Markets end lower as FII selling, high crude prices weigh on sentiment

Indian equity benchmarks ended the week lower as foreign investor outflows and surging crude oil prices dampened sentiment. While broader markets showed resilience, analysts expect indices to remain range-bound amid global uncertainties, inflation concerns, and ongoing earnings season volatility.

Mumbai: The Indian equity benchmarks closed in the red this week, as persistent selling from the foreign institutional investors (FIIs) and higher crude prices weighed on market sentiment.

Nifty lost 0.73 per cent during the week and dipped 0.74 per cent on the last trading day to reach 23,997. At close, the Sensex was down 582 points or 0.75 percent at 76,913. It dropped 0.97 per cent during the week.

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“Investor sentiment remained cautious as the double blockade in the Strait of Hormuz continued to weigh on global markets, without meaningful progress in negotiations,” an analyst said.

Oil prices peaked at $126 per barrel for the first time in four years, intensifying inflationary concerns and raising the risk of fuel price hikes. The sharp rise in crude prices weighed on the Indian rupee and revived worries about capital outflows and widening deficits, due to the country’s heavy reliance on oil imports.

On the sectoral front, most indices traded in red. Major laggards included Nifty Metal, PSU Banks, Realty, and FMCG. Nifty IT and Pharma remained resilient.

Broader indices showed divergence with the benchmark indices during the week, as the Nifty Midcap100 only dipped 0.28 per cent, while Nifty Smallcap100 gained 1.62 per cent.

Despite market volatility, early Q4FY26 corporate earnings prompted investors to adopt a constructive stance. While the sell-off was broad-based, defensive and demand-led sectors such as pharmaceuticals, healthcare, telecom, and energy outperformed.

Geopolitical risks and inflationary pressures are expected to keep the Fed hawkish through 2026, adding uncertainty to the interest rate outlook, analysts noted.

Nifty 50 is expected to remain range-bound in the near term and is likely to oscillate between 23,500 and 24,500 levels, they said.

Bank Nifty underperformed the broader market, closing at 54,863, down 2.56 per cent for the week. It declined 0.98 per cent on the last trading day of the week.

Analysts expect Bank Nifty to extend consolidation in the broad range of 54,000-57,500 amid stock specific action during the quarterly earnings reports of the banking stocks.