Indian equity benchmarks witnessed a sharp selloff for the fifth consecutive session on Friday, with BSE Sensex crashing 917 points, or 1.11%, to 75,540.41 while Nifty 50 declined 225.85 points, or 0.95%, to 23,643.75. According to Dalal Street Investment Journal, the indices opened gap down as oil prices stormed back above $102 a barrel amid an intensifying conflict in West Asia, rattling bond markets and reviving fears of a fresh inflation shock. Only seven of the 50 Nifty constituents were trading in the green, highlighting the intensity of the sell-off. The broader markets also extended sharp losses, with Nifty Midcap 100 falling around 604 points, or 0.97%, to 61,697 and Nifty Smallcap 100 declining nearly 265 points, or 1.40%, to 18,671.60. India VIX, which measures volatility in the market, jumped more than 4% to 14.08 amid the rise in uncertainties, with the advance-decline ratio on the NSE tilting sharply towards the bears, with only 554 gainers versus nearly 2,300 losers.
Sectoral breadth was overwhelmingly negative, with 15 of the 16 major indices trading lower. According to Dalal Street Investment Journal, Nifty Realty saw the deepest cuts, dropping 1.91%, followed by Nifty Auto at 1.71% and Nifty Metal at 1.39%. Nifty FMCG was the only index holding marginally positive, gaining 0.05% as investors sought relatively defensive businesses. Nifty Pharma and Nifty MNC were relative outperformers, though they remained lower by 0.43% and 0.64% respectively. The Nifty Bank slipped 463.35 points, or 0.82%, to 56,128.65, with all 14 constituents trading lower. Suryoday Small Finance Bank bucked the weak trend and jumped around 7% after reporting an improvement in its June quarter profit, while Cyient gained nearly 2% following growth in quarterly earnings. However, Ramco Systems plunged 10% after reporting a fall in quarterly profit, InterGlobe Aviation declined about 2.2% after posting a Q1 net loss of ₹237.6 crore, and Infosys fell around 1% after its quarterly net profit declined 8.6% sequentially to ₹7,769 crore.
Brent crude futures surged above $100 per barrel as escalating Middle East tensions revived fears of supply disruption. As reported by Dalal Street Investment Journal, the international benchmark rose above $102 a barrel, taking its weekly gain to around 14%, while West Texas Intermediate (WTI) traded near $92 a barrel. The market is worried that shipping through the Bab el-Mandeb Strait, one of the world's most important oil transit routes, could face disruptions. Dr V K Vijayakumar of Geojit Investments said that the attack on Saudi tankers by the Iran-backed Houthis in the Red Sea is the main reason for the recent sharp spike in Brent crude to about $100. Goldman Sachs warned that Brent crude could climb to $120 a barrel if disruptions to shipping through the Strait of Hormuz continue. Higher crude prices are closely monitored by Indian investors as they can influence inflation, corporate margins and the country's import bill.
Fresh concerns over US trade tariffs also weighed on investor sentiment, as market participants assessed their potential impact on global trade and export-oriented sectors. According to The Times of India, India will face a 10% tariff on exports to the US under a new tariff regime announced by the Trump administration, after qualifying for the lower rate following recent policy changes. The US imposed fresh tariffs of 10% and 12.5% on imports from 60 economies, saying the move is intended to encourage trading partners to strengthen enforcement against goods produced using forced labour. Vinod Nair, head of research at Geojit Investments Limited, said that market sentiment is likely to remain under pressure in the near term, as sustained oil prices in a higher range could begin to adversely impact key macroeconomic indicators and growth dynamics. Weakness across Asian markets reinforced the risk-off sentiment, with South Korea's KOSPI plunging 5.72%, while Japan's Nikkei 225, Shanghai's SSE Composite and Hong Kong's Hang Seng also closed lower.
For the Nifty, 23,500 is the immediate support to watch, while a recovery above 23,800 could ease short-term pressure. As reported by Dalal Street Investment Journal, investors may be better served by tracking volatility and company-specific fundamentals rather than reacting to every intraday move. A weak structure may remain in place as long as the market trades below the 23,650 level, with potential targets towards 23,500-23,550 on the downside. The weakness was not restricted to frontline stocks, with the Nifty Bank and broader indices falling sharply, indicating that investors were reducing risk rather than merely rotating between sectors.
