Sensex And Nifty Slide For A Seventh Straight Week, High Crude Prices And Bond Yields Keep Investors On Edge

Mumbai witnessed the Sensex and Nifty, two key Indian stock market benchmarks, slip for a seventh straight week in late July 2021. Hiked crude oil prices, higher US bond yields, and selling by foreign investors collectively weighed on investor sentiment. The Nifty 50 dipped 0.88 percent while the BSE Sensex fell 0.54 percent over the week.

However, some respite came on Friday after Thursday's steep decline, with the Sensex recovering 315 points to 73,895.74 and the Nifty rising 77.40 points to 23,140.50. Analysts highlighted that rising Brent crude prices, hovering above $105 a barrel, and US benchmark WTI oil remaining above $90, added to investors' concerns. Concerns around rising energy prices were amplified due to their potential to increase India's import bill, fuel inflation, and raise costs for businesses.

Additionally, surging US 10-year Treasury yields, crossing the 5.10 percent mark, added pressure on Indian equities as higher yields make emerging market equities less appealing to global investors. The analysts' focus remained on the rupee amid strong foreign institutional investor selling which kept market participants wary. Despite the recent recovery, the level of 23,000 was identified as immediate support for the Nifty and 23,200 as nearby resistance.

The market's next move depended on whether crude prices and US bond yields ease and whether foreign selling cools down.