Week Ahead

The Sensex plunged 1,525 points, or 2.73 percent, to 54,334, and the Nifty50 declined 413 points, or 2.48 percent, to 16,245, weighed down by auto, banking & financials and consumption stocks. Metal, oil & gas and IT indices bucked the trend and curtailed losses.

The broader markets outperformed the frontliners. The Nifty Midcap 100 index fell 1.5 percent and smallcap 100 index 0.35 percent.

The market's direction would be heavily influenced by the ongoing geopolitical tensions. On the macroeconomic front, investors will be keeping a careful eye on China's and the United States' inflation numbers.

High oil prices raised risks of inflation and worries for corporate earnings as several sectors may face margin pressure over the increasing operations cost. Economic growth may also get hit over the short term and the trade deficit could get widened as India imports 80-85 percent of its oil requirement.

Technically Nifty has moved closer to its crucial support of 16,130 on March 4 and if that gets decisively broken in coming sessions, the index could see more selling towards the 16,000-15,800 range.

The index has formed a bearish candle, which resembles the Spinning Top pattern on the daily charts, indicating indecisiveness among the bulls and the bears. There was bearish candle formation on the weekly scale, indicating nervousness among traders and investors. So, overall the trend seems to be in favour of the bears with consolidation.

The options data indicates the Nifty50 could see a wider trading range of 15,800 to 16,700 in the coming sessions.