Nifty, Sensex end lower this week over below-normal monsoon forecast, FII selling

MUMBAI — The Indian equity benchmarks posted notable losses during the week due to sustained FII selling and below-normal monsoon forecast, causing fears of food inflation.

Nifty lost 0.72 per cent during the week and dipped 1.50 per cent on the last trading day to reach 23,547. At close, Sensex was down 1,092 points or 1.44 percent at 74,775. It declined 0.85 per cent during the week.

Large caps remained under pressure even as the broader market demonstrated meaningful resilience as midcaps briefly touched its all-time high.

"PSU Banks led on mark-to-market treasury gains from yield compression while autos and metals benefited from crude's sharp decline. FMCG, healthcare, and consumer durables declined as defensive premiums unwound on improving risk appetite," an analyst said.

MSCI index rebalancing-related adjustments also triggered substantial institutional selling in the last trading session.

Overall, the macro backdrop is more constructive than it was a fortnight ago, but confirmation through policy clarity, monsoon normalisation, and geopolitical de-escalation is needed before large cap conviction builds into the next meaningful leg higher, market participants said.

Crude oil staged a sharp weekly decline driven by optimism around a potential US–Iran diplomatic breakthrough but IMD's below-normal monsoon forecast offset resultant gains.

The rupee firmed modestly through the week after RBI's commentary signalling that the INR remains undervalued.

Cumulative outflows by foreign institutional investors (FIIs) stood at approximately Rs 23,700 crore during the week, they said.

Broad market indices showed divergence with benchmark indices, as Nifty Midcap100 added 0.54 per cent, while Nifty Smallcap100 gained 1.02 per cent during the week.

Nifty 50 is expected to see the 24,000–24,100 region as a strong resistance zone and the 23,300–23,000 region remains a crucial support area, market participants said.