Daijiworld Media Network - Mumbai
Mumbai, Sep 26: Indian equity benchmarks extended their losing streak to a seventh consecutive week, pressured by elevated crude oil prices, rising US bond yields and increased foreign institutional selling.
The Nifty declined 0.88 per cent during the week but gained 0.34 per cent on the final trading session to close at 23,140. The Sensex ended Friday 315 points, or 0.43 per cent, higher at 73,895, though it declined 0.54 per cent over the week.
Markets came under heavy selling pressure during the middle of the week, with the benchmark indices falling more than 1.6 per cent on Thursday. They staged a modest recovery on Friday, supported by value buying.
Brent crude remained above $105 a barrel for most of the week, while West Texas Intermediate (WTI) crude stayed above $90 a barrel amid continuing geopolitical uncertainty and concerns over global oil supplies.
Oil prices, however, eased towards the end of the week, providing some relief to global risk sentiment. The moderation also reduced concerns over India’s import bill, inflation expectations, the rupee and corporate input costs.
Analysts said the global bond market remained another source of pressure, with the US 10-year Treasury yield moving above 5.10 per cent during the week.
Elevated US bond yields tend to tighten global financial conditions and can reduce the relative attractiveness of emerging-market assets, analysts said.
Foreign institutional selling has also intensified significantly compared with previous weeks, emerging as a major headwind for domestic equities.
Meanwhile, Iran has submitted a new seven-day proposal to the United States seeking an end to the ongoing conflict and the reopening of the strategically important Strait of Hormuz, provided Washington lifts its naval blockade, waives oil sanctions and agrees to a broader ceasefire.
Market participants are now closely watching the 23,000 level on the Nifty, which analysts identify as an immediate support zone, while the 23,200 region remains an immediate resistance level.
The movement of the rupee is also being closely monitored. Persistent dollar demand linked to elevated oil prices and continued foreign institutional outflows could keep the domestic currency under pressure, although intervention by the Reserve Bank of India has helped contain excessive volatility.