Crude fears cap Nifty’s gap-up; rupee posts biggest single-day gain since July

Benchmarks opened higher on Thursday but quickly lost momentum, closing lower for the fourth consecutive session. The surge in Brent crude oil prices above $97 a barrel, coupled with ongoing geopolitical tensions, deterred investors despite the rupee's significant gain. "Markets failed to capitalize on early gains and ended lower on the weekly expiry day... investor remained cautious amid lingering geopolitical uncertainties and elevated crude oil prices," Ajit Mishra, SVP Research at Religare Broking, noted.

The Nifty 50 declined 41 points, or 0.17 percent, closing at 23,873, while the Sensex dropped 417 points, or 0.55 percent, settling at 76,152.86. This marks the third straight week of losses for the Sensex and the fourth for the Nifty. The closing auction session contributed to the decline, with the Nifty shedding nearly 30 points in the final minutes.

IT, FMCG, and auto stocks were among the main losers, with Hexaware falling 2.4 percent after its CEO resigned and Godrej Consumer dropping around 3 percent due to cautious near-term guidance. Financial stocks and real estate companies showed pockets of strength, with RBL Bank surging over 4.5 percent and Axis Bank and HDFC Bank rising 0.9 percent and 0.4 percent respectively.

The Bank Nifty ended 208 points higher, driven by strong inflows from the Reserve Bank of India's concessional foreign-currency swap scheme, which saw Indian banks mobilize $136.4 billion, surpassing market expectations. This surge lifted the rupee to its biggest single-day gain since July 27, appreciating 49 paise to close at 94.48 against the dollar.

Technical analysis indicates that the USD/INR pair is showing weakness, with support at 84.10 and resistance at 84.95. Gold prices also rose as softer-than-expected US private payroll data fueled expectations of a less hawkish Federal Reserve. Gold was seen trading between ₹1,51,000–₹1,55,500, and market participants will closely watch Friday's US Non-Farm Payrolls data for further policy cues.

The broader markets held up well, with the Nifty Midcap 100 up 0.37 percent and the Nifty Smallcap 100 increasing 1.20 percent, indicating strong stock-specific participation despite the struggles of the frontline indices. Additionally, India's Services PMI for August came in at 54.1, up from 53.3 in July, reflecting a 15-month high in employment growth, which adds a positive domestic macroeconomic indicator to the global backdrop.

Looking ahead, investors will closely monitor US Non-Farm Payrolls and unemployment data on Friday for insights into the Fed's policy direction. Key factors for domestic markets include movements in crude oil prices, developments in the Middle East, and foreign fund flows. The Nifty faces immediate resistance around the 24,000–24,200 range, with a decisive close below 23,800 potentially paving the way for a further decline to 23,600, the intersection of a prior gap area and the July 2026 low.