Nifty, Sensex post notable weekly losses amid global interest rate concerns

Indian equity benchmarks declined for the third consecutive week amid concerns over global interest rates and geopolitical uncertainty. The Nifty fell 0.31 per cent during the week, while the Sensex declined 0.36 per cent, even as both indices recovered on Friday following strong buying in IT stocks.

Mumbai: Indian equity benchmarks posted losses for the third consecutive week amid concerns over global interest rates and geopolitical uncertainty.

The Nifty declined 0.31 per cent during the week but gained 0.35 per cent on Friday to close at 24,175. The Sensex rose 330 points, or 0.43 per cent, on the last trading day to close at 77,264, but lost 0.36 per cent during the week.

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Analysts said volatility surrounding the introduction of the Closing Auction Session (CAS) for F&O stocks also weighed on investor sentiment.

The monthly derivatives expiry witnessed sharp price movements during the closing auction, raising concerns over increased short-term volatility and price dislocations, particularly in heavyweight stocks.

Although the markets recovered sharply on Friday, supported by strong buying in IT stocks following upbeat global technology cues, the benchmark indices remained under pressure.

Comments from the US Federal Reserve Chairman at the Jackson Hole symposium kept investors cautious about the future trajectory of interest rates, with markets increasingly assessing the possibility of a less accommodative policy environment.

Rising uncertainty over US inflation and bond yields could continue to influence foreign institutional flows into emerging markets, analysts said.

Sectoral performance remained mixed, with IT emerging as the strongest performer following renewed global technology optimism and encouraging Nvidia results. The Nifty IT index gained around 2.45 per cent during the week, while weakness in select banking and consumer stocks continued to weigh on the broader benchmarks.

Pharma and select metal stocks also witnessed buying interest, while lower crude prices provided some relief to sectors sensitive to energy costs.

Brent crude prices declined by over 4 per cent during the week to around $88 per barrel as markets reacted to expectations of improved shipping conditions through the Strait of Hormuz.

Nevertheless, geopolitical risks remain elevated and any renewed disruption to energy supplies could quickly reverse the recent decline in crude prices, analysts noted.

The 24,000-23,800 zone remains the immediate support area for the Nifty, while 24,300-24,400 is the immediate resistance zone.

Immediate support for the Bank Nifty is placed around 56,900-56,500, while the 57,800-58,000 zone remains the key resistance area, market participants said.

Investors will closely track domestic GDP data and global economic releases that are likely to determine market direction. US employment data and the August non-farm payrolls report are scheduled to be released on September 4.