The Indian stock markets closed lower on Friday as a weak rupee and inflation fears following a fuel price hike dampened investor sentiment. The 30-share BSE Sensex dropped 160.73 points, or 0.21%, to settle at 75,237.99, after swinging between gains and losses during the session. The benchmark had rallied nearly 470 points in early trade before losing momentum.
Market Performance
The broader NSE Nifty also ended in the red, declining by 48.50 points, or 0.21%, to close at 22,829.15. The market witnessed high volatility as investors weighed the impact of rising fuel prices on inflation and corporate earnings.
Key Factors Weighing on Sentiment
- Weak Rupee: The Indian rupee depreciated against the US dollar, crossing the 83 mark, which raised concerns about imported inflation and capital outflows.
- Fuel Price Hike: The government's decision to increase petrol and diesel prices by Rs 2 per litre added to inflationary pressures, impacting consumer spending and business margins.
- Global Cues: Mixed signals from global markets, including uncertainty over US interest rates and geopolitical tensions, also influenced domestic trading.
Sectoral Trends
Most sectoral indices ended in negative territory, with auto, banking, and oil & gas stocks leading the decline. The BSE Auto index fell 0.8%, while the BSE Bankex dropped 0.6%. However, IT stocks saw some buying interest on the back of a weaker rupee, which benefits export-oriented companies.
Among individual stocks, Reliance Industries declined 1.2% after the fuel price hike announcement, while HDFC Bank slipped 0.5%. On the other hand, TCS and Infosys gained 0.3% each.
Outlook
Analysts expect the market to remain volatile in the near term, with inflation data and corporate earnings in focus. The upcoming Reserve Bank of India policy meeting will be closely watched for any change in interest rate stance.
