Markets end lower as crude stays high, rupee hits record low

Markets closed lower on Thursday as high crude prices and a weak rupee weighed on sentiment. The slide highlighted persistent inflation and capital flow concerns, even as IT and pharma offered limited support.

In Short

• Rupee hit record low of 95.33, closed at 94.91, adding inflation fears
• Selling seen in metals, banks, realty; IT and pharma saw selective buying
• India VIX rose 5.86%, signalling higher market volatility ahead

Stock markets ended lower on Thursday, as elevated crude oil prices and a weakening rupee kept investors cautious, even as selective buying in IT and pharma stocks limited the fall.

The BSE Sensex declined 582.86 points, or 0.75%, to close at 76,913.50, while the Nifty 50 fell 180.10 points, or 0.74%, to end just below the 24,000 mark at 23,997.55.

OIL, RUPEE PRESSURE DOMINATE SENTIMENT

Market sentiment remained under pressure through the day as crude oil prices stayed elevated. Brent crude was around $116.08 per barrel, while WTI crude was at $106.61.

At the same time, the Indian rupee hit a record low of 95.33 during the session before recovering slightly to close at 94.91. The currency weakness added to concerns over inflation and capital outflows.

Vinod Nair, Head of Research, Geojit Investments Limited, said global and domestic factors combined to weigh on markets.

“Global sentiment deteriorated sharply as US–Iran tensions escalated and major maritime shipping routes faced continued disruption,” he said.

“Brent crude crossed the $120 per barrel mark for the first time in four years, intensifying inflation concerns and pressuring global risk assets.”

He added that rising oil prices are a key risk for India.

“In India, rising oil prices weighed on the INR and revived worries about capital outflows and widening deficits, given the economy’s heavy reliance on crude imports,” he said.

Nair also pointed to global monetary conditions as another headwind.

“The Fed kept rates unchanged but maintained a firm policy stance, supporting the dollar and tightening conditions for emerging markets,” he said.

This has made global capital flows more uncertain for markets like India.

BROAD-BASED SELLING ACROSS SECTORS

Selling was seen across most sectors.

Nifty Metal fell 2.12%, PSU Bank declined 1.68%, and Realty slipped 1.50%. FMCG was down 1.35%, while Financial Services fell 1.07%.

Consumer Durables dropped 1.57%, Private Bank index declined 0.88%, and Auto index fell 0.64%. Oil & Gas index also slipped 0.63%.

IT was the only sector to end in the green, rising 0.37%, while pharma stocks also saw selective buying.

“Autos, banks, metals, and real estate led the decline, while IT and pharma saw selective defensive buying,” Nair said.

BROADER MARKETS AND VOLATILITY

The broader market remained weak, with Nifty Midcap 100 falling 0.98% and Nifty Smallcap 100 declining 0.48%.

India VIX rose 5.86% to 18.46, indicating increased volatility and cautious sentiment.

Markets did attempt a mild recovery in the latter half of the session, but gains were not sustained.

“A mild recovery toward the end of the session offered limited respite, and overall sentiment remained cautious ahead of the extended holiday weekend,” Nair said.

SENSEX STOCKS: GAINERS AND LOSERS

Among Sensex stocks, Sun Pharma rose 1.64%, Infosys gained 1.20%, Bajaj Finance added 0.98%, Adani Ports rose 0.98%, and Tech Mahindra gained 0.95%.

Eternal fell 2.85%, Hindustan Unilever dropped 2.70%, Tata Steel declined 2.13%, Larsen & Toubro slipped 2.03%, and UltraTech Cement fell 1.92%.

M&M lost 1.83%, Trent fell 1.74%, SBI declined 1.69%, and Axis Bank dropped 1.60%.

Markets had seen a recovery in April after a sharp correction in March, but Thursday’s fall shows that sentiment remains fragile.

With crude oil prices still elevated and the rupee under pressure, markets are likely to remain volatile in the near term

(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)

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