Indian equity markets reversed their recent upward momentum on Friday. Heavy selling in banking, financial services, real estate and metal shares pushed both benchmark indices into negative territory.
Market participants adopted a cautious approach as concerns over persistent price pressures raised questions about the economic outlook and borrowing costs.
The Sensex declined 318.56 points, representing a 0.39 per cent drop, to finish at 81,592.45. Similarly, the Nifty slipped 155.05 points, or 0.61 per cent, to end the session at 25,144.30.
Shriram Finance, Tata Motors Passenger Vehicles and Grasim Industries recorded the sharpest losses among Nifty constituents.
Selling pressure also affected mid-cap and small-cap shares. The Nifty MidCap 100 lost 0.24 per cent, while the Nifty SmallCap 100 declined 0.26 per cent.
Most sectoral indices finished in negative territory during Friday’s trading session. Realty, automobile and cement stocks registered the biggest declines.
However, media shares experienced comparatively limited selling pressure. The Nifty Media index recorded the smallest decline among the major sectoral indices.
Inflation Fuels Concerns Over Further Monetary Tightening
Market analysts warned that rising inflation could prolong the restrictive interest rate environment. They said expectations of additional monetary tightening could put the recent market recovery to the test.
Experts identified international crude prices, currency movements and overseas investor activity as important factors shaping the market’s next direction.
These indicators could determine whether the latest decline represents temporary consolidation or signals a broader earnings-related correction.
Analysts said elevated inflation could increase economic pressures, although a potential December rate hike could strengthen the rupee by widening India’s interest rate advantage over the US.
Foreign investment inflows exceeding ₹7,800 crore on Thursday offered some support to the domestic currency. However, movements in Brent crude prices remain crucial to its near-term performance.
Experts advised investors to adopt a selective approach. They said banking, capital goods and consumer-focused companies must demonstrate strong earnings performance to attract fresh investments.
Also Read: RBI Likely To Raise Repo Rate By 25 BPS In December; Not 50 BPS: SBI Research
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