NEW DELHI: Indian equities continue to bleed through the festive season when buying sentiment is typically strong. The benchmark indices—BSE Sensex and NSE Nifty 50—settled in the red in all four trading sessions of this week, with the broader indices facing a much steeper decline.
On Friday, the 30-share BSE Sensex opened higher but later plunged 797.02 points, or 1.08%, to hit an intraday low of 72,452.37. It later recouped some losses to settle at 73,123.83, down 125.56 points, or 0.17%.
The 50-share NSE Nifty dropped 87.65 points, or 0.39%, to close at 22,600 after tumbling 315.65 points, or 1.39%, to a low of 22,372 on Friday. The Nifty Midcap 100 declined 2.21% and the Nifty Smallcap 100 fell 2.94%.
Investors lost over Rs 20 lakh crore this week as the market capitalisation of all BSE-listed firms came down from Rs 473.46 lakh crore to Rs 452.40 lakh crore.
The decline is primarily attributed to elevated crude oil prices amid growing tensions in West Asia. At about $116 per barrel, Brent crude oil is trading near a six-month high. For India, persistently high crude prices pose risks to imported inflation, corporate margins, and currency stability. If oil prices remain high, it could also lead to foreign fund outflows, further hurting domestic equities.
“Indian markets are currently seeing selling pressure primarily due to global factors with elevated geopolitical tensions, rising bond yields and the sharp rise in crude oil prices, which increased concerns around inflation, margins and the current account. At the same time, tighter global liquidity and higher interest rates have reduced risk off sentiment,” said Shweta Rajani, associate director, Anand Rathi Wealth Ltd.
Rajani explained that historically, the festive season that starts from the Navratri days till the end of Diwali has been favourable for equities.
The Nifty50 and Sensex have fallen by around 14% since the beginning of this year. If the bearish trend continues till December, it would be the first time in the past 10 years that Indian equities give negative returns in a calendar year.
According to Sudeep Shah, head of technical and derivatives research at SBI Securities, the sharp correction in AI- and data centre-related stocks across global exchanges has deepened market volatility.
