Indian shares end week lower as higher crude tempers risk appetite

India’s equity benchmarks retreated this week after two consecutive weekly gains, as lingering uncertainty in the Middle East and elevated crude oil prices tempered risk appetite for stocks in the world’s third-largest crude importer.

The Nifty 50 fell 0.8% this week to 24,366 and the BSE Sensex lost 0.6% to 78,009.25. On Friday, they ended little changed.

The week saw Brent crude prices rise 4.6% to $87 per barrel due to a lack of progress in peace talks between the U.S. and Iran to end a months-long war in the Middle East.

The U.S. on Thursday said that it could maintain a naval blockade of Iran indefinitely and would ratchet up economic pressure on Tehran as ceasefire talks have floundered, global oil supply is dropping, and regional tensions are rising.

“As long as the macroeconomic concerns arising from higher crude oil prices persist, we are unlikely to see a unidirectional move in the market,” said Pankaj Pandey, head of retail research at ICICI Securities.

The week also marked the end of the quarterly earnings season, which has largely been ahead of expectations, according to analysts.

Fifteen of the 16 major sectors fell in India this week, with broader mid-caps rising 0.5% and small-caps dropping 0.7%.

Heavyweight financials lost 1%, while metals led the losers among major sectors with a 1.9% drop.

Oil-to-telecom conglomerate Reliance Industries fell 1.9%, partly after MSCI announced a reduction of its weight in the flagship index as part of a periodic review.

Weakness in Indian markets this week was in contrast with other Asian markets, which were poised for their strongest week in two months. South Korea’s Kospi, a barometer for investor sentiment on the AI trade, jumped 11.5% during the week.

Friday’s movers

Tata Motors Passenger Vehicles shed 4.3% to be the biggest loser on the Nifty 50 after the carmaker’s quarterly profit slumped about 80% due to higher costs.

LG Electronics IndiaL jumped 9.6% after strong quarterly results and an affirmation of the full-year revenue target.