could boost market sentiment and risk appetite, while renewed military tensions or a collapse in negotiations may spark another wave of risk aversion across global markets.

Key Technical Levels to Watch

On the Sensex outlook, Hitesh Tailor, Technical Research Analyst at Choice Equity Broking Private Limited, said that from a technical standpoint, the index has shown a strong breakout with sharp upward momentum, indicating a clear shift in near-term trend in favor of bulls.

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The near-term outlook remains positive, supported by strong momentum; however, after such a sharp rally, some consolidation or volatility may emerge, especially considering ongoing geopolitical developments.

On the Nifty 50 outlook, Aakash Shah, Technical Research Analyst at Choice Broking, said that at the end of the week, the index settled at 24,176.15, registering a gain of 178.60 points or 0.74%.

The price action suggests that the index continues to maintain a positive undertone, although resistance near higher levels is restricting further upside momentum. On the downside, a breakdown below 23,800 could result in increased selling pressure.

Bank Nifty Outlook

On the Bank Nifty outlook, Shah added that the index briefly slipped below its 20-DEMA and the 50-day EMA, signaling weakness in short-term momentum and persistent selling pressure at higher levels.

From a momentum standpoint, the weekly RSI at 45.75 indicates subdued momentum with a neutral-to-negative bias. However, failure to reclaim higher levels may keep the index under short-term corrective pressure. Traders are advised to remain cautious and follow disciplined risk management while closely tracking key levels for the next directional move.