Market Wrap

Indian equity markets remained under pressure on Thursday, extending their decline for a third consecutive session as rising crude oil prices and escalating geopolitical tensions triggered broad-based selling. The Nifty 50 fell 0.54% to close at 22,687.65, while the Sensex declined 0.62% to 73,249.39. Both benchmarks opened with significant gaps lower and recovered partially from their intraday lows on value buying, but the rebound failed to sustain as selling pressure returned. Weakness extended to the broader market, with mid-cap and small-cap indices falling 0.9% and 1.1%, respectively.

Market sentiment deteriorated as Brent crude surged above $110 per barrel, touching around $112, amid escalating tensions in West Asia and concerns over potential supply disruptions. Higher oil prices pose a significant risk for India by increasing the import bill, putting pressure on the rupee, reigniting inflation concerns and potentially complicating the RBI's monetary policy outlook. Oil-sensitive sectors, including aviation, paints, chemicals and oil-marketing companies, remain particularly vulnerable to a prolonged increase in energy costs.

Sectoral performance was broadly negative, with Pharma and PSU Banks emerging as the only gainers in the reported sector snapshot. Overall, 13 of 16 major Indian sectors declined, highlighting the widespread nature of the selling pressure. Global markets also faced headwinds as Asian and European equities weakened, while concerns surrounding AI-related valuations and corporate earnings added to investor caution.

What's Ahead

Friday's market direction will largely depend on crude oil prices, developments in West Asia, global market cues and foreign institutional investor (FII) activity. A sustained move in Brent above $110 could intensify concerns over inflation, corporate margins and India's external balances, while any easing of geopolitical tensions or retreat in oil prices could provide relief to domestic equities.

The domestic earnings calendar will also remain in focus, with investors tracking results from Colgate-Palmolive India, Havells India, Hindustan Petroleum Corporation, Adani Energy Solutions, Adani Total Gas, Swiggy and Nippon Life India Asset Management, among other companies. Management commentary on demand, input costs and margins will be important in assessing how businesses are navigating the challenging macroeconomic environment.

Market Snapshots

Institutional Activity

Sectoral Performance

Technical Outlook

Nifty 50

The NIFTY 50 declined 77.60 points, or 0.34%, to close at 22,811.35, as selling pressure in financial and automobile stocks outweighed strong gains in IT shares. The index opened at 23,016.00 and initially climbed to an intraday high of 23,120.90 before reversing sharply to touch 22,649.90, indicating profit-booking and persistent selling at higher levels. Market breadth remained weak, with 34 stocks declining against 16 advancing, while the RSI remained below 50, signalling continued bearish momentum. Elevated crude oil prices and concerns over Middle East supply disruptions further weighed on sentiment. Immediate support is placed at 22,576 and 22,431, while resistance stands at 23,046 and 23,192. A sustained move above 23,046 could improve the near-term outlook, whereas a decisive break below 22,576 may expose the index to further downside.

BankNifty

The NIFTY BANK fell 511.20 points, or 0.92%, to close at 54,976.90, reflecting broad-based selling across banking stocks. The index opened higher at 55,707.85 but reversed course and declined to an intraday low of 54,696.45, eventually settling near the lower end of the day's range. Market breadth was distinctly negative, with 11 constituents declining against just 3 advancing, while the RSI moved towards 40, indicating increasing downward pressure. Immediate support levels are positioned at 54,505 and 54,213, while resistance is placed at 55,449 and 55,740. The index needs to reclaim 55,449 to signal improving momentum; otherwise, continued weakness below 55,000 could leave it vulnerable to further selling toward the support zone.

NIFTY FINANCIAL SERVICES

The NIFTY Financial Services index declined 295.65 points, or 1.18%, to close at 24,691.45, as widespread selling across lenders, financial services companies and non-banking financial stocks weighed on performance. Bajaj Finance, Muthoot Finance, BSE and Shriram Finance were among the major laggards, while only 3 constituents advanced against 17 declining, highlighting significant weakness across the sector. The negative breadth suggests that selling pressure remains broad-based rather than concentrated in a few stocks. Immediate support is placed at 24,439 and 24,282, while resistance levels stand at 24,944 and 25,101. A sustained recovery above 24,944 would help improve the near-term technical outlook, whereas a break below 24,439 could intensify bearish momentum.

Sensex

The BSE SENSEX slipped 143.21 points, or 0.19%, to close at 73,709.69, as losses in financial and selected heavyweight stocks offset strong buying in IT shares. HCL Technologies, Infosys, Tech Mahindra and TCS led the technology-driven gains, while Bajaj Finance, Eternal, Trent and Axis Bank weighed on the benchmark. Market breadth remained negative, with 19 stocks declining against 10 advancing and one unchanged, indicating that the headline decline understated the weakness across several constituents. Immediate support is positioned at 72,870 and 72,351, while resistance lies at 74,549 and 75,068. A sustained move above 74,549 could strengthen recovery prospects, while a break below 72,870 would increase the risk of further downside. Overall, the index remains vulnerable to volatility, with the direction of financial stocks and the sustainability of IT-sector gains likely to influence its near-term trajectory.