Stock markets fall for seventh straight week as investors stay worried
Sensex and Nifty extended their losing run to a seventh week on rising crude prices, higher US bond yields and continued FII selling, though DII buying limited the damage.
The stock market's seven-week losing streak shows no sign of ending, leaving investors worried about what is driving the persistent decline. Global concerns are weighing directly on Indian markets. Rising crude oil prices, an increase in US bond yields and continuous selling by Foreign Institutional Investors (FII) pushed both the Sensex and the Nifty down by as much as 0.88 per cent.
On a weekly basis, the Nifty fell 0.88 per cent. However, on the last trading day of the week it closed 0.34 per cent higher at 23,140. The Sensex also rose 315 points, or 0.43 per cent, on Friday to close at 73,895, but was down 0.54 per cent for the week overall, meaning the market saw sharp swings through the week.
Both the Sensex and the Nifty had fallen more than 1.6 per cent on Thursday, while Friday saw a modest recovery on bargain buying in select stocks. According to market experts, Brent crude stayed above 105 dollars a barrel through the week, while WTI crude also traded above 90 dollars a barrel. Oil prices were supported by ongoing geopolitical tension in West Asia and concerns over global supply. However, oil prices eased somewhat towards the end of the week, easing some pressure on the import bill, inflation, the rupee and company costs.
Meanwhile, the US bond market added to investors' worries. The US 10-year treasury yield stayed above 5.10 per cent through the week. Experts say this rise in yields shows that global financial conditions are tightening, making money invested in emerging markets less attractive. Selling by foreign investors also posed a major challenge for the market. According to exchange data, FIIs remained net sellers for the sixth straight week, selling shares worth 11,490 crore rupees this week.
In contrast, domestic institutional investors, or DIIs, continued buying and made net purchases of 16,398 crore rupees, cushioning the market's fall to some extent. So far in September, FIIs have sold shares worth a total of 18,531 crore rupees, while DIIs have made net purchases of 52,617 crore rupees. Despite this, the Nifty remains around 3.9 per cent below its level at the end of August.
The market is also watching developments in West Asia. According to reports, Iran has given the US a new seven-day proposal, seeking removal of the naval blockade, relief from oil sanctions and reopening of the Strait of Hormuz in exchange for a complete ceasefire. Investors hope that if this moves forward, the geopolitical risk premium on oil prices could ease.
Technical analysts say the 23,000 level is the immediate support zone for the Nifty, while 23,200 is the nearest resistance. The market's direction going forward will depend largely on foreign investment flows, crude oil prices and global cues. Experts say that if FII selling continues and global conditions remain difficult, volatility could persist, though continued DII buying is currently playing a key role in protecting the market from bigger losses. Next week, investors will watch Brent crude prices, progress in US-Iran talks and US second-quarter (Q2) GDP data, which could play an important role in determining the market's future direction.
