Nifty falls 2.09 pc as crude oil prices and global rates weigh on markets

Indian equity benchmarks ended lower for the fifth straight week, with the Nifty falling 2.09 per cent and Sensex 2.27 per cent. Surging crude oil prices, global interest-rate concerns, foreign selling and geopolitical risks weighed on market sentiment during the week

Mumbai: The Indian equity benchmarks posted notable losses for the fifth consecutive week amid a sharp rise in crude oil and worries over global interest rates.

Nifty declined 2.09 per cent during the week and shed 0.34 per cent on the last trading day to reach 23,398. At close, Sensex was down 120 points, or 0.16 per cent, at 74,781. It lost 2.27 per cent during the week.

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Analysts said that global macro developments weighed on investor sentiments. A firmer US inflation backdrop and rising Treasury yields — with the 10‑year US yield approaching the 5 per cent mark — reinforced expectations of a higher‑for‑longer rate environment and tightening global financial conditions.

The sell-off was broad-based, with major sectors ending lower during the week. Nifty realty emerged as the biggest loser on NSE down 6.54 per cent on a weekly basis. The Nifty IT index shed around 5.78 per cent during the week.

Indian equities saw sharp volatility due to the newly launched closing auction session, particularly on derivatives expiry days.

Crude oil emerged as the dominant headwind for domestic equities as attacks on tankers in the Strait of Hormuz intensified and Iran-aligned Houthi forces threatened oil shipments from the Red Sea region.

WTI Crude surged over 9.5 per cent moving above $104 per barrel, while Brent crude surged more than 8.5 per cent during the week.

Analysts noted that the crude price volatility has heightened India’s inflation risks and external-sector risks, with the potential to raise input costs and pressure corporate margins while reinforcing expectations of a higher-for-longer global interest-rate environment.

Broad market indices performed in line with the benchmark indices, as Nifty Midcap100 declined 1.40 per cent and Nifty Smallcap100 shed 0.94 per cent during the week.

The 23,300 zone remains the immediate support area for Nifty, while 23,500–23,600 region remains the immediate resistance zone.

Immediate support for Bank Nifty is placed around 56,200–56,000, while the 56,700–56,800 zone remains the key resistance area, market participants said.

Foreign institutional investors-led selling also emerged as another headwind for domestic equities. FIIs net sold Rs 1,795.19 crore worth of equities during the week, while domestic institutional investors (DIIs) net bought Rs 6,419.46 crore of equities.

Global macroeconomic and geopolitical risks are likely to keep Indian equities on edge in the week ahead, with crude oil prices, developments in the Middle East and shifting expectations for US monetary policy emerging as the key drivers of market sentiment, an analyst said.