Indian stock markets struggled to sustain their early gains on Friday as rising crude oil prices and widespread selling dragged benchmark indices lower.
The Sensex, which had opened more than 400 points higher, dropped nearly 1,100 points from its intraday peak, while the Nifty slipped below the 22,500 level.
Around 12.02 pm, the BSE Sensex was trading at 72,651.10, down 598.29 points, or 0.82%. It had opened at 73,665.64 and reached an intraday high of 73,766.51, leaving it approximately 1,115 points below that peak.
The NSE Nifty 50 declined 248 points, or 1.09%, to 22,439.65 after touching an earlier high of 22,787.25.
The downturn coincided with a rise in international crude oil prices. Brent crude futures climbed 1.21% to $114.54 per barrel, while US West Texas Intermediate crude advanced 1.40% to $100.86. Higher oil prices are a major concern for India because the country relies heavily on imports to meet its crude oil requirements.
Sustained increases in oil prices could raise India's import expenditure, intensify inflationary pressures and put pressure on corporate profit margins.
Dr V K Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said rising crude prices continued to pose a significant challenge for the economy and stock markets. However, he highlighted several factors that could provide support to equities, including lower US bond yields, a stronger rupee and the release of funds locked up in the Jio Platforms IPO following the share allotment.
Metal, real estate and consumer stocks lead losses
Selling pressure spread across multiple sectors, with metal, real estate and consumer durable stocks recording some of the steepest declines.
The Nifty Metal index fell 3.39%, while the Nifty Realty index dropped 3.16%. The Nifty Consumer Durables index declined 3.37%, and the Nifty Chemicals index lost 2.85%.
Automobile stocks also weakened, with the Nifty Auto index falling 1.90%. The Nifty FMCG index slipped 2.09%, while the Nifty Financial Services 25/50 index declined 1.58%.
The Nifty IT index was among the few gainers, edging up 0.08%. Meanwhile, the Nifty 100 fell 1.49%, the Nifty 200 dropped 1.74% and the Nifty 500 declined 1.94%.
Losses were more pronounced among mid-cap and small-cap stocks. The Nifty Midcap 50 fell 2.68%, the Nifty Midcap 100 declined 2.75%, and the Nifty Smallcap 100 plunged 3.42%.
The India VIX, which measures expected market volatility, rose 6.97% to 16.86, reflecting increased uncertainty among investors.
Jio Platforms IPO attracts strong demand
The market downturn came despite substantial investor interest in the country's largest-ever public offering. The Rs 30,213-crore Jio Platforms IPO, backed by billionaire Mukesh Ambani, had been subscribed 6.98 times by 12.04 pm on Friday, the final day of bidding.
The retail investor portion received subscriptions of 2.08 times, while the qualified institutional buyer category was subscribed 14.60 times. The non-institutional investor segment recorded subscriptions of 9.52 times, according to figures available at the time.
The IPO is being closely monitored as an indicator of investor appetite for major listings amid concerns about valuations in global technology and artificial intelligence-related companies. Despite the strong response to the issue, broader equity markets continued to face selling pressure.
Vijayakumar said more than Rs 3 lakh crore invested in the IPO could return to the financial system once the allotment process is completed by the following Monday, potentially improving market liquidity in the coming week.
He said any subsequent recovery would probably be driven by large-cap stocks, which have demonstrated greater resilience. Meanwhile, the correction in the broader market, particularly among small-cap companies, could persist because valuations in these segments have been influenced more by liquidity than by underlying fundamentals.
For now, Indian equities are caught between opposing factors. Rising crude prices and widespread selling continue to weigh on investor confidence, while strong demand for the Jio Platforms IPO and the anticipated return of funds to the market could provide some support in the sessions ahead.
