Indian markets ended a sixth consecutive week of decline amid persistent foreign selling and global policy uncertainties, with mid-cap and defensive sectors providing some resilience.
Indian equities closed out another losing week on Friday, extending their decline to a sixth straight week as foreign investor selling and worries about a prolonged period of high interest rates kept sentiment fragile. The Nifty slipped 0.22% over the week and ended the session 0.33% higher at 23,346, while the Sensex finished nearly flat at 74,294, according to market data cited in the report.
The session offered only limited relief. Shares recovered part of earlier losses after crude oil retreated from recent highs, easing some pressure on inflation expectations and government bond yields. An analyst quoted in the report said policy decisions in the US and Japan had broadly met expectations, which helped cool the inflation premium built into sovereign yields and gave equities some support later in the week.
Even so, the broader message from central banks remained cautious. The policy guidance from major economies still pointed to a tightening bias, reinforcing the view that borrowing costs may stay elevated for longer than investors had hoped. Persistent foreign institutional investor selling also weighed on the rupee and limited the market’s ability to stage a stronger rebound.
The weakness was not evenly spread across the market. Mid-cap and small-cap shares outperformed larger companies as investors rotated towards businesses with clearer earnings visibility, stronger order books and sturdier balance sheets. Defensive sectors such as healthcare and fast-moving consumer goods also drew buying interest, while information technology remained under pressure. The Nifty IT index fell about 1% as traders worried about softer global technology spending, and consumer durables also came under pressure on fears that higher rates would curb discretionary demand.
The latest pullback fits a wider pattern seen in recent months, when Indian equities have repeatedly come under strain from foreign selling, firmer US yields, a stronger dollar and swings in crude prices. Earlier market reports from 2023 showed the same mix of pressures helping drive weaker monthly and weekly performances, with sectors such as pharmaceuticals, automobiles and broader defensives often faring better than rate-sensitive or globally exposed names. For the week ahead, investors will watch domestic credit growth, purchasing managers’ index readings, US jobless claims and comments from Federal Reserve officials for clues on growth, liquidity and the likely path of rates.
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