Indian equities ended their sixth straight week of decline on Friday, extending their losing streak as crude oil prices above $100 per barrel and tighter global monetary policy weighed on sentiment. The Nifty 50 ended the week down 0.22%, continuing its six-week losing streak amid volatility. Despite a modest recovery, the index remained below the key 23,500 level as global tensions and rising crude oil prices kept investor sentiment fragile. The last six-week losing streak was recorded during the second half of last year, with the index fluctuating by more than 500 points during the week but closing with a modest decline. Compared with last week's sharp 2% crash, the decline was relatively modest, but the weakness was not limited to India, with major Asian markets such as the Kospi, Nikkei 225, and Hang Seng also witnessing wide fluctuations.
The primary driver of the week's selling pressure was a sharp surge in crude oil prices amid escalating geopolitical tensions in West Asia. Brent crude crossed the $100 per barrel mark and surged toward $109, with intensifying US-Iran hostilities raising concerns over potential supply disruptions through the Strait of Hormuz. However, WTI crude retreated to around $96 a barrel from a weekly high of $105, as expectations grew that alternative routes could help mitigate supply disruptions in West Asia. The pullback followed indications from Saudi Arabia that it could supply additional crude through Oman amid disruptions to its pipeline network. For India, the risks from elevated crude prices are particularly significant, as the country meets more than 80% of its crude oil requirements through imports. Higher crude prices could further fuel inflationary pressures at a time when Indian equities are already struggling to attract overseas investor interest.
On Friday's session, the BSE Sensex dipped 19.63 points, or 0.03%, to end at 74,294.96, erasing its early gains due to CAS. The NSE Nifty 50, however, closed 75.80 points, or 0.33%, higher at 23,346.40. The week's losses extended a prolonged corrective phase for Indian equities, with the Sensex now down 12.88% from its record close of 85,836.12 reached on September 26, 2024, and off 12.80% from its 52-week high of 85,762.01 hit on January 2, 2026. Broader markets outperformed the benchmark indices, with the Nifty Midcap and Smallcap indices rising up to 2%, while market breadth remained positive with 370 stocks advancing and 126 stocks declining from the Nifty 500 universe. The India VIX declined over 7%, indicating lower volatility compared to previous sessions.
Consumer durables were the biggest sectoral laggard, falling nearly 3%, while telecom stocks declined 2%. Among the Nifty constituents, Adani Ports, Adani Enterprises, Bharti Airtel and HDFC Bank emerged as the top gainers in Friday's session, while TCS, TMPV and Coal India were the top laggards. Majority of Tata Group stocks witnessed significant pressure during the session, including Tata Chemicals, Tata Investments and Tata Motors. In the broader market, the Nifty Midcap 100 and Smallcap 100 indices also declined, with Cochin Shipyard plunging 9.17% after management guided for lower-than-expected EBITDA margins for FY27. The India VIX climbed more than 4% during Friday's session and moved above the 12 mark, indicating increased uncertainty among market participants.
The global backdrop for equities has remained weak, as rising tensions in the Middle East have kept crude oil prices elevated. Meanwhile, major central banks, including the US Federal Reserve and the Bank of Japan, have responded to raising inflationary pressures by lifting rates. The Bank of Japan raised interest rates to a 31-year high and signalled its readiness to continue raising borrowing costs, while the US Federal Reserve announced a 25-basis-point hike and signalled further monetary tightening. Despite June-quarter earnings coming in ahead of analysts' estimates, they failed to revive investor sentiment, with investors appearing to find better opportunities elsewhere in Asian markets, supported by their greater exposure to the artificial intelligence theme. Vinod Nair, Head of Research at Geojit Investments Limited, noted that with geopolitical risk unresolved and foreign flows yet to revive meaningfully, the recovery remains contingent on further easing of external pressures. Ajit Mishra, SVP, Research at Religare Broking, said technically, the Nifty's ability to sustain above the 23,200–23,300 zone provides some near-term stability, with 23,400–23,600 emerging as the key resistance zone.
