Nifty ends week in red as Iran tensions, crude keep bulls at bay

The Nifty 50 ended the week in decline, slipping for four consecutive days due to surging crude oil prices and heightened geopolitical tensions in the Middle East. By the close, the index had settled at 24,366, down 29.85 points or 0.12 percent. The BSE Sensex mirrored the downtrend, falling 70.71 points or 0.09 percent to 78,009.

Throughout the week, the Nifty 50 remained within a narrow 100-point range, only experiencing a modest 10-point rebound during the Closing Auction Session. The Nifty Midcap 100 and Nifty Smallcap 100 also dipped, with the former losing 0.53 percent and the latter falling 0.69 percent. Sectorally, the media and consumer durables sectors saw modest gains, while pharma, metals, auto, and capital markets faced significant selling pressure.

The key overhang for investors was crude oil, with Brent hovering near $87 per barrel and WTI around $82, both prices bearing a geopolitical risk premium. Tensions around the Strait of Hormuz, ongoing Iran-Oman talks, and the US signaling an indefinite naval blockade of Iran kept supply disruption concerns alive. The global oil demand outlook was also cut by the IEA this week, citing prolonged conflict and elevated prices already weighing on consumption.

The Indian rupee continued its depreciating trend, trading between ₹95.40 and ₹95.45 against the dollar, though gains were limited as the market anticipated potential RBI intervention. Asian markets showed a mixed performance, with South Korea's Kospi rising 2.41 percent and Japan's Nikkei 225 advancing 0.59 percent. European markets were mixed as well, balancing optimism from Wall Street's strong close with renewed concerns over the Middle East.

On the domestic front, India's trade deficit widened to $32 billion in July, but strong exports in electronics, engineering, and chemicals were expected to keep the external balance manageable. The monsoon deficit had narrowed to 12 percent of the Long Period Average as of August 12, easing food inflation pressure. For the year 2027, GDP growth is forecasted at 6.8–7.0 percent, with CPI inflation estimated at 5.1 percent.

Analysts expect the Indian equities market to remain range-bound next week, with global cues and macro developments playing the primary role.