Crude surge, Iran tensions drive Nifty to fourth straight loss

Markets extended their losing streak for a fourth consecutive session on Thursday as a sharp spike in crude oil prices, escalating U.S.-Iran tensions, and relentless foreign selling kept investors firmly on the back foot. The Nifty 50 slipped below the psychologically significant 24,000 mark, a threshold that traders had been watching closely, and settled at 23,869, down 0.53 per cent on the day. The Sensex fell in tandem, closing at 76,391, off 0.47 per cent.

“...crude oil prices approaching USD 100/bbl amid concerns over further disruptions to global energy supplies... investor sentiment remained subdued as markets reassessed inflation risks and corporate margins,” said Ponmudi R, CEO of Enrich Money.

The session opened with a gap-down and a brief, unconvincing recovery attempt before sustained selling through the afternoon pushed the index lower. In the final hour, the Nifty steadied near an upward-sloping trendline support but could not mount a meaningful reversal, closing near the lower end of its recent 23,800–24,400 consolidation band.

Broad-based weakness defined the day. Realty stocks were the worst performers, falling nearly 1.8 per cent, while chemicals, PSU banks, and oil and gas stocks were also among the key laggards. State-owned oil marketing companies, HPCL and BPCL, faced added heat after reporting under-recoveries in the first quarter of FY27 as higher input costs could not be fully passed on to consumers. The mid and small-cap segments fared worse than the headline index, with both the Nifty Midcap 100 and the Nifty Smallcap 100 declining around 1 per cent each, reflecting widespread selling beyond frontline names. Out of the 500 stocks in the Nifty 500 universe, 383 settled in the red. Auto and media were the sole sectoral exceptions, posting gains on the back of resilient earnings.

The trigger for much of Thursday’s anxiety was energy. Brent crude surged as much as 5 per cent during the session, briefly crossing $98 a barrel, a six-week high, after reports of the closure of the Strait of Hormuz following continued U.S.-Iran military strikes, compounded by fresh Houthi attacks on shipping in the Red Sea. Domestic crude futures advanced toward ₹8,700. The rally in oil stoked fears of broader inflationary pressure, margin stress for corporates, and a higher-for-longer global interest rate environment that tends to pull capital away from emerging markets.

The rupee reflected those pressures acutely. After staging early gains, the Indian currency reversed sharply, weighed down by surging crude import demand, foreign institutional outflows, and broad dollar strength, with the spot USDINR pair trading around ₹96.6 to the dollar. Gold, meanwhile, saw profit-booking after a sharp 4 per cent rally over the preceding three to four sessions. COMEX Gold ran into resistance near $4,150 and MCX Gold faced selling pressure around ₹1,46,000. Despite the pullback, analysts said the metal’s longer-term bias remains positive, with MCX Gold expected to trade in the ₹1,40,000–₹1,47,000 band in coming sessions.

Looking ahead, markets are unlikely to find much relief in the near term. The European Central Bank’s policy decision and commentary is due Thursday and will be closely watched. On Friday, a clutch of key earnings, including Shriram Finance, SBI Life Insurance, Bank of Baroda, SAIL, and Container Corporation, will drive stock-specific action. The U.S. Federal Reserve’s rate decision on July 29 looms as the next major macro event. “...given the mixed earnings outlook, elevated geopolitical risks, and persistent volatility, we continue to advocate a stock-specific approach while maintaining disciplined risk and position management,” said Ajit Mishra, SVP Research at Religare Broking.