Equities post eighth straight weekly loss as global headwinds intensify
The shortened trading week ended on Thursday, with the Sensex declining 570.59 points, or 0.79%, to close at 71,909.70, while the Nifty 50 fell 198.50 points, or 0.88%, to settle at 22,421.95
Equity markets experienced their eighth consecutive weekly decline, marking the longest losing streak in nearly 25 years, as various global factors contributed to a deteriorating investor sentiment. Persistent outflows from foreign funds, rising US bond yields, and crude oil prices nearing $100 a barrel negatively impacted investor confidence.
The recent streak surpassed the seven-week decline witnessed during the Covid-led market correction. Geopolitical tensions in West Asia and a weak rupee further added to concerns over India's macroeconomic outlook.
The shortened trading week concluded on Thursday, with the Sensex falling 0.79 percent to close at 71,909.70 points, while the Nifty 50 dropped 0.88 percent to settle at 22,421.95 points. Throughout the week, both indices experienced selling pressure, with the Nifty shedding 3.10 percent and the Sensex losing about 2,000 points. Both indices showed a partial recovery on Thursday, with selective buying near the close. The Sensex touched an intraday low of 71,292.88, while the Nifty fell to 22,217.
Foreign institutional investors (FIIs) continued to weigh on market sentiment, with their outflows being a significant concern. The US 10-year bond yield hovered around 5.3-5.34 percent, while the rupee weakened to approximately ₹96.23 against the dollar. Brent crude prices traded near or above $100 a barrel, which raised concerns over India's import bill, imported inflation, and corporate input costs. With India relying heavily on crude oil imports, sustained currency weakness could exacerbate domestic oil import costs.
Selling pressure was widespread across various sectors, with the BSE Consumer index declining 6.15 percent and the Auto index falling 5.85 percent during the week. Metals, FMCG, real estate, and power stocks also experienced pressure. However, IT stocks emerged as the only significant source of resilience, gaining 1.8 percent on Thursday due to buying activity in large-cap technology stocks ahead of the September-quarter earnings season.
Among Nifty constituents, Infosys gained 4.1 percent in Thursday's session, whereas Bajaj Auto fell 7.6 percent, and Maruti Suzuki declined 4.9 percent. Broader market indexes, such as the Nifty Midcap 100 and Nifty Smallcap 100, also experienced a decline on Thursday. The external environment posed additional uncertainties, with the US 10-year Treasury yield remaining relatively high and Brent crude prices staying above $100 a barrel.
Additionally, the rupee's depreciation could increase India's import bill and imported inflation, leading to rising input costs for oil-sensitive industries.
Experts from various financial institutions noted that the combination of elevated US Treasury yields and high crude prices posed a significant risk to investor sentiment. However, a moderation in US borrowing costs, stabilization of the rupee, and lower crude prices could help improve foreign investor flows. Stronger September-quarter earnings and sustained earnings growth would also play a crucial role in maintaining investor confidence.
Written by urgent.news from Hindu BusinessLine's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
