Nifty 50 Extends Losing Streak to 5 Weeks as Crude Surges to $109

Market Update at 04:10 PM: Indian benchmark indices ended lower on Friday as escalating geopolitical tensions in the Middle East pushed crude oil prices sharply higher, reviving concerns over inflation, interest rates and global economic growth.

The Nifty 50 witnessed a volatile trading session, opening at 23,270.30 and slipping to an Intraday low of 23,231.40 in early trade. Buying interest emerged at lower levels, helping the index recover gradually. The benchmark moved above the 23,400 mark in afternoon trade and touched an intraday high of 23,448.10 before giving up some gains towards the close.

During the closing auction session, both benchmark indices recovered from their day’s lows, with the Nifty 50 settling near the 23,400 level and the Sensex closing above 74,700.

At the close, the Nifty 50 declined 79.70 points, or 0.34 per cent, to 23,398.10, while the Sensex fell 120.84 points to 74,781.76. The Bank Nifty gained 0.24 per cent, outperforming the broader market.

The volatility gauge, India VIX, climbed more than 4 per cent and moved above the 12 mark, signalling increased uncertainty among market participants.

On a weekly basis, the Nifty 50 declined 2.09 per cent, marking its fifth consecutive weekly decline.

Brent crude prices witnessed sharp volatility during Friday’s session after briefly crossing the USD 109 per barrel mark amid rising tensions between the U.S. and Iran. Prices later eased below USD 105 per barrel due to profit booking and technical correction but remained on track for a significant weekly gain.

The surge in crude oil prices has raised concerns over possible disruptions in global energy supplies. Any prolonged impact on oil shipments from the Middle East could increase inflationary pressure and influence global central banks’ interest rate decisions.

The Indian rupee remained under pressure on Friday as rising crude oil prices increased concerns over India’s import bill and external balance.

The domestic currency declined for the fourth consecutive session, falling 0.1 per cent to Rs 95.55 per U.S. dollar and heading towards a weekly decline of more than 1 per cent. Weakness in domestic equities and cautious sentiment in bond markets also weighed on the rupee.

However, intervention from the Reserve Bank of India helped restrict the pace of depreciation. Despite this support, sustained crude oil strength remains a key risk for the currency due to India’s high dependence on imported oil, which could impact inflation and widen the trade deficit.

The broader market also remained under pressure, with Mid-Cap and Small-Cap stocks witnessing selling activity. The Nifty Midcap 100 index declined 0.26 per cent, while the Nifty Smallcap 100 index slipped 0.58 per cent during Friday’s session.

Sectoral performance remained weak, with only four of 11 major sectoral indices ending the session in positive territory. The Nifty Bank index emerged as the top-performing sector, rising 0.24 per cent. Banking stocks gained momentum, supported by buying interest in key private sector banks.

Yes Bank surged more than 5 per cent, while HDFC Bank gained more than 2 per cent after a Bahrain court ruled in favour of the bank in a bond-related case.

Meanwhile, the Nifty Realty index was the biggest laggard, declining 2.70 per cent. The sector extended its losing streak for the sixth consecutive session and touched a 10-week low amid continued selling pressure.

Oil exploration companies witnessed selling pressure after crude oil prices retreated from their intraday highs. Shares of ONGC and Oil India declined more than 2 per cent each on Friday as investors booked profits following the sharp rise in crude prices earlier in the session.

European equity markets maintained their positive momentum during Friday’s session, reflecting improved investor sentiment across the region. Germany’s DAX index gained 0.54 per cent to 25,537.14, while the UK’s FTSE 100 advanced 0.54 per cent to 10,666.61. France’s CAC 40 climbed 0.61 per cent to 8,166.22.

The gains across major European indices indicated improving risk appetite despite ongoing global uncertainty.

U.S. stock futures traded higher, pointing towards a positive opening for Wall Street. Dow Jones futures gained 0.58 per cent to 52,395.00, while S&P 500 futures advanced 0.58 per cent to 7,642.75. Nasdaq 100 futures outperformed, rising 0.66 per cent to 29,326.50, supported by strength in technology stocks.

Market Update at 2:35 PM: The Indian benchmark equity indices pared their losses during Friday’s session as gains in IT and FMCG stocks helped limit the downside.

As of 2:00 PM, the Sensex fell 186.94 points or 0.25 per cent to 74,715.65, while the Nifty 50 declined 76.75 points or 0.33 per cent to 23,401.05.

Among the Nifty 50 constituents, Hindalco Industries, Tata Steel and Bajaj Finance were the Top Losers, exerting pressure on the benchmark index.

The broader market remained under pressure, with the Nifty MidCap 100 and Nifty SmallCap indices falling 1.42 per cent and 1.40 per cent, respectively.

At the sectoral level, the Nifty Realty index was the biggest laggard, while the Nifty IT index was the only sectoral index to trade in positive territory. FMCG stocks also advanced, supporting the benchmark indices and helping them pare some of the session’s earlier losses.

Market Update at 12:20 PM: The domestic equity market remained under pressure in the afternoon session on Friday, although losses moderated from the day’s lows. As of 12:00 PM, the Sensex was down 375.90 points or 0.50 per cent at 74,526.69, while the Nifty 50 declined 134.70 points or 0.57 per cent to 23,343.10.

The broader market also witnessed selling pressure, with the Nifty MidCap index and Nifty SmallCap index falling 0.72 per cent and 0.73 per cent, respectively. The decline indicated weakness beyond frontline stocks as investors remained cautious amid prevailing macroeconomic concerns.

Realty stocks emerged as the biggest laggards, with the Nifty Realty index declining around 4.5 per cent. Rising crude oil prices, higher bond yields and growing concerns over a possible delay in interest rate cuts weighed on sentiment toward the interest-rate-sensitive Real Estate sector.

Several real estate counters witnessed heavy selling pressure, with some stocks falling as much as 7 per cent in intraday trade.

Among the key losers in the benchmark index, metal and financial stocks remained under pressure. The selling in these sectors contributed to the weakness in the frontline indices.

However, selective buying was seen in IT and FMCG stocks, which helped limit the broader market decline and prevented the benchmark indices from slipping further during the afternoon session.

Market Update at 09:30 AM: The Nifty 50 and the Sensex slumped in early trade on Thursday, tracking declines across global equity markets amid rising bond yields and higher energy prices.

As of 9:19 AM, the Nifty 50 fell 222.55 points or 0.95 per cent to 23,255.25, while the Sensex declined 660.90 points or 0.88 per cent to 74,241.69.

Hindalco Industries, Tata Steel and Bajaj Finance were the top losers in the Nifty 50 index during early trade, weighing on the benchmark amid broad-based selling pressure.

The broader market indices also witnessed significant declines. The Nifty MidCap 100 fell 1.42 per cent, while the Nifty SmallCap index declined 1.40 per cent, indicating heightened selling pressure beyond the benchmark indices.

Among sectoral indices, the Nifty Realty index witnessed the steepest decline, with most sectors trading in the red. The Nifty IT index was the only sectoral index to trade with gains during early trade.

Pre-Market Update at 7:40 AM: Indian equity markets are likely to open on a cautious note on Friday as rising crude oil prices, elevated U.S. bond yields and renewed geopolitical tensions weigh on global risk sentiment. GIFT Nifty signalled a weak start, while pressure across Asian markets and higher energy prices remain key concerns for domestic investors.

GIFT Nifty was trading around 23,360.50, down 99.50 points or 0.42 per cent compared with the Nifty 50’s previous close of 23,477.80, indicating a negative opening for Indian benchmark indices.

The previous session remained largely range-bound, with the Nifty 50 recovering during the Closing Auction Session (CAS) to end 46.30 points higher at 23,477.80. The Sensex gained 138.36 points or 0.19 per cent to close at 74,902.59.

Despite the positive close, the broader market setup remained cautious as elevated crude oil prices, foreign fund selling and global uncertainty continued to weigh on investor sentiment. Analysts said the immediate bias remains negative, with a sustained formation of higher highs and higher lows on the daily chart needed to signal a meaningful pause in the ongoing downtrend.

U.S. equity markets ended lower as another rise in oil prices and higher bond yields pressured risk assets. The Dow Jones Industrial Average declined, while the S&P 500 and Nasdaq also closed lower.

The latest inflation concerns have strengthened expectations of tighter monetary policy, while higher energy prices could add to inflationary pressures and complicate the U.S. Federal Reserve’s policy outlook. The U.S. 10-year Treasury yield moved closer to the 5 per cent mark, increasing pressure on equity valuations, particularly growth and technology stocks.

Asian markets also came under pressure on Friday. Japan’s Nikkei 225 futures declined around 3 per cent, Japan’s Topix fell 1.7 per cent, Australia’s S&P/ASX 200 declined 1 per cent and Hang Seng futures dropped 0.8 per cent. Euro Stoxx 50 futures were also down 0.3 per cent.

Crude oil remained the biggest concern for global markets, with Brent crude trading around the USD 102 per barrel mark. Both major crude benchmarks were on track to end the week above USD 100 per barrel for the first time since mid-May as escalating attacks along key shipping routes in the Middle East raised concerns over prolonged supply disruptions.

Higher crude prices are negative for India, one of the world's major oil-importing economies, as they can increase the country's import bill and inflationary pressure. Oil marketing companies could face pressure from higher input costs, while aviation companies may see an increase in fuel expenses. Paint companies could also face higher raw material costs.

On the other hand, upstream oil producers such as ONGC could benefit from higher crude prices.

The Indian rupee declined for the third consecutive session on Thursday as rising oil prices, elevated dollar demand linked to derivative maturities and corporate hedging weighed on the currency.

The rupee closed around Rs 95.44 per U.S. dollar in the previous session. Further depreciation could increase imported inflationary pressure and weigh on companies dependent on imported inputs, although exporters could benefit from a weaker domestic currency.

Gold prices remained under pressure near a one-week low as expectations of higher U.S. interest rates strengthened. Investors were also awaiting the latest U.S. consumer price inflation data.

Domestic gold was reported near Rs 1,55,200 per 10 grams, while silver was around Rs 249.90 per gram. Precious metals remained volatile as investors balanced geopolitical uncertainty against elevated U.S. bond yields.

Foreign portfolio investors remained cautious and net sold equities worth Rs 438 crore on Thursday. Domestic institutional investors provided support with net purchases of Rs 1,026 crore.

The continued buying by domestic institutions has helped cushion the impact of foreign fund outflows and limit downside pressure in the domestic market.

The Nifty 50 closed at 23,477.80, gaining 0.20 per cent in the previous session. Immediate support is placed around the 23,380–23,400 zone, while the next support is near 23,200.

On the upside, resistance is seen around 23,550–23,600. A sustained move above 23,600 could extend the recovery towards 23,800.

For the Bank Nifty, support remains around the 51,500–51,700 zone, while resistance is expected near 52,300–52,500.

India VIX fell 1.05 per cent to settle at 11.80, indicating that volatility expectations eased slightly despite continued global uncertainty.

SAIL, LIC Housing Finance, Inox Wind, Kaynes and Bandhan Bank are in the F&O ban for Friday. Securities enter the F&O ban when their market-wide position limit utilisation crosses 95 per cent.

ONGC remains in focus as higher crude oil prices could support sentiment around upstream oil producers.

Canara Bank is in focus following developments related to Canara HSBC Life Insurance. Vodafone Idea remains under watch following recent corporate developments.

Premier Energies continues to remain in focus amid developments in the renewable energy and battery storage space. ACME Solar Holdings is also likely to remain on investors’ radar as activity in the renewable energy sector continues amid policy-driven growth opportunities.

NSE IPO developments remain a market focus, with reports indicating preparations for the exchange’s IPO process and a revised valuation target. The development could improve visibility around India’s market infrastructure.

The Demat 2.0 pilot involving the RBI and SEBI, aimed at greater digitalisation and tokenisation of corporate bonds, could support market efficiency over the longer term.

Recent volatility during the Closing Auction Session has also remained a key market factor, particularly around expiry sessions, with sharp movements near the close influencing index levels.

The domestic market setup remains cautious as rising crude oil prices, a weaker rupee, foreign fund selling and weak global cues create headwinds for Indian equities. Investors will closely track crude oil movements, U.S. inflation data, bond yields and developments in West Asia for further direction.

Disclaimer: The article is for informational purposes only and not investment advice.

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