Top News

Mumbai: Indian equity markets ended lower on Friday as rising crude oil prices, a weakening rupee and renewed inflation concerns dampened investor sentiment, reversing part of the recent relief rally.

The benchmark BSE Sensex declined by 160.73 points, or 0.21%, to close at 75,237.99. Similarly, the NSE Nifty50 fell 46.10 points, or 0.19%, to settle at 23,643.50.

Rupee weakness and crude surge weigh on markets

Investor caution intensified after the Indian rupee slipped to a record low during the trading session. The currency weakened by 0.2% against the US dollar to 95.9650, raising concerns over rising import costs, particularly for crude oil.

India imports nearly 85% of its crude oil requirements, making it highly vulnerable to currency fluctuations. A weaker rupee increases the cost of imports, which in turn fuels inflationary pressures across sectors.

Adding to the concerns, global crude oil prices surged sharply amid geopolitical tensions in West Asia and uncertainty surrounding the Strait of Hormuz, a critical shipping route for global oil supplies.

Brent crude rose above USD 109 per barrel, gaining 3.13%, while WTI crude climbed 3.64% to USD 104.85 per barrel, intensifying fears of higher fuel costs worldwide.

Inflation worries return to focus

Market participants grew wary as inflation concerns resurfaced, driven by rising fuel prices and global uncertainties. Earlier in the day, petrol and diesel prices were increased by ₹3 per litre, further adding to worries about household expenses and overall cost of living.

Vinod Nair, Head of Research at Geojit Investments Limited, said that the recent uptick in bond yields, rupee depreciation and fuel price hikes have shifted investor focus back to inflation risks.

“Favourable valuations and a strong Q4 earnings season are cushioning the downside. However, attention has now shifted to potential fiscal and monetary measures to stabilise the rupee and manage the balance of payments,” he noted.

Nair also pointed out that global markets are facing pressure as rising bond yields have paused the artificial intelligence-led rally that had supported equities in recent months.

Sectoral performance remains mixed

Sector-wise, the market displayed a mixed trend. Information technology stocks emerged as top gainers, with the Nifty IT index rising 1.30%. FMCG stocks gained 0.54%, while pharma stocks added 0.34%, offering some support to the broader market.

Among Sensex constituents, Infosys rose 2.08%, while Tech Mahindra gained 2.04%. Power Grid Corporation of India also ended higher by 1.34%.

On the other hand, rate-sensitive and commodity-linked sectors faced selling pressure. The Nifty Metal index declined 1.93%, while Nifty PSU Bank dropped 1.80% and Nifty Realty fell 1.79%.

Among laggards, Tata Steel fell 1.97%, while Reliance Industries declined 1.87%. Mahindra & Mahindra also slipped 1.56%.

Broader markets under pressure

The weakness extended to broader markets as well. The Nifty Midcap100 index fell 0.45%, while the Nifty Smallcap100 index declined 0.61%, reflecting cautious sentiment among retail and institutional investors alike.

The decline indicates that risk appetite has moderated amid uncertainty in global and domestic economic conditions.

Outlook hinges on global developments

Market experts believe that the near-term direction of Indian equities will largely depend on geopolitical developments and global economic cues. Any progress to easing tensions in key oil-producing regions or stability in crude supply routes could influence investor sentiment.

Additionally, the outcome of high-level global engagements, including a potential meeting between former US President Donald Trump and Chinese President Xi Jinping, may provide further direction to markets.

Conclusion

The decline in benchmark indices highlights the fragile balance between domestic economic strength and external vulnerabilities. While strong corporate earnings and valuations offer some support, rising crude prices, currency weakness and inflation risks continue to pose challenges.

Going forward, the trajectory of the rupee, global oil prices and policy responses from the government and central bank will play a crucial role in determining market momentum in the coming weeks.