Mumbai, May 16 (IANS): Domestic equity markets witnessed another week of sharp correction, with the Nifty declining 2.2 per cent or 532 points to close at 23,643.5 and the Sensex dropping 2.7 per cent or over 2,000 points to end at 75,238, as rising crude oil prices and ongoing geopolitical tensions in West Asia continued to weigh heavily on investor sentiment. Broader markets faced even heavier pressure, with the mid-cap index falling over 2 per cent and the small-cap index losing nearly 4 per cent during the week. Sectorally, realty stocks were the worst performers with BSE Realty plunging almost 8 per cent, followed by IT stocks with the BSE IT index falling 5.7 per cent, while auto, capital goods, consumer durables, banking, and PSU stocks also witnessed significant selling pressure with the BSE Bankex and BSE PSU indices declining 3 per cent each. From the 30-scrip basket, Titan Company was the top loser falling 7.6 per cent, followed by Reliance Industries, Tech Mahindra, and Mahindra and Mahindra. However, a few defensive sectors outperformed, with BSE Metal gaining 1.5 per cent and healthcare stocks rising 1.4 per cent.
Market experts attributed the cautious investor sentiment to the lack of meaningful de-escalation in West Asia tensions and their impact on crude oil prices, inflation, and the rupee, with Brent crude remaining elevated in the $105-110 per barrel range amid concerns over disruptions in the Strait of Hormuz. Elevated crude prices, rising global bond yields, sustained strength in the US dollar, higher wholesale inflation, fuel price pass-through, and elevated bond yields collectively increased concerns over macroeconomic stability and future monetary policy actions, leading to intermittent foreign fund outflows and currency weakness. Despite the broad-based correction, domestic institutional investors continued to provide support to the market aided by strong retail participation, with SIP inflows in April standing at Rs 31,115 crore, helping absorb sustained FII selling pressure during the week.