Sensex sinks 454 points, Nifty holds 22,000 as stress test jitters hit small & midcaps

From the Sensex pack, M&M, , and were the top laggards, falling 2-5%. On the other hand, only , , , and ended with gains.

Nifty IT index declined 0.5% following a hotter-than-expected U.S. inflation reading, which fuelled worries over the Federal Reserve's future rate trajectory. IT companies earn a major share of their revenue from the U.S.

Oil marketing companies such as , and dropped between 4% and 6% after announcing reductions in petrol and diesel prices.

In the broader market, Nifty Midcap100 fell 0.46%, while Nifty Smallcap100 surged 0.39%.

locked in a 5% upper circuit after the country's payments authority granted the company a third-party application provider licence.

Meanwhile, the market capitalisation of all listed companies on BSE declined by Rs 1.48 lakh crore to Rs 378.5 lakh crore. The market breadth was skewed in the favour of the bears. About 1,802 stocks gained, 2,020 declined, and 114 remained unchanged on the BSE.

Expert Views

"Cautiousness towards mid & small caps continued to drag market sentiment, dampening the broader market. However, the moderation in global commodity prices and the upward revision of India's GDP for FY25 are poised to highlight robust domestic demand, potentially supporting a rebound once the broader market attains stability," said Vinod Nair, head of research, Geojit Financial Services.

"We anticipate continued bargain opportunities in mid- and smallcap stocks, whose valuations are underpinned by strong fundamentals," Nair said.

Rupak De, senior technical analyst at LKP Securities, said, "The Nifty has once again closed below the rising trendline, bringing market sentiment back into a state of weakness. The momentum indicator suggests bearish momentum in the near term. Immediate support is situated at the 50DMA, currently at 21,900, which is expected to provide support for the Nifty. A decisive drop below 21,900 could lead to a sharp decline in the index. On the upside, resistance is observed in the range of 22,200-22,250."

Global Markets

Global stocks were set to end the week on a tepid note, following seven weeks of gains, after hotter-than-forecast U.S. inflation knocked back bets for how soon and often the Federal Reserve will cut interest rates.

MSCI'S global equity index was down 0.2% on Friday and flat for the week, following a strong rally for most of the first quarter of the year. In Asia, Hong Kong's Hang Seng Index slid more than 2%, and South Korea's Kospi lost 1.9%.

Crude Oil

Oil prices edged lower on Friday but were on track to gain over 3% for the week, boosted by the International Energy Agency raising its 2024 oil demand forecasts and an unexpected decline in US stockpiles.

Brent crude oil futures were down 59 cents or 0.6% to $84.83 a barrel at 1020 GMT, after topping $85 a barrel for the first time since November on Thursday. U.S. West Texas Intermediate (WTI) crude was down 56 cents or 0.6% to $80.70.

Rupee Closes Weaker

The Indian rupee closed lower on Friday, tracking a fall in Asian peers, after US bond yields surged in light of data that signalled inflation in the world's largest economy could be sticky.

The rupee closed at 82.8775 against the US dollar, down from its close of 82.8175 in the previous session. The local unit notched a weekly loss of about 0.1%, its first week-on-week decline since mid-February.

(With inputs from agencies)