Markets ended the week on a weak note Friday, as fresh military exchanges between the US and Iranian forces near the Strait of Hormuz rattled investor confidence and unwound much of the optimism that had built through the week over a possible peace deal.

“The decline was primarily driven by a fresh spike in crude oil prices, with Brent crude moving back above the $100-mark amid renewed military exchanges between the US and Iran, dampening hopes of a near-term peace agreement,” said Ajit Mishra, SVP Research at Religare Broking. “...participants should maintain a stock-specific approach, preferring pharma, energy, auto, and select metal counters.”

The Nifty 50 settled at 24,176.15, down 0.62 per cent, after oscillating in a tight band of 24,127–24,254 through the session. The Sensex closed at 77,32819, shedding 0.66 per cent. Iran’s claim that the US had violated the ceasefire briefly amplified the sell-off, though subsequent statements from Donald Trump affirming the ceasefire held — and Iran signalling a return to normal conditions — helped prevent a steeper decline.

Brent crude, which had briefly surged past $100 a barrel on the renewed hostilities, pulled back to trade below $95, while domestic crude futures slipped under ₹9,000, reversing a chunk of the previous session’s gains. The rupee edged lower to around 94.47 against the dollar, down roughly 0.23 per cent, as dollar demand picked up on geopolitical uncertainty. Gold, meanwhile, rose ₹500 to ₹1,52,800, with bullion traders keeping a close eye on US non-farm payrolls data due later in the day for cues on dollar direction and Fed policy expectations.

Sectorally, the session was mixed. Banking and financial stocks bore the brunt of the selling, with Nifty PSU Bank and Nifty Financial Services among the top losers. Realty and Oil & Gas also ended in the red. IT and FMCG managed modest gains, with Nifty IT emerging as the top sectoral gainer. Titan and Apollo Hospitals were among the day’s top stock gainers, while State Bank of India and Coal India ended lower. SBI’s Q4 FY26 net profit came in at ₹19,683.7 crore, up 5.6 per cent year-on-year and marginally above estimates, though the market reaction stayed muted given softer-than-expected core income growth and margin pressures.

A notable divergence played out in broader markets. The Nifty Midcap index hit a fresh all-time high before closing at 61,911, down just 0.15 per cent, while the Smallcap index extended its gains for a fourth straight session to a new high — both indices significantly outperforming the benchmarks. Market breadth, however, remained weak, with 286 of the Nifty 500 stocks ending in the red.

On a weekly basis, the Nifty gained 0.74 per cent and the Sensex added 410 points, with Capital Markets, Auto and Defence indices leading sectoral gains. “The broader market stole the spotlight this week, with midcap and smallcap indices significantly outperforming,” noted Shrikant Chouhan, Head of Equity Research at Kotak Securities, adding that easing geopolitical tensions mid-week had prompted rotation into high-beta stocks.

FII outflows moderated through the session, with domestic institutional buying continuing to provide a buffer against sharper declines.

The road ahead hinges squarely on the Gulf. Iran’s response to the US peace proposal and any developments around the Strait of Hormuz will set the tone for markets next week. As Dr Joseph Thomas of Emkay Wealth Management put it, “...a resolution may be reached soon and the markets could gradually pick up steam,” though he cautioned that geopolitical fragility could linger. Key technical levels to watch: Nifty support at 24,000–24,100 and resistance at 24,400–24,500; for the Sensex, 76,500 on the downside and 77,800–78,000 on the upside.

Published on May 8, 2026