Geopolitical tensions drag markets lower, but Nifty ends week in green

Synopsis

Indian equities closed lower Friday, impacted by renewed US-Iran tensions, though the market secured weekly gains thanks to falling oil prices. The Nifty 50 and Sensex saw dips, with investor sentiment cautious due to geopolitical risks and potential impacts on corporate earnings from rising input costs. Sectoral performance was mixed, with banking stocks facing pressure.

Mumbai: Indian equities ended weak on Friday as renewed US-Iran hostilities amid a month-long ceasefire weighed down sentiment. Still, the market notched up gains for the week-the second in a row-fuelled by the fall in oil prices.

The NSE Nifty 50 slid 0.6%, or 150.50 points, to close at 24,176.15, while the BSE Sensex fell 0.7%, or 516.33 points, to end at 77,328.19. Both indices climbed 0.7% and 0.5%, respectively, for the week.

"The military confrontation between the US and Iran, despite talks of negotiation, kept investors on the edge," said Christy Mathai, fund manager at Quantum Mutual Fund. "There are hopes of some respite, but elevated commodities could tone down earnings expectations in the next few quarters due to higher input costs."

Agencies

ON EDGE Indices fall 0.7% but end week with gains; commodities hit to weigh on earnings

Brent crude oil futures inched 0.2% higher to $100.3 on Friday after three days of decline this week. The contracts fell 7.1% this week. Asian markets remained weak. Hong Kong fell 0.9%, while Taiwan slipped 0.8%. Japan declined 0.2%, and China remained flat. South Korea ended marginally higher.

Back home, sectoral indices remained mixed. The Nifty PSU Bank index dropped over 3%, dragged by State Bank of India, which tumbled 6.7% after the state-owned lender reported weak earnings. Bank Nifty fell 1.3%. Nifty IT index gained 1.2%.

Agencies

ON EDGE Indices fall 0.7% but end week with gains; commodities hit to weigh on earnings

The Nifty is on the cusp of a breakout but is in short supply of fresh triggers, said analysts.

"Nifty has been consolidating in a narrow 800-point band between 23,800 and 24,600 levels for the past couple of weeks," said Vipin Kumar, AVP Equity Research and PMS (Derivatives & Technical Analyst) at Globe Capital Market. "For a decisive move, the index will have to breach the 23,800 level or break out above the 24,600 level," he added.

Foreign portfolio investors sold shares worth a net ₹4,110.60 crore on Friday, while domestic institutional investors bought shares worth ₹6,748.13 crore. So far in May, foreign investors have sold shares worth ₹10,308 crore. Out of 4,406 shares, 2,020 advanced, and 2,217 declined.

The Nifty Midcap 150 index fell 0.14%, while the Nifty Smallcap 250 advanced 0.2%. Over the past week, the midcap and small-cap indices gained 3.5% and 4.2%, respectively.

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