After seeing a gap-down start, domestic benchmarks Nifty and Sensex ended lower on Monday but formed bullish candles on the daily chart, suggesting buying emerging at lower levels. Analysts said domestic indices are likely to remain volatile in the near term, with limited scope for relief until meaningful progress is seen in the West Asia conflict. The breakdown of US–Iran peace talks over the weekend has heightened concerns over a prolonged standoff, they said. 

"The absence of an agreement has led to a sharp rise in crude oil prices and a weakening rupee, which could keep foreign fund flows under pressure. Additionally, the ongoing earnings season is expected to add to market volatility, keeping sentiment cautious," said Siddhartha Khemka - Head of Research, Wealth Management, Motilal Oswal Financial Services. 

Markets would be shut on Tuesday on account of Dr Baba Saheb Ambedkar Jayanti holiday. On Monday, the BSE Sensex fell 702.68 points or 0.91 per cent to close at 76,847.57. Nifty settled the day at 23,842.65, down 207.95 points or 0.86 per cent. The ⁠rupee closed at 93.3750 per dollar, down 0.7 per cent. Gold futures on MCX were trading 0.56 per cent, lower at Rs 1,51,800 per 10 grams

Nifty outlook
Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities a long bullish candle was formed on the daily chart at the lows, which indicates a formation of counter attack of bull-type pattern. After the series of bearish lower tops and bottoms formations in the recent past, Nifty registering a new higher low at 23,555 on Monday could be a sigh of relief for bulls to sustain the recent bounce back.

"The weakness of Monday has not damaged the underlying near-term uptrend status of the market. Nifty is now placed at the crucial support of 23500 levels and one may expect further upside in the near term. Immediate resistance is at 24,100," Shetti said.

Sudeep Shah, Head - Technical and Derivatives Research at SBI Securities said the 23,950–23,980 zone is likely to act as a key resistance for the index. A sustained move above 23,980 could extend the pullback rally towards 24,100, followed by 24,230 in the short term. Sha said 23,700–23,650 will serve as an immediate support zone for the index.

Sensex outlook
Aakash Shah, Research Analyst at Choice Equity Broking said the Sensex has slipped below the crucial 77,000 level, indicating near-term weakness. The immediate support for the index is seen near 76,250–76,400, while resistance is seen at around 77,300–77,450 levels. Shah said a breakdown below the support zone could extend the decline further, while any pullback towards resistance may face selling pressure.

"Overall, the market is exhibiting a weak and volatile structure, with sentiment turning cautious amid global uncertainties. The near-term outlook suggests continued consolidation with a negative bias, unless key resistance levels are reclaimed decisively," it said.

Nifty Bank outlook
Vatsal Bhuva, Technical Analyst at LKP Securities said Nifty Bank ended with a positive bias, forming a long green candlestick on the daily chart, indicating buying interest from lower levels after recent weakness. The price action suggests a likely consolidation within a broad range of 54,500 to 56,200, where 54,500 is expected to act as strong support and 56,200 as a key resistance zone, Bhuva said. 

"A decisive breakout beyond this range could trigger a directional move in the index. In the near term, immediate support is placed at 55,000, while resistance is seen around the 56,000 mark," he said.

Gold outlook
Jateen Trivedi of LKP Securities said gold witnessed sharp profit booking, falling over 2 per cent in early trade, after reports that the US may consider troop deployment to secure the Strait of Hormuz and 100% closed, raising concerns of prolonged disruption and elevated crude prices. 

"The initial decline was followed by a recovery, with prices moving back above $4,700, as markets balanced escalation risks with possible de-escalation outcomes. Volatility remains high as geopolitical uncertainty continues to dominate sentiment. In the near term, gold is expected to trade within a range of Rs 1,48,500–Rs 1,52,500.

Rupee outlook
Ongoing geopolitical tensions and risks around the Strait of Hormuz are keeping energy prices elevated, which is adding to inflation concerns and limiting rupee recovery. "The overall bias remains weak, with the rupee expected to trade in a range of 92.75–94.00 in coming session," Trivedi of LKP Securities said.

"All eyes are on the 10:00 AM EST window for potential U.S. Military movement following failed diplomatic talks. Meanwhile, local sentiment is cautious as investors await India's CPI data before Tuesday’s holiday, said Dilip Parmar – Senior Research Analyst, HDFC Securities.