Indian stock markets declined for a sixth straight week amid concerns over crude prices, inflation, foreign outflows, and geopolitical tensions, with domestic investors providing some resilience despite persistent global uncertainties.
Indian equities ended another bruising week on a defensive note as worries over crude, inflation, foreign selling and tighter global monetary conditions kept buyers cautious. The Sensex and Nifty each slipped more than 0.5% for the week ended, closing at 74,295 and 23,346 respectively, and marking a sixth straight weekly decline. Reuters-style market commentary in the lead report said the mood remained more subdued than panicked, with domestic institutions helping to blunt the damage rather than drive a meaningful rebound.
The broader tone was shaped by persistent overseas outflows. Foreign institutional investors were net sellers for a fifth consecutive week, trimming their holdings by Rs7,620 crore, while domestic institutional investors bought Rs11,232 crore and extended a supportively biased streak that helped the market recover from intraday lows. In September so far, overseas investors have sold about Rs7,041 crore, while domestic funds have put in roughly Rs36,219 crore, underlining the current split between foreign caution and local confidence.
Geopolitical risk added to the pressure after the US Congress passed the Lindsey O’Graham Sanctioning Russia and Iran Act of 2026, which gives the US president scope to impose tariffs of up to 100% on countries buying Russian energy. The measure does not automatically hit Indian goods, but it leaves India exposed because of its continued imports of Russian crude. At the same time, India’s external position has improved sharply: foreign exchange reserves climbed to a record $785.7 billion, and net US Treasury purchases by India rose to a record $15.2 billion in July, which points to stronger reserve cover and some protection against rupee swings.
Global monetary policy also remained in focus. After the US Federal Reserve’s latest rate increase, the Bank of Japan lifted rates by 25 basis points to 1.25%, a 31-year high, while the Bank of England kept policy unchanged at 3.75% but signalled a hawkish bias if energy-led inflation persists. On the domestic growth side, Moody’s Ratings has been more constructive, raising India’s growth outlook for the current financial year to 7%. In earlier analysis, the agency also lifted its 2024 forecast to 7.2%, citing firmer private consumption, easing inflation and improving rural demand. For now, market participants are watching Brent crude, US-Iran tensions and forthcoming purchasing managers’ index data for the next cue, while the broader view remains one of volatility without outright fear.
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