Stocks, rupee become casualty of war amid weak sentiment

India's stock market experienced a significant downturn on Friday, marking its largest weekly decline in over a year, driven by escalating geopolitical tensions in West Asia and rising oil prices. The NSE Nifty closed at 24,450.45, down 315.45 points (1.3%), while the BSE Sensex fell by 1,097 points (1.4%) to finish at 78,918.90, reflecting a 2.9% drop for the week—the steepest since February 2025. Concurrently, the Indian rupee weakened against the US dollar, closing at 91.74 after hitting a record low of 92.30 earlier in the week. Analysts noted that the ongoing conflict has led to heightened market volatility, with the Volatility Index (VIX) rising by 11.3% to 19.9. Institutional investors are showing caution, with foreign portfolio investors selling shares worth Rs 6,030.4 crore on Friday alone. Although domestic investors added some support, the overall sentiment remains bearish. The Reserve Bank of India intervened in the currency market, reportedly selling around $12 billion to stabilize the rupee. Experts suggest that without a ceasefire in the Gulf conflict, further market pressures are likely, and the trend does not indicate an imminent recovery.