Indian benchmark equity indices ended the week on a volatile and largely flat note on Friday as elevated global bond yields, high crude oil prices and persistent geopolitical uncertainties continued to weigh on investor sentiment.
The Nifty 50 gained a marginal 20.15 points, or 0.08 per cent, to close at 24,252, while the 30-share BSE Sensex ended at 77,540.83, up just 3.11 points, or 0.004 per cent. The subdued finish reflected a cautious approach among investors as global and domestic factors pulled the market in different directions.
Vinod Nair, Head of Research at Geojit Investments, said elevated global bond yields remained a major concern for the market.
He noted that the recent move by the US Treasury to ease pressure on bond yields had failed to provide sustained relief as rising crude prices and continuing inflation concerns continued to cloud the outlook.
“The elevated global bond yields continue to cause worry in the market. The recent US Treasury's move to ease the bond yields failed to provide lasting comfort, given surging crude prices and persistent inflation fears,” Nair said.
He also pointed to developments in the domestic bond market, noting that India's 10-year government bond yield had risen to a two-month high following hawkish minutes from the Reserve Bank of India's recent meeting. Domestic inflation risks and tighter liquidity conditions were among the factors contributing to the increase in yields.
At the same time, Nair said the domestic economy continued to show resilience. Recent services Purchasing Managers' Index (PMI) data indicated sustained economic activity despite uncertainty in global markets.
He added that strong value buying in financial heavyweights was providing some support to equities. Robust credit growth and relatively attractive valuations following the recent market correction encouraged investors to accumulate financial stocks, helping the benchmark indices remain close to the previous day's levels.
Sectorally, the trading session remained mixed, with most major indices ending in negative territory. Nifty Metal, Private Banks and Realty were among the sectors that bucked the broader trend and closed higher.
The Nifty Auto index declined 0.64 per cent, while the Nifty FMCG index fell 0.71 per cent. Nifty IT dropped 0.69 per cent, Nifty Media declined 0.37 per cent and Nifty Pharma lost 0.53 per cent. The Nifty PSU Bank index slipped 0.46 per cent, while the Healthcare index fell 0.59 per cent.
Vikram Kasat, Head Advisory at PL Capital, said the market remained largely range-bound as supportive domestic factors balanced continued uncertainty in global markets.
He said investors were likely to remain cautious in the near term, with market movements expected to be highly volatile and increasingly stock-specific. Crude oil prices, foreign fund flows, movements in the rupee and developments in international markets are likely to remain key factors influencing sentiment.
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Brent crude prices remained elevated at around USD 93 per barrel during the session, adding to concerns over inflation and corporate costs. Precious metals also strengthened, with 24-karat gold prices rising more than 1.2 per cent to Rs 1,61,240 per 10 grams. Silver gained over 1.27 per cent to Rs 2,46,321 per kg.
The Indian rupee was trading at Rs 95.72 against the US dollar. Asian markets largely ended higher. Japan's Nikkei 225 declined 0.60 per cent to 65,825, while Singapore's Straits Times gained 0.30 per cent to 5,688. Hong Kong's Hang Seng rose 1.28 per cent to 26,031, Taiwan's weighted index advanced 0.64 per cent to 45,224 and South Korea's KOSPI gained 0.87 per cent to 6,912.
With global yields and crude prices remaining elevated, investors are expected to closely track international developments, foreign fund flows and domestic economic indicators in the coming sessions.
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