Crude Oil And Global Rate Fears Bruise Markets, Sensex and Nifty Slide Nearly 2% For The Week

Mumbai: Indian equity markets endured a fifth consecutive week of decline as surging oil prices, rising U.S. Treasury yields, and foreign investor selling weighed heavily on the nation's financial markets. The Nifty 50 fell 2.09% over the week, settling at 23,398, while the Sensex dropped 2.27% to end at 74,781.76. The biggest headwind for Indian equities was surging crude oil, which erupted amid heightened tensions in the Strait of Hormuz and threats of shipping disruptions in the Red Sea.

Worries over reduced supply prompted WTI crude to surge more than 9.5% to exceed $104 per barrel, and Brent crude to rise over 8.5%. For India, higher oil prices could stoke inflation, elevate corporate input costs, and compress profit margins. Global interest rate concerns further unsettled markets following persistent U.S. inflation and soaring Treasury yields, with the 10-year yield approaching 5%.

The slide impacted various sectors, with Nifty Realty plunging 6.54% and Nifty IT falling around 5.78%. Broader market weakness was evident, with the Nifty Midcap 100 falling 1.40% and the Nifty Smallcap 100 declining 0.94%. Foreign institutional investors continued to offload Indian equities, selling ₹1,795.19 crore worth of stocks during the week, while domestic institutional investors made up for some of the loss by making net purchases worth ₹6,419.46 crore.

Despite the market sell-off, FIIs offloaded ₹5,610 crore in three sessions, while domestic investors poured ₹23,160 crore into Indian stocks. Market analysts anticipate elevated volatility next week as investors monitor developments in the Middle East, crude oil prices, and shifting expectations surrounding U.S. monetary policy.

Crucial support for the Nifty 50 is seen around the 23,300 level, with resistance positioned around 23,500-23,600. Traders will also keep an eye on the newly launched closing auction session and volatility around the expiry day.