Sensex, Nifty outlook for tomorrow (May 13): Will stock market recover from bear attack?

Indian equity benchmarks extended their losing streak on Tuesday, with broad-based selling pressure dragging both the frontline and broader indices sharply lower. All major sectoral indices closed in the red, with realty, IT, and consumer durables emerging as the worst-hit pockets.

The 30-share BSE Sensex pack tumbled 1,456.04 points or 1.92 per cent to settle at 74,559.24, while the Nifty50 index fell 436.30 points or 1.83 per cent to end at 23,379.55.

Broader indices underperformed as Nifty Midcap 100 declined 2.54 per cent, while Nifty Smallcap 100 slipped 3.17 per cent.

Geopolitical tensions, crude surge, FII sell-off weigh on sentiment

“Indian markets extended losses for the fourth consecutive session as the lack of progress in US-Iran negotiations continued to create nervousness across global markets. Escalating tensions in West Asia have heightened fears of a prolonged geopolitical conflict, keeping investors risk-averse and triggering sustained selling across financial markets. The uncertainty surrounding the conflict has kept crude oil prices elevated ($107.4 per barrel), leading to persistent foreign institutional investor (FII) outflows,” said Siddhartha Khemka, Head of Research, Wealth Management at Motilal Oswal Financial Services (MOFSL).

He added that unless there is meaningful progress in negotiations or signs of de-escalation in West Asia, volatility and weakness in domestic equities are likely to persist.

Rupee at record low adds pressure

The Indian rupee’s sharp depreciation has further amplified market concerns. “The Indian rupee weakened to a fresh record low of 95.62 against the US dollar amid fears of a widening import bill and rising inflationary pressures,” MOFSL’s Khemka noted.

“The rupee depreciation is largely attributed to anxieties over elevated crude oil prices and their adverse impact on the fiscal deficit. Combined with rising risk aversion and sustained foreign capital outflows, these factors have positioned the rupee as the worst-performing Asian currency so far this year,” said Nandish Shah, Deputy Vice-President at HDFC Securities.

‘Triple macro hit’

Hariprasad K, Sebi-registered Research Analyst and Founder of Livelong Wealth, echoed that Indian equities are facing a “triple hit” of elevated crude oil prices, a record-low rupee, and continued aggressive FII outflows.