Persistent tensions in West Asia and a worsening energy crisis at home dragged Indian equities to their worst weekly performance in two months. The Nifty 50 ended the week 2.2% lower at 23,643.50, while the Sensex fell 2.7% to 75,237.99. The last time headline indices posted steeper weekly losses was in the week ended 13 March, when both benchmarks had fallen a little over 5%.
Rising crude oil prices, a sharp rupee depreciation, and mounting inflation concerns pushed benchmark indices into the red this week, reversing gains from the last two sessions. Although markets initially opened on a resilient footing on Friday amid supportive global cues and a strong overnight rally in US technology stocks, persistent selling pressure across cyclical sectors eventually dragged indices into negative territory, said experts.
Sensitive slump
Real estate emerged as the top loser this week, falling nearly 8%, as rising bond yields and inflationary concerns reduced risk appetite for interest rate-sensitive sectors. Meanwhile, IT stocks rebounded sharply on Friday after recent corrections, aided by value buying, supportive global tech cues, and improving confidence in long-term enterprise artificial intelligence spending. Even so, IT remained the week’s second-worst performing sector after automobiles.
Telecommunications and metals were the top outperformers this week, despite metal stocks witnessing sharp profit booking on Friday. “Metals may be nearing a prolonged consolidation phase as higher bond yields, a stronger dollar, and elevated crude prices begin to weigh on global growth and commodity demand,” said Karan Aggarwal, co-founder and chief investment officer at Ametra PMS. “Investors should use the present rally to gradually lighten their metals exposure.”
Global sentiment was also cautious this week as rising US bond yields stalled the artificial intelligence-led rally that had powered East Asian equities in recent months. Major emerging markets including South Korea, Taiwan, and Hong Kong ended the week flat to lower, though their declines remained relatively milder than India’s.
Investors closely tracked developments around the Trump–Xi summit amid escalating tensions over Taiwan, while also waiting for clarity on the reopening of the Strait of Hormuz.
Oil overhang
Beyond the geopolitical uncertainty, domestic markets are currently reeling under worsening macroeconomic pressures as Brent crude continued to hover above the $100 per barrel mark during the week. Adding to concerns, the government raised retail petrol and diesel prices by nearly ₹3 per litre on Friday, marking the first major fuel price hike in nearly four years.
However, Mint’s analysis of Centre for Monitoring Indian Economy (CMIE) data shows domestic petroleum product consumption fell nearly 5% year-on-year in April to a four-year low, even before the latest fuel price hike. Hence, the government’s move has intensified fears that the ongoing energy shock could further fuel inflation, weaken household consumption, and squeeze corporate margins.
“April’s rally was largely built on expectations that crude oil prices would quickly cool back toward $80 per barrel,” Aggarwal said. “The market is worried that any meaningful moderation in crude prices could now take another two to three quarters and companies could face a 200–300 basis point hit to profit margins in the coming quarters.”
State-run oil marketing companies bore the brunt of such concerns, falling 3–4% on Friday, as investors feared the latest fuel price hike would only partially offset the mounting losses accumulated so far.
The pressure from elevated oil prices also continued to weigh heavily on the rupee, which weakened beyond the 96 per US dollar mark for the first time ever–further denting market sentiment.
Experts noted that markets are likely to remain highly sensitive to crude oil prices, currency movements, and geopolitical developments in West Asia next week. Investors will also closely track management commentary during the ongoing earnings season, likely rewarding earnings beats aggressively while showing little tolerance for weak guidance or valuation concerns even in fundamentally strong companies.