Indian equities fell for a fifth straight session as Brent crude surged past $100, adding to inflation fears and weakening the rupee. The Fed's July 28-29 meeting is the next catalyst.
Indian benchmark equity indices fell for a fifth straight session on Friday. The BSE Sensex closed 331 points lower at 76,059 and the Nifty 50 slipped 102 points to 23,767. Of the 4,385 stocks traded on the BSE, 2,144 advanced and 2,032 declined.
The sell-off deepened. Brent crude surged past $100 a barrel for the first time in two months, spurred by US air strikes on Iran and a Houthi attack on a Saudi tanker in the Red Sea. The Strait of Hormuz, through which roughly 14-15 million barrels of oil and refined products flow daily, remains effectively closed, traders said.
Crude's 40% jump in July alone has revived inflation fears and strengthened the case for higher interest rates. Markets now assign roughly a one-in-three probability of an immediate rate increase at the Federal Reserve's July 28-29 meeting, up from near zero a month ago, according to pricing in overnight index swaps. The US 10-year Treasury yield touched 4.70%, an 18-month high, pressuring risk assets globally.
The rupee opened under pressure near 96.85 per dollar and came within striking distance of its record low of 96.96 set in May, traders said. The Reserve Bank of India intervened in the spot market through sell-buy swaps, absorbing rupee liquidity without permanently draining reserves, two dealers said. The currency recovered 18 paise to close at 96.55.
Auto and metal shares led the declines on the Nifty. Cipla rose 3.7% despite a 39% drop in first-quarter profit. Brokerages said the earnings miss was largely priced in and the US pipeline remains on track. Infosys fell 2.6% after the company cut its organic revenue guidance by about 1.7%. The firm blamed macro uncertainty and AI deflation. Swiggy dropped 6% after the board capped foreign ownership at 49.5%.
The benchmark 6.94% 2036 bond yield rose to 6.84% on Thursday, its highest in a month, ahead of a ₹28,000 crore government bond auction later Friday. The Centre will sell ₹17,000 crore of a new 15-year paper.
Asian markets sank in sympathy. Japan's Nikkei lost 2.9% and South Korea's KOSPI dropped 3.7%. MSCI's broadest index of Asia-Pacific shares ex-Japan fell 1%. European and US equity futures were mixed, with Nasdaq futures edging up 0.1% after Intel's earnings.
Among individual stock movers, Hindalco announced a $10 billion investment plan for aluminium and copper expansion. Adani Enterprises denied reports it plans to enter the airline business. Sun Pharma's bid for Organon received shareholder approval. Welspun Corp posted a 199% surge in consolidated profit.
Gold eased 0.1% to $4,042 an ounce after a 2% drop on Thursday. The oil-driven inflation narrative weighed on the metal. Bitcoin traded near $65,100, down 1% on the day. US spot Bitcoin ETFs recorded $999 million in inflows over seven sessions through July 22. That momentum stalled on July 23 with a preliminary $22.6 million outflow.
The oil price spike is reshaping the macro outlook for the second half of the year, one Mumbai-based fund manager said. The RBI has tools to manage the rupee, the manager said. The real variable is whether the conflict escalates further, he added. The Federal Reserve's policy meeting on July 28-29 is the next major catalyst for risk assets, traders said.
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