Indian stocks extend four-day slide as oil surge weighs on banks
Benchmark Indian indices posted their fourth consecutive daily loss as surging crude oil prices from West Asian tensions triggered broad selling pressure and dragged financial stocks lower.
The Sensex and Nifty 50 extended their losing streak on Thursday, driven by a spike in Brent crude toward $97 per barrel amid escalating West Asia conflict. The Sensex fell 364 points, or 0.47%, to close at 76,391.39, while the Nifty 50 dropped 127 points, or 0.53%, to finish at 23,869.60.
This four-session slide has erased 1,760 points, or 2.3%, from the Sensex, with the Nifty shedding roughly 2%. The broad-based selling was evident in market breadth, as 2,101 stocks declined against just 1,155 advancers, highlighting widespread risk aversion among investors.
Financials bore the brunt of the geopolitical anxiety, with the Nifty Bank index dropping 534.80 points, or 0.94%, to 56,592.00. Heavyweights like HDFC Bank and State Bank of India fell 2.07% and 1.48% respectively, as rising oil prices threaten margins and dampen sentiment in interest-rate-sensitive sectors.
Realty, oil and gas, and metal sectors also posted notable declines, while auto was the lone outperformer with a 0.70% gain. Despite the broader weakness, the Nifty 50 managed to hold above the crucial 23,800 support level and its 50-day moving average, suggesting buyers are still defending key technical zones.
Momentum indicators point to near-term caution, with the Nifty's Relative Strength Index easing to 45 and the MACD registering a bearish crossover. A decisive close below 23,800 could invite fresh selling toward the 23,500 level, while reclaiming 24,400 is required to signal a meaningful revival in bullish momentum.
The banking index also held above its July 8 swing low and remains positioned above its 50- and 100-day moving averages, indicating the intermediate-term trend is still constructive. Immediate support sits at 56,500, with a stronger cushion at 56,000, while a move above 58,700 is needed to revive upside momentum.
Amid the broader market correction, research platform MarketSmith India issued buy recommendations for two small finance banks, citing strong retail-focused models and improving asset quality. Both stocks are positioned as beneficiaries of financial inclusion and expanding branch networks in underserved markets.
Suryoday Small Finance Bank, trading at ₹195, received a buy rating between ₹193 and ₹196 with a target price of ₹240 over the next two to three months. The stock, which recently formed a cup-with-handle technical breakout, carries a P/E of 12.68 and a stop loss set at ₹179.
Another small finance bank was recommended for purchase between ₹68 and ₹69, targeting ₹80 in the same timeframe. This stock, showing a consolidation base breakout, trades at a P/E of 18.27 with a stop loss at ₹64, though analysts warn of risks including high microfinance exposure and rural borrower dependence.
