MUMBAI: Rising crude oil prices and a weakening rupee weighed on investor sentiment on Friday and led to strong volatility in the market. But at close, the two leading indices—sensex and Nifty—were only marginally lower. Midcap and smallcap stocks, however, witnessed heavy selling and closed deep in the red.During the day’s session, sensex fluctuated by more than 1,300 points but closed just 126 points down at 73,124 points. Nifty on NSE also witnessed strong volatility and closed 88 points lower at 22,600 points, mainly because of foreign fund buying in the latter half of the session, market players said. Outside of the main indices, BSE’s midcap index closed 2.2% lower while the smallcap index closed 2.5%.The day’s slide came despite Rs 888-crore net buying by foreign funds and another Rs 3,235-crore net buying by domestic institutions, BSE data showed. Early on Friday, Brent crude had hit a nearly six-month high at $114 per barrel. As a result, the rupee also weakened and inched closer to the 95-to-a-dollar mark again and closed at 94.93.According to Vinod Nair, head of research, Geojit Investments, the key concern in Friday’s market was the disproportionately sharp correction in mid and smallcap stocks relative to the leading indices. “Valuation concerns and unwinding of leveraged positions, combined with surging crude prices and weak global cues, have intensified pressure on the broader market. The rise in India VIX also indicates that near-term volatility will persist,” Nair said.“Continued tensions (in West Asia) could keep crude prices high, while the AI-led global equity sell-off continues to weigh on risk appetite.”
