Sensex drops 450 pts, Nifty below 24,600 as crude prices surge

Markets end lower as oil worries persist

Indian equity benchmarks finished Friday's session in the red, with the BSE Sensex tumbling over 450 points and the Nifty50 closing below the 24,600 level. The sell-off was driven largely by a sustained rise in global crude oil prices, which renewed fears of higher inflation and its impact on corporate margins.

The Sensex, which opened on a weak note, extended losses through the day as investors trimmed positions across banking, auto, and energy stocks. The Nifty50, too, struggled to hold key support levels, ending the week on a sombre note.

Crude's ripple effect

Brent crude prices have been climbing steadily, and Friday's surge added to the pressure on import-dependent economies like India. A costlier crude bill widens the current account deficit and stokes domestic inflation, making it harder for the Reserve Bank of India to consider rate cuts anytime soon.

Market participants said the rise in oil prices overshadowed otherwise positive cues from domestic macroeconomic data. The rupee also came under mild pressure, though intervention by the central bank is believed to have capped sharp moves.

What dragged the indices

Banking and financial stocks were among the top losers, with heavyweights like HDFC Bank and ICICI Bank contributing significantly to the Sensex's decline. Auto stocks also faced selling pressure on concerns that higher fuel prices could dampen demand in the near term.

Energy stocks presented a mixed picture. While upstream companies like ONGC gained on the back of higher crude realisations, refiners and oil marketing companies bore the brunt of rising input costs.

Broader indices, including the BSE Midcap and Smallcap, also ended in negative territory, reflecting weak investor sentiment across the board.

Global cues weigh

Asian markets closed mostly lower on Friday, tracking overnight losses on Wall Street. US futures pointed to a muted open, with investors worried that sustained high oil prices could force central banks, especially the US Federal Reserve, to keep interest rates elevated for longer.

Foreign institutional investors were net sellers in the cash market, while domestic institutions provided some support, though not enough to offset the selling pressure.

What to watch next

With crude oil prices remaining the key overhang, market participants will closely monitor global supply developments and any signals from OPEC+ regarding output changes. Domestic cues, including industrial production data and quarterly earnings from major companies, will also guide sentiment in the coming sessions.

Technically, the Nifty has slipped below its immediate support, and traders expect volatility to remain high until the geopolitical situation and oil prices show signs of stabilising.