Sensex, Nifty Fall for 4th Week as Crude Oil Surge, U.S.-Iran Tensions Weigh

Indian equity markets remained volatile and under pressure through the week, with the benchmark Nifty extending its losing streak to four consecutive weeks, as surging crude oil prices and escalating U.S.-Iran hostilities overshadowed strong domestic economic data. The Nifty ended the week at 23,897.70, gaining 0.10 per cent on Friday, but still registered a weekly decline of around 1.2 per cent. The index snapped a four-session losing streak, although it remained below key moving averages and continued to show a weak near-term technical structure. The Sensex closed the week at 76,515.43, rising 362.57 points, or 0.48 per cent, on Friday.

Despite the late-week recovery, the index declined around 1 per cent over the week and remained caught in a broader corrective and consolidation phase. The biggest pressure on Indian equities came from crude oil, with Brent crude rising more than 8 per cent during the week and WTI crude gaining over 9 per cent. Renewed U.S.-Iran hostilities and concerns over possible disruptions around the Strait of Hormuz pushed up the geopolitical risk premium in global energy markets. The rise in oil prices came despite encouraging domestic economic indicators.

India's economy grew 7.8 per cent in the first quarter of FY27, comfortably exceeding market expectations, while strong GST collections also pointed to continued momentum in economic activity. However, these positive developments failed to provide a sustained boost to equities as investors remained focused on the potential impact of higher crude prices on inflation, the current account and corporate profitability. Foreign institutional investors continued to remain a source of pressure, recording net outflows of around Rs 5,600 crore during the week.

Domestic institutional investors, however, provided strong support, with net inflows of around Rs 18,560 crore, helping absorb a significant portion of the foreign selling. On a month-to-date basis, FIIs remained net buyers of approximately Rs 2,374 crore in September, while DIIs recorded net purchases of around Rs 18,568 crore. Strong domestic institutional participation has emerged as an important stabilising factor for Indian equities, although persistent foreign selling could continue to limit the market's upside. Investors will now closely track the upcoming U.S. inflation data, which could play an important role in determining the direction of global markets.

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