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Nifty: Sharp surge in crude oil pushes Nifty towards 3-month lows

ICICIdirect Research 11 Sep 2026 DISCLAIMER

A nearly 30 per cent surge in crude oil prices fueled by escalating geopolitical tensions has driven the Nifty into an extended 5-week corrective phase, a 3-month low. Nifty settled at ~ 23400 mark, down 2% The index trades well below its 200-day EMA. Broader markets showed relative resilience; Midcap and Smallcap indices lost 1.5% and 1%, respectively, outperforming the benchmark.

What we expect:

  • Market direction will hinge primarily on global macroeconomic developments, with key triggers including incoming inflation data and the upcoming US Fed policy rate decision. On the domestic front, any cool-off in crude oil could provide cushion for the Nifty. 
  • Holding Friday’s panic low of 23,200 keeps a pullback toward the 24,000 psychological mark alive. Only a breach below 23200 would result into extended correction towards 22700
  • With past two weeks breather, Nifty midcap and small cap indices retested its 20 months consolidation breakout. The Smallcap/Nifty ratio chart is breaking out of an 18-year downward sloping trendline, signaling the start of a secular uptrend in smallcaps.

Key Factors to Monitor

a)      Domestic Inflation Print

b)     US Federal Reserve Policy Outcome & Commentary

c)      Geopolitical Developments

d)     Cool off in Crude Oil

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