Sensex and Nifty claw back early losses as crude and inflation bite

Indian benchmarks opened weak Friday and then clawed back most of the damage. The Sensex started at 81,833.78, sank 570.26 points to 81,340.75 by 9:20 am, then recovered to 81,739.38, still down 171.63 points or 0.21% at 9:53 am. The Nifty 50 opened at 25,209.85, dropped 205.05 points to 25,094.30, then bounced to 25,208.35, a loss of 91 points or 0.36%.

The selling was broad. All 16 major sectoral indices traded in the red, and the small-cap and mid-cap gauges slipped 0.2% and 0.3% respectively.

Foreign money kept flowing the other way. FIIs bought Rs 78.31 billion ($832.71 million) of Indian equities on Thursday, provisional data showed — their ninth straight session of net buying. November inflows have hit $8 billion, the biggest monthly haul since December 2020.

The macro picture is less friendly. India's retail inflation accelerated to 6.09% in October, breaching the Reserve Bank of India's upper tolerance limit of 6%, as food prices squeezed household budgets and fuelled talk of further tightening.

Crude stayed stubbornly high, with Brent trading around $95.5 a barrel versus roughly $92 at Thursday's close. Attacks on Saudi energy infrastructure and shipping disruptions in the Strait of Hormuz have stoked supply worries and revived inflation fears.

The global backdrop is just as choppy. Nvidia has shed more than $1 trillion in market value over the past month amid concerns about heavy AI spending and a scandal involving former CEO Jensen Huang, according to the Times of India. The stock fell as much as 14% on Thursday before closing 4.3% lower, and Huang has slipped to 13th on Forbes' rich list. Asian markets steadied anyway — South Korea's Kospi rose 2.35% and Japan's Nikkei 225 added 1.25%, on track for a 7.3% weekly gain, helped by chip names Advantest, Tokyo Electron and Kioxia. Rising US Treasury yields lifted the dollar as traders priced in a possible 50-basis-point Fed rate hike in December.