Geopolitical tensions drag markets lower, but Nifty ends week in green

MUMBAI: Indian equities weakened on Friday as US-Iran hostilities dampened sentiment amid a month-long ceasefire. However, the market rose for the second week in a row due to a fall in oil prices.

The NSE Nifty 50 ended down 0.6% or 150.50 points at 24,176.15, while the BSE Sensex shed 0.7% or 516.33 points at 77,328.19. Both indices rose 0.7% and 0.5% respectively for the week.

“Military confrontation between the US and Iran kept investors on edge despite talks of negotiations,” said Kristi Mathai, fund manager at Quantum Mutual Fund. “There is hope for some relief, but elevated commodities due to higher input costs may dampen earnings expectations over the next few quarters.”

Brent crude oil futures rose 0.2% to $100.3 on Friday after three days of declines this week. The contract fell 7.1% this week. Asian markets remained weak. Hong Kong fell 0.9%, while Taiwan fell 0.8%. Japan fell 0.2% and China was flat. South Korea remained marginally higher.

Back home, sectoral indices were mixed. The Nifty PSU Bank Index, dragged by State Bank of India, fell over 3%, falling 6.7% after the state-owned lender reported weak earnings. Bank Nifty fell 1.3%. The Nifty IT index rose 1.2%.

Analysts said the Nifty is on the cusp of a breakout but lacks new triggers.

“The Nifty has been strengthening in a narrow 800-point band between 23,800 and 24,600 for the last two weeks,” said Vipin Kumar, AVP Equity Research and PMS (Derivatives and Technical Analyst), Globe Capital Markets. “For a decisive move, the index will have to break the 23,800 level or break above the 24,600 level,” he added.

On Friday, foreign portfolio investors sold shares worth ₹4,110.60 crore, while domestic institutional investors bought shares worth ₹6,748.13 crore. So far in May, foreign investors have sold shares worth ₹10,308 crore. Out of 4,406 shares, 2,020 advanced and 2,217 declined.

The Nifty Midcap 150 index fell 0.14%, while the Nifty Smallcap 250 gained 0.2%. In the last week, the midcap and small-cap indices have gained 3.5% and 4.2% respectively.