Hormuz blockade, crude, and CPI keep D-Street on edge

Markets continued their downward trend for a third consecutive day on Thursday, as investors faced a dilemma between stable domestic inflation and the near-closure of the Strait of Hormuz. The Nifty 50 fell 40.10 points to 24,395.85, while the Sensex managed only a slight gain to close at 78,079. The market, attempting to rebound twice during the session, failed to maintain either move.

Stranded freight in the strait had dropped 90 percent, with Iran challenging US claims to control the waterway and peace negotiations stalling. Brent crude hovered around $87–89 a barrel, while WTI slipped over 1 percent to about $81.5 a barrel due to reduced demand. Domestic crude futures plummeted nearly 2.5 percent below ₹7,800.

India's CPI inflation surged to 4.45 percent in July from 4.4 percent in June, surpassing the Reserve Bank of India's 4 percent target for two months in a row. WPI manufacturing inflation also rose sharply to 7.5 percent in June. Vinod Nair of Geojit Investments noted that geopolitical uncertainty in the Middle East continues to hinder a stronger risk-on move.

Sectoral performance varied, with real estate, FMCG, and chemicals providing support, while metals, banking, financial services, and oil & gas faced pressure. Bank Nifty ended the day at 57,635.25, down 250.60 points or 0.43 percent. The broader market managed to stay afloat, with the Nifty Midcap 100 gaining 0.15 percent and the Nifty Smallcap 100 advancing 0.27 percent.

The rupee weakened by 10–11 paise to close around 95.43–95.48 against the dollar, suffering as importer dollar demand increased alongside inflation and higher crude prices. Gold on the MCX declined roughly ₹800 to ₹1,54,050, while COMEX gold slipped nearly $25 to $3,385 per ounce. Notable earnings included Astral, up 8 percent on 48 percent profit growth, and Solar Industries, also increasing over 8 percent on strong demand in the defense sector.

However, Page Industries dropped after revealing margin contraction in the premium consumption segment. In a broader structural perspective, a recent Equirus Capital policy paper suggested that India's $20 trillion GDP target by 2036 could be achieved through twenty reforms, including a National GCC Policy and Railways listing, a sovereign fund following Temasek's model, and administrative commitment rather than new investments.

For Friday, India will release WPI data, EU GDP figures, and US retail sales, along with quarterly results from Ashok Leyland, NMDC, Alkem Laboratories, and Cochin Shipyard. The Nifty is expected to trade near sideways with a slight negative bias, with geopolitical developments in West Asia and crude price movements likely to dictate early market sentiment.