The benchmark stock indices declined on Friday as a combination of rising crude oil prices, a record low rupee, and renewed inflation concerns kept investors on high alert. The BSE Sensex fell by 160.73 points, reflecting a decrease of 0.21%, closing at 75,237.99. Meanwhile, the NSE Nifty50 experienced a decline of 46.10 points, or 0.19%, settling at 23,643.50.
Market analysts noted that the cautious sentiment among investors followed a recent rally. Rising bond yields and the weakening rupee resurfaced inflation worries, prompting a re-evaluation of market positions. Vinod Nair, Head of Research at Geojit Investments Limited, expressed that while recent earnings reports provided some cushion, the focus has shifted towards potential fiscal and monetary responses to support the rupee and maintain balance in payments.
Brent Crude Oil Prices Influence Market Sentiment
Investor sentiment was further dampened by a surge in Brent crude prices, which exceeded $109 per barrel. This increase was attributed to ongoing tensions in West Asia and uncertainties surrounding the Strait of Hormuz, a crucial global oil shipping corridor. The WTI crude was also reported at $104.85 per barrel, marking an increase of 3.64%, while Brent crude rose by 3.13% to $109.03.
The depreciation of the Indian rupee added to market apprehensions. During the trading session, the rupee weakened by 0.2% against the US dollar, hitting a record low of 95.9650. A weaker currency significantly escalates the cost of crude oil imports for India, which relies on imported oil for approximately 85% of its needs. This situation elevates concerns regarding inflationary pressures in the country.
Additionally, petrol and diesel prices were raised by Rs 3 per litre earlier that day, intensifying fears about inflation and the impact on household expenses. These price increases serve to amplify investor caution in a fluctuating market landscape.
