The benchmark equity indices ended the week with losses of up to 2.68%, their steepest weekly decline in four months (since the week ended March 13), weighed down by a sharp rise in crude oil prices amid escalating geopolitical tensions, concerns over the proposed 100% US tariffs on generic medicines, and continued weakness in the rupee against the US dollar.
On Friday, the Sensex and Nifty extended their losing streak to the fifth session, declining 331.62 points (0.43%) and 102.15 points (0.43%), respectively. For the week, the Sensex plunged 2,091.68 points, or 2.68%, to close at 76,055.77, while the Nifty fell 566.85 points, or 2.33%, to end at 23,767.45.
Indian benchmark indices were the third-worst performers in Asia during the week, after Vietnam (down 5.51%) and Japan (down 3.89%). The broader BSE Midcap and BSE Smallcap indices declined 1.42% and 1.30%, respectively, extending their losses for the second consecutive week.
Macro Headwinds
“Investor sentiment weakened as the escalation in the West Asia conflict pushed Brent crude above the $100 per barrel mark, reviving inflation and rate-hike concerns. The return of US tariff-related uncertainties and softer July PMI data further weighed on the outlook, leading to broad-based selling, with large-cap stocks underperforming,” said Vinod Nair, head of research, Geojit Investments.
Looking ahead, market direction is likely to remain closely tied to movements in crude oil prices and evolving global monetary policy expectations, Nair added.
Investor sentiment remained subdued as Brent crude prices surged above $100 per barrel following a fresh escalation in the Middle East, reviving concerns over inflation and its impact on the domestic economy, said Ajit Mishra, SVP – research, Religare Broking.
“Renewed selling by foreign institutional investors and the depreciating local currency remain key concerns for investors,” said Ankur Punj, MD and business head at Equirus Wealth.
During the week, investors’ wealth eroded by Rs 5.23 lakh crore, with the BSE’s total market capitalisation falling to Rs 475.69 lakh crore. Foreign portfolio investors sold shares worth about Rs 6,500 crore during the last two trading sessions, offsetting inflows of Rs 5,871 crore recorded during the previous three sessions. As a result, FPIs ended the week as net sellers, with outflows of Rs 628.5 crore.
Sectoral Breakdown
Barring auto and FMCG, all sectoral indices ended the week in the red. Private banks were the worst performers, falling 4.32%, followed by realty, financial services, oil & gas and IT.
HDFC Bank, Axis Bank, Infosys, InterGlobe Aviation (IndiGo) and Bajaj Finance were the top Sensex losers, declining by up to 9.40%. In contrast, HCLTech, Trent, Power Grid, NTPC and ITC were major gainers, rising by up to 5.55%.
