Domestic equity markets declined on Friday, weighed down by a sharp selloff in information technology (IT) stocks and persistently elevated crude oil prices, amid uncertainty over the reopening of the Strait of Hormuz.
The benchmark Sensex ended at 76,664, down 1,000 points or 1.3 per cent, while the Nifty closed at 23,898, lower by 275 points or 1.14 per cent. For the week, the Sensex and Nifty fell 2.3 per cent and 1.9 per cent, respectively, after gaining sharply in the previous two weeks. The market capitalisation (mcap) of BSE-listed firms declined by ₹5 trillion to ₹461.5 trillion ($4.89 trillion).
The Nifty IT index plunged 5.3 per cent — its steepest single-day fall since February 12 — and dropped 10.3 per cent for the week, marking its sharpest weekly decline since March 2020 and the second-worst in a decade.
The slide followed subdued growth forecasts from sector heavyweights Infosys and HCLTech. The sector’s mcap eroded by ₹2.5 trillion during the week.
Geopolitical tensions in West Asia also kept investors on edge. The conflict involving Iran and the US-Israel axis showed little sign of easing. During the week, Iran released footage of its commandos storming a cargo vessel, while the US maintained its naval blockade. US President Donald Trump also ordered the navy to act against vessels laying mines in the Strait of Hormuz.
Although Iran had briefly indicated it would reopen the strait for commercial traffic, it reversed its stance after the US did not ease its blockade. The Strait of Hormuz, a key global oil chokepoint handling nearly a fifth of the world’s supply, remains central to market concerns.
Brent crude rose to $101 per barrel intraday and was trading at $105.8 per barrel, up nearly 11 per cent for the week. Elevated oil prices are negative for India, given its heavy dependence on energy imports, as they widen the import bill and weigh on growth and corporate earnings.
Reflecting these risks, brokerages including HSBC and JPMorgan downgraded their outlook on Indian equities.
“Given India’s reliance on imported energy and the potential knock-on effects on inflation and domestic demand, we are concerned about the durability of the ongoing earnings recovery… India looks less attractive than its North East Asian peers in the current macro environment,” HSBC said in a note.
Market breadth remained weak, with about 3,000 stocks declining against 1,241 advancing. Foreign portfolio investors (FPIs) were net sellers worth ₹8,828 crore on Friday, while domestic institutional investors bought shares worth ₹4,701 crore. Infosys, down 7.1 per cent, was the biggest drag on the Sensex.
