The domestic equity markets ended the week on a weak note, with key indices falling around 2% due to escalating tensions in West Asia and a sharp rise in crude oil prices. IT stocks saw heavy selling, impacting market sentiment negatively. Despite this, broader markets like BSE Midcap and BSE Smallcap indices showed more resilience, slipping just 0.6% and 0.2% week-on-week.
Foreign institutional investors (FIIs) were net sellers, disposing of equities worth Rs 1,369 crore, while domestic institutional investors (DIIs) purchased equities worth Rs 9,782 crore during the week. The IT sector witnessed a significant decline of about 10% on the BSE, attributed to concerns over weaker-than-expected management guidance for FY27 earnings, despite Infosys and TCS reporting in-line quarterly earnings.
On the other hand, sectors like FMCG displayed a positive performance, reporting double-digit volume growth, while the BFSI segment maintained steady results with stable asset quality. Analysts observed a cautious market sentiment with volatility persisting due to US-Iran tensions and disruptions in the Strait of Hormuz, leading to a range-bound market with a negative bias.
Geopolitical factors, including the US-Iran tensions and disruptions in the Strait of Hormuz, along with elevated crude oil prices, continued to impact investor confidence. While FII outflows remained a concern, strong domestic institutional inflows provided some support, indicating a growing reliance on local liquidity. Geopolitical uncertainties, such as Iran’s actions in the Strait of Hormuz and US-Iran relations, further added to market apprehensions.
