India stocks log fifth weekly loss as oil fears grip markets
India’s equity benchmarks fell for a fifth consecutive week on Friday, as the escalating Middle East conflict pushed crude oil prices higher, raising concerns about inflation and global interest rates. The Nifty 50 dropped 0.34% to 23,398.1 and the BSE Sensex lost 0.16% to 74,781.76. Both indexes fell over 2% this week and about 4.8% over the last five weeks. The sell-off was broad-based, with…
India's leading stock market indices experienced their fifth week of decline on Friday, as geopolitical tensions in the Middle East continued to press upward on global oil prices. The Nifty 50 index fell 0.34% to 23,398.1, while the BSE Sensex slipped 0.16% to 74,781.76. This week, both indexes slipped over 2%, marking a substantial 4.8% decrease over the past five weeks.
The market-wide decline affected 14 out of the 16 major sectors, with smaller and mid-cap stocks also suffering, with their values dropping by 0.9% and 1.4% respectively.
The rupee weakened by 1% this week, marking its steepest weekly decline since mid-May. This trend continued as Brent crude futures surged over 8%, reaching $104 per barrel, due to escalated attacks on tankers in the Strait of Hormuz and the threat of Saudi Arabian oil exports to the Red Sea by Iran-aligned Houthis. Market analyst Ambareesh Baliga expressed concern over the sudden surge in Brent crude prices, stating that unless the crisis is resolved and crude prices ease, markets will likely face a prolonged period of subdued performance.
The rising oil prices have fueled inflation fears, driving global bond yields to multi-year highs. Typically, higher bond yields decrease the attractiveness of risk assets, such as equities, for investors. Financial giants, including heavyweight Financials, also faced a decline, with HDFC Bank, a top private-sector lender, dipping 0.5% and ICICI Bank dropping 3.1%.
Reliance Industries, the third highest weighted stock on the Nifty 50, saw a 4.9% loss this week due to unrest over the succession of its CEO. The IT index also took a significant hit, plummeting 5.8%, marking its most substantial weekly percentage decline since April. This decline was primarily due to apprehensions surrounding a potential Federal Reserve rate hike next week.
Investors are eagerly awaiting U.S. consumer inflation data expected later on Friday, as it is anticipated to have a significant impact on the upcoming Federal Reserve interest rate decision.
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