Indian equity markets slumped in Friday’s session after tension between Israel and Iran heated up. The markets started the session on a gap-down and continued the sell-off. However, not much relief, but markets recovered some lost ground before closing in the red.
The Nifty 50 closed the session 170 points or 0.68% lower at 24,718.60, the Sensex fell 573 points or 0.70% to end at 81,119.
For the week, the Nifty 50 ended 1.50% lower, while the Sensex corrected 1.66%.
The banking stocks were in line with the overall market sentiments, the Nifty Bank lost 555 points or 0.99% to end at 55,527.
The sell-off was more intense in largecap stocks compared with mid and small-cap stocks. The BSE Midcap inched down 145 points or 0.32% to 45,681. On the other hand, the BSE Smallcap remained steady, surging 161.18 points or 0.30% to 53,370.29.
“The initial reaction was largely driven by a sharp rise in crude oil prices due to geopolitical tensions in the Middle East. However, a moderation in CPI inflation helped limit the downside. On the technical front, the Nifty slipped below its short-term moving average (20 DEMA) once again but witnessed a swift rebound after testing the lower end of the recent consolidation range (24,500–25,200). This suggests a possibility of continued consolidation in the index,” said Ajit Mishra, Senior Vice President of Research at Religare Broking.
Indian equity benchmarks experienced downward pressure, driven by weak global cues and foreign institutional outflows, said Vinod Nair, Head of Research at Geojit Investments. “Market sentiment was notably impacted by heightened geopolitical tensions following Israel’s military strike on Iran, which significantly increased risk aversion among investors. Although India’s CPI for May eased below the RBI’s comfort threshold—offering a positive macro signal—this was largely overshadowed by external headwinds. Brent crude prices climbed near $76/barrel, their highest this year, raising fears of inflation if tensions persist,” said Nair.