Indian benchmark indices witnessed significant losses on Friday, with the BSE Sensex closing 160.73 points lower at 75,237.99 and the NSE Nifty 50 dropping 46.10 points to settle at 23,643.50. According to The Economic Times, the Nifty broke below its 23,800-24,500 consolidation range, signalling near-term weakness with resistance now seen at 23,800-23,850 and key support at 23,500-23,450. The indices ended their two-session gaining streak as investors booked profits amid weak global market sentiment, a sharp rise in crude oil prices, and the rupee slipping to a fresh record low against the US dollar. The GIFT Nifty was trading at 23,662 with 67 points lower, while the BSE 150 Midcap index declined 0.4% and the BSE 250 SmallCap index fell 0.3%. The volatility gauge India VIX ended at 18.79, up 0.95% from the previous close, reflecting increased market uncertainty. As per SBI Securities, the Nifty formed a small-bodied candle with a noticeable upper wick, indicating selling pressure at higher levels, and continues to trade below its key moving averages, reflecting underlying weakness.
Foreign investors continued their selling spree in Indian equities, withdrawing ₹27,048 crore so far this month, indicating cautiousness among global investors amid an evolving global macroeconomic and geopolitical environment. According to data with the NSDL, total outflows by Foreign Portfolio Investors (FPIs) from the equity market have reached ₹2.2 lakh crore in 2026, higher than the ₹1.66 lakh crore pulled out during the entire 2025. FPIs were net sellers in all months of 2026, except February, when they invested ₹22,615 crore, the highest monthly inflow in 17 months. However, the trend reversed in March with record outflows of ₹1.17 lakh crore, followed by continued selling in April with net outflows of ₹60,847 crore and extending into May with withdrawals of over ₹27,000 crore. Himanshu Srivastava from Morningstar Investment Research India attributed the outflow trend to persistent uncertainty surrounding global growth, elevated geopolitical tensions across key regions and volatility in crude oil prices, which continued to weigh on risk appetite towards emerging markets, including India.
According to Business Standard, UTI AMC's Ajay Tyagi expects mid- and small-cap stocks to underperform large caps as valuations stay elevated and earnings growth remains uncertain. Markets are pricing in the view that the worst of the West Asia conflict is behind us, but any resolution could push crude prices back into double digits, though they are expected to remain well above pre-conflict levels for the rest of the year. A large part of this risk has already been discounted, as earnings estimates for 2026-27 (FY27) growth have been cut from around 17 per cent before the war to nearly 12 per cent currently. However, what current market levels are not adequately discounting is the possibility of a prolonged conflict, with prices remaining higher for longer and supply disruptions impacting normal business operations. The mid and smallcap space has seen a sharper bounce back vis-a-vis largecap stocks in recent weeks, but looking at current valuations, it is unlikely that mid and smallcaps will outperform largecaps over the next year, as both segments continue to trade at a significant premium to their long-term average valuations.
On the sectoral front, Nifty Media emerged as the top gainer, followed by Nifty IT, while Nifty Metal and Nifty Oil & Gas ended the session in the red. Among individual stocks, Tata Motors Passenger Vehicles and Dr Reddy's Laboratories were the top gainers, while Hindalco Industries and Eternal ended lower. According to The Economic Times, most active stocks by turnover included Nazara Technologies (₹563 crore), Reliance Industries (₹293 crore), Kaynes Technologies (₹261 crore), Bharti Airtel (₹255 crore), and Adani Enterprises (₹278 crore). Most active stocks by volume were Vodafone Idea (4.97 crore shares), JP Power (1.6 crore shares), YES Bank (95.02 lakh shares), Axis Bank (80.98 lakh shares), and Suzlon Energy (65.50 lakh shares). As many as 109 stocks hit their 52-week highs, while 47 stocks slipped to their 22-week lows, with notable highs including Adani Enterprises, Adani Green Energy, Biocon, Carborundum Universal, Clean Max Enviro Energy Solutions, Honasa Consumer, Laurus Labs, and MCX. Welspun Living, Tata Motors, Atlantaa, Shadowfax Technologies, Nazara Technologies, Wakefit Innovations, and Sakar Healthcare were among the stocks that witnessed strong buying interest from market participants.
Bank Nifty faced significant resistance despite initial strength, ending 0.77% lower at 53,710 after moving higher during the session but facing stiff resistance around the 54,320–54,325 zone on two occasions. According to SBI Securities, the immediate support for Bank Nifty is placed in the 53300-53200 zone, with any sustainable move below this zone potentially extending weakness towards 52800, followed by 52400 in the short term. On the upside, the immediate resistance for the Index is placed in the 54100-54200 zone. Market sentiment was significantly weighed down by the Centre's decision to raise petrol and diesel prices by ₹3 across the four metro cities, marking the first fuel price increase in four years. As per latest reports, this move comes amid elevated global crude oil prices and has revived concerns over inflationary pressures and consumer spending. The fuel price hike added to existing inflation concerns that had previously reached a 42-month high of 8.3%, contributing to the negative sentiment in equity markets and adding to the rupee's depreciation. Brent crude has climbed to USD 109 per barrel level, with markets remaining extremely sensitive to any developments linked to the Strait of Hormuz, given its critical importance to global energy supply chains.
