Indian equity markets traded sharply lower on Friday as fresh US-Iran military action near the Strait of Hormuz revived concerns over energy supplies and weighed heavily on investor sentiment. The BSE Sensex tanked 516.33 points, or 0.66 per cent, to settle at 77,328.19, while the NSE Nifty dropped 150.50 points, or 0.62 per cent, to end at 24,176.15. During the session, the Sensex tumbled as much as 698.09 points, or 0.89 per cent, to 77,146.43, as markets remained under pressure for the second consecutive day. The decline was primarily driven by fresh spike in crude oil prices, with Brent crude moving back above the $100 mark amid renewed military exchanges between the US and Iran, dampening hopes of a near-term peace agreement. Foreign Institutional Investors (FIIs) offloaded equities worth ₹340.89 crore on Thursday, adding to the bearish trend, while the rupee depreciated 25 paise to close at 94.47 (provisional) against the US dollar. On the weekly front, the BSE benchmark climbed 414.69 points or 0.53 per cent, and the Nifty went up by 178.6 points or 0.74 per cent, showing some recovery despite Friday's decline.
The exchange of fire came a day after Iran's foreign ministry had signalled it was considering a US proposal to end the war, dashing hopes of an imminent ceasefire. US President Donald Trump maintained the ceasefire is still in place, but the conflicting claims from both sides kept markets on edge. Brent crude futures were trading 0.25 per cent lower at $99.81 per barrel in the futures market, though it had earlier risen more than 1% on Friday after the renewed hostilities threatened a shaky ceasefire and dashed hopes of a full reopening of the Strait of Hormuz. For the week, both contracts remained on track to fall around 6% despite the Friday surge, reflecting the sharp retreat seen earlier in the week when optimism around a US-Iran deal had briefly weighed on prices. Vinod Nair, Head of Research, Geojit Investments Limited, noted that while markets witnessed a risk-off session following fresh US-Iran military action, stability in crude oil prices around $100 per barrel and benign US 10-year yields continue to provide support to the broader sentiment and the rupee. Ajit Mishra, SVP, Research, Religare Broking Ltd, added that additional factors including continued weakness in the rupee and cautious institutional positioning ahead of the weekend further capped risk appetite.
Despite the broader market decline, IT and FMCG indices managed to close with modest gains, reflecting some resilience, while selective buying was seen in Healthcare, Consumer Durables, and Midcap segments, offering limited support to the market. However, banking and financial indices remained under pressure, with Nifty Bank, Financial Services, and PSU Bank declining sharply, indicating weakness in rate-sensitive stocks. Realty and oil & gas also ended in the red, adding to the downside, as sectoral sentiment remained weak with losses in financials outweighing gains in defensive and select cyclical sectors. Among the top Nifty 50 gainers, Titan jumped 4.76 per cent after the leading jewellery and watchmaker reported a 35.36 per cent increase in its consolidated net profit to ₹1,179 crore for the March quarter of FY26. Asian Paints, Adani Ports, Infosys and HCL Tech settled in the positive territory, while State Bank of India tanked 6.62 per cent after its March quarter earnings, HDFC Bank, Bajaj Finance, Axis Bank, UltraTech Cement and Mahindra & Mahindra were also among the laggards. In the broader markets, the BSE SmallCap Select index went up by 0.34 per cent, while the MidCap Select index dipped 0.01 per cent. Gaurav Garg, Lemonn Markets Desk, noted that sector-wise, the market showed a mixed trend with a negative bias, as heavy selling was seen in key segments.
Foreign portfolio investors have withdrawn nearly ₹2 trillion from domestic markets over the first four months of 2026, in favour of burgeoning artificial intelligence opportunities in the US and East-Asian markets. As reported by Stock Market News, the rupee's steady depreciation has eroded 6–8% of dollar returns over the past year, accelerating outflows. India continued to lag its global peers this week, with South Korea's KRX 100 and Kospi leading global gains with 13-16% returns, while Vietnam, Taiwan and Japan delivered 12%, 7% and 5% returns, respectively. The Nifty 50 currently stands corrected 8% from its September 2024 peak, while several global markets have surged 30–150% in the same period. However, the broader market showed resilience with small-caps and mid-caps rising 4.1% and 3.6% respectively, helped by steady earnings performance. Gaurav Garg, Lemonn Markets Desk, noted that though the road ahead is slightly bumpy, optimism around a possible diplomatic resolution persists.
The IT index climbed 0.68% to 29,242.00 as the US dollar rallied, improving rupee realisations for dollar-revenue firms, even as benchmark indices opened with losses on fresh hostilities between the US and Iran. The Nifty IT index traded at 29,031.55 at the open, rose to an intraday high of 29,311.90 early in the session and held up well thereafter, showing that buying interests in export-oriented IT counters continued to be strong amid weak market sentiment. This strength contrasted with the broader market decline, with analysts noting that going forward, the ongoing flow of March quarter results will remain the primary market driver, with management commentary on demand outlook and margin guidance guiding sentiment, though elevated crude prices will pile on macro-economic and earnings pressure going forward.
