Sensex & Nifty on the Ropes: Crude’s Climb Leaves OMCs Reeling

Image Source: The Financial Express

Indian equity markets closed a turbulent week deep in the red, rattled by surging crude oil prices and escalating geopolitical tensions in the Middle East. Both the Nifty 50 and Sensex ended Friday’s session lower, capping a week that saw heavy selling in large-cap stocks, especially oil marketing companies (OMCs), as Brent crude soared over 7% following Israeli airstrikes on Iran.

Key Highlights:

Sharp Weekly Decline: Nifty 50 dropped 1.5% for the week, closing at 24,719, while the Sensex shed 1.66%, ending at 81,119.
Crude Oil Shock: Brent crude prices jumped over 7% amid fears of supply disruptions after Israel’s strike on Iran, sending shockwaves through global and Indian markets.
OMCs Take a Hit: Oil marketing companies like HPCL, BPCL, and IOC plunged over 3% each, with Indraprastha Gas (IGL) down 5% and Bharat Petroleum losing up to 6% in early trade.
Sectoral Sell-off: All 13 sectoral indices ended in the red. The Nifty Oil & Gas index slipped over 1.4%, and both midcap and smallcap indices saw pressure, though smallcaps managed a slight gain.
Global Risk-Off Sentiment: The sell-off mirrored a global rout, with Wall Street’s Dow tumbling 400 points and Asian markets broadly lower. Investors flocked to safe-haven assets like gold and the Swiss franc.
Inflation Relief: A silver lining emerged as India’s CPI inflation cooled to a 75-month low of 2.82% in May, helping cushion some of the downside and prompting selective buying in heavyweight stocks late in the session.
Technical Outlook: Despite the plunge, Nifty found support near 24,500 and rebounded from intraday lows, suggesting the index may consolidate in the 24,500–25,200 range in the near term.

“The initial selloff was primarily triggered by a sharp spike in crude oil prices amid escalating geopolitical tensions in the Middle East. However, a moderation in CPI inflation helped cushion the downside and restore some investor confidence,” said Ajit Mishra, Senior Vice-President (Research) at Religare Broking.

Source: Financial Express, Business Today, Economic Times