Nifty Extends Losing Streak to Seven Weeks as Oil, US Yields Pressure Markets
The Nifty 50 has matched its seven-week losing streak seen during the 2020 Covid crash as elevated crude oil prices, rising US Treasury yields and weak foreign investment flows weigh on Indian equities.
Indian equities remain under pressure after the Nifty 50 completed its seventh consecutive week of losses, matching a losing streak last seen during the Covid-driven market crash in 2020.
The benchmark index closed Friday at 23,140.50, declining around 0.9% during the week as elevated crude oil prices, rising US Treasury yields and persistent foreign investor outflows weighed on market sentiment.
Global bond yields have emerged as a significant challenge for equities. The yield on the 30-year US Treasury touched 5.48%, its highest level since 2004, while the 10-year Treasury yield reached 5.23%.
At the same time, the Nifty's earnings yield stood at around 5.11%, putting it below the yields available on those US government securities and potentially making risk-free US debt relatively more attractive to global investors.
HIGHLIGHT: Nifty has now fallen for seven consecutive weeks, matching the length of its losing streak during the 2020 Covid market crash.
Crude oil is another major source of pressure. Brent crude climbed to around $105 per barrel during the week, as uncertainty surrounding the US-Iran conflict continued to affect energy markets.
High crude prices are particularly important for India because the country relies heavily on imported oil. Sustained elevated prices can increase import costs, put pressure on inflation and the rupee, and affect corporate margins across several sectors.
Foreign portfolio investor activity has also remained weak, adding to pressure on domestic equities. Higher US yields can encourage global investors to move capital towards dollar-denominated fixed-income assets rather than emerging-market equities.
Despite the broader decline, Friday's trading session offered some relief. The Sensex gained 315 points to close at 73,895.74, while the Nifty rose 121 points during the session to finish at 23,140.50. The gains, however, were insufficient to prevent another weekly decline.
Market participants are now entering a holiday-shortened week with several major variables in focus, including crude oil prices, US bond yields, foreign investor flows and geopolitical developments.
Analysts cited by Business Standard have turned more cautious about the near-term outlook after seven weeks of declines, with the combination of elevated energy prices and high global interest rates narrowing the supportive factors available to Indian equities.
The coming sessions will therefore be closely watched for signs of whether domestic markets can stabilise after the prolonged decline or whether global macroeconomic pressures continue to weigh on investor sentiment.