India shares log longest weekly losing run since 2020 as oil prices bite

Indian shares experienced a modest recovery on Friday following a drop the previous day, but still recorded their longest weekly losing streak in six years due to high oil prices, which increased bond yields and raised inflationary concerns. The Nifty 50 rose 0.34% to 23,140.50, while the Sensex climbed 0.43% to 73,895.74. Over the week, they declined 0.9% and 0.5%, marking their seventh consecutive weekly downturn.

Prior to this week, the Nifty 50 had only experienced such a streak four times in the past 25 years, with the longest being nine weeks in 2001. The main hurdle for markets is the rise in bond yields, caused by surging crude oil prices, according to Pankaj Pandey, head of retail research at ICICI Securities. He warned that prolonged elevated yields could adversely affect economic outlooks and equity valuations.

Of the 16 major sectors, 11 suffered losses during the week. Financials and IT stocks both encountered their fourth weekly decline. Financial companies faced heavier sell-offs due to worries about proposed insurance commission caps, while IT stocks dropped due to fears of higher US rates and concerns about artificial intelligence.

Brent crude oil prices lingered near $105.5 per barrel amid market deliberations over the potential US-Iran truce versus growing threats of Houthi attacks on Saudi Arabia. Oil prices have been a central focus for markets since late February when the US and Israel conducted joint strikes on Iran, sparking a regional conflict. With no clear signs of recovery without a significant easing of tensions in the Middle East, analysts anticipate continued market challenges.

On the NSE, India achieved its long-awaited debut as the country's largest bourse, valued at approximately $47 billion. State-run Coal India emerged as the top weekly gainers in the Nifty 50, rising around 4% on robust demand and optimistic earnings projections.