Indian equity benchmarks faced a significant decline of almost 6% over the week, attributed to ongoing geopolitical tensions in West Asia. The Nifty fell by 5.31% during the week, closing at 23,151, while the Sensex dropped by 1,470 points to 74,563, marking a 1.93% decrease. The market saw a 5.52% rise earlier in the week.
The market correction was primarily influenced by surging crude oil prices and growing macroeconomic worries for energy-importing nations like India. The Nifty Auto index experienced a sharp decline of approximately 10-11%, its worst performance since March 2020, with all stocks in the index witnessing significant selling pressure.
Concerns over LNG and LPG shortages have raised fears of production disruptions, potentially impacting consumer demand patterns, particularly in urban areas where CNG vehicles are popular. Sectors such as banking, metal, and auto stocks were major contributors to the market downturn on the final trading day.
The market slump led to a substantial loss of around Rs 9.5 lakh crore in investor wealth within a single session. Broader indices mirrored the benchmark indices’ performance, with the Nifty Midcap100 falling by 4.59% and the Nifty Smallcap100 dipping by 3.66% during the week.
The surge in crude prices not only poses inflation risks but also contributes to currency depreciation, with the Indian rupee facing pressure, further impacting investor confidence. The rupee hit a fresh record low of 92.45 against the US dollar for the second consecutive week.
Analysts highlighted that Nifty’s immediate support level is at 23,000, with resistance levels at 23,300 and 23,500. For Bank Nifty, the immediate support is at 53,500, followed by 53,000, while resistance levels are at 54,000 and 54,300.
India VIX surpassed the 22 level, indicating heightened market fear and expectations of increased price volatility in the short term.
