Indian equity markets extended their losing streak to a fifth consecutive session on Friday, dragged by a confluence of global and domestic headwinds. The BSE Sensex plunged as much as 916.96 points during the day to 75,474.43 before recovering partially to close at 76,059.77, down 331.62 points or 0.43%. The NSE Nifty fell 102.15 points, or 0.43%, to settle at 23,767.45.
According to a Business Today report, market sentiment remained on edge due to five key factors:
1. Rising Oil Prices Amid Middle East Tensions
Investors grew cautious as geopolitical tensions in the Middle East fuelled concerns over crude supply disruptions. The US military carried out its 13th consecutive night of strikes against Iran on Thursday, after Yemen's Houthi rebels claimed attacks on two Saudi oil tankers in the Red Sea, raising fears of wider shipping and energy disruption. Although Brent crude eased 3.66% to $96.98 per barrel on Friday, it had crossed the $100-a-barrel mark in the previous session, keeping inflation and growth worries alive.
Vinod Nair, head of research at Geojit Investments Limited, commented: "Market sentiment is likely to remain under pressure in the near term, as sustained oil prices in a higher range could begin to adversely impact key macroeconomic indicators and growth dynamics."
2. Renewed US Trade Tariff Concerns
Fresh US trade tariffs added another headwind. The Trump administration announced a new tariff regime imposing 10% and 12.5% tariffs on imports from 60 economies, intended to encourage enforcement against forced-labour goods. India qualified for a lower 10% rate on exports to the US following recent policy changes. Nair noted: "Washington's new tariffs on imports added another headwind for export-driven economies, with technology-heavy markets having been hit the most."
3. Foreign Institutional Investor (FII) Selling
Foreign fund outflows continued to pressure the market. According to exchange data, Foreign Institutional Investors (FIIs) sold equities worth Rs 2,999.23 crore on Thursday, extending the recent trend of overseas selling. Forex traders also cited FII outflows as a factor weighing on the rupee, alongside higher crude prices and geopolitical tensions.
4. Weak Global Market Cues
Weakness across Asian markets reinforced a risk-off sentiment. South Korea's KOSPI plunged 5.72%, while Japan's Nikkei 225, Shanghai's SSE Composite, and Hong Kong's Hang Seng also closed lower. US markets ended in the red overnight, though European markets traded higher during the day.
Ponmudi R, CEO of Enrich Money, said: "Indian equity markets extended their losing streak to a fifth consecutive session as investors remained cautious amid lingering geopolitical tensions in the Middle East and renewed concerns over US trade tariffs. Weakness across Asian markets reinforced the risk-off mood, prompting broad-based selling despite signs of easing pressure in energy markets."
5. Selling in Heavyweight Stocks
Selling pressure in heavyweight counters added to the decline. Infosys declined around 1% after trimming the upper end of its annual revenue growth guidance, while weakness in HDFC Bank also weighed on the broader market. Among Sensex constituents, Eternal, Mahindra & Mahindra, Bajaj Finance, Bharti Airtel, Asian Paints, and Infosys were among the biggest losers. HCL Tech, ITC, Axis Bank, and Tata Consultancy Services bucked the trend to end higher.
Key Market Data
| Index | Closing Level | Change (points) | Change (%) | Intraday Low |
|---|---|---|---|---|
| BSE Sensex | 76,059.77 | -331.62 | -0.43% | 75,474.43 |
| NSE Nifty | 23,767.45 | -102.15 | -0.43% | — |
| Factor | Specifics |
|---|---|
| Crude oil (Brent) | $96.98/bbl (down 3.66% on Friday, but touched $100 in prior session) |
| US tariffs on India | 10% on exports under new Trump administration regime |
| FII outflow (Thursday) | Rs 2,999.23 crore |
| Worst-hit Asian index | KOSPI -5.72% |
| Major Sensex losers | Eternal, M&M, Bajaj Finance, Bharti Airtel, Asian Paints, Infosys |
| Major Sensex gainers | HCL Tech, ITC, Axis Bank, TCS |
The sell-off underscores the vulnerability of Indian equities to external shocks. For corporate strategy teams and investors, sustained oil above $100 could widen India's trade deficit and fuel inflation, potentially prompting tighter monetary policy. The 10% US tariff adds uncertainty for export-oriented sectors like IT and pharma. With FIIs net sellers, further downside cannot be ruled out unless global headwinds abate.
Sources:
