Industry Odisha Bureau, Sep11: Indian equities fell for a fifth straight week as crude oil surged above $100. Rising US Treasury yields and renewed foreign selling added further pressure.
Indian equities extended their losing streak on Friday. The Sensex fell 2.3% for the week. The Nifty 50 declined 2.1% over the same period. Both marked their steepest weekly falls since July 24. Crude oil and US Treasury yields drove the pressure.
Crude Oil Becomes India’s Biggest External Risk
Brent crude exceeded $108 during Asian trading, nearing $110. Escalating US-Iran tensions contributed to the rally. Attacks on Saudi energy infrastructure added further pressure. India imports substantial energy, making it exposed to such swings. Higher crude raises import costs and stokes inflation concerns. It also increases pressure on India’s current account.
Treasury Yields Approach 5%
The 10-year US Treasury yield climbed to roughly 4.95-4.97%. That marked its highest level since October 2023. Higher yields make dollar assets more attractive globally. This can pull capital away from emerging markets like India. Tighter global financial conditions often follow such moves.
Fed Rate Expectations Shift
Markets are now pricing a roughly 71% chance of a Fed hike. That compares with about 61% before the producer price index print. The Federal Reserve’s next meeting falls on September 16. This reflects market expectations, not a confirmed Fed decision.
Foreign Investors Resume Selling India
Foreign portfolio investors sold ₹13,138 crore in September so far. That reverses inflows recorded during July and August. Elevated US yields and a firmer dollar are contributing factors. Expensive crude compounds this classic emerging-market risk-off pattern, analysts said.
Realty And IT Lead Sector Weakness
BSE Realty fell 6.4% during the week, the sharpest sectoral decline. Real estate is highly sensitive to rising global yields and financing costs. BSE IT dropped 5.3% amid concerns over AI-driven disruption. Analysts noted AI could pressure effort-based billing models over time. However, this represents one factor among several affecting the sector.
Global Markets Remain Uneven
Not every market moved in tandem this week. South Korea’s Kospi gained 3.3%, leading global benchmarks. Brazil’s Ibovespa rose 1.7% over the same period. Hong Kong’s Hang Seng fell 3.1%, among the weakest performers. Indian equities ranked as the second-worst major market.
Closing
India’s near-term market direction hinges on three interconnected forces. Crude oil prices remain a key inflation and current-account risk. US Treasury yields continue shaping global capital allocation decisions. Foreign portfolio flows will likely track both variables closely. Upcoming Fed and Bank of Japan decisions could further influence sentiment in the weeks ahead.
