Indian equities bled for a second straight session on Friday, May 8, as escalating US-Iran hostilities near the Strait of Hormuz rattled global risk appetite. The 30-share BSE Sensex closed at 77,328.19, down 516.34 points or 0.66%, after hitting an intraday low of 77,146.43. The NSE Nifty 50 settled at 24,176.15, off 150.50 points or 0.62%, slipping below the crucial 24,200 mark.
The indices opened gap-down at 77,631.94 and 24,233.65 respectively, and failed to recover despite a late-hour bounce. Intraday charts showed a steady drift lower from 12:00 pm, with both benchmarks unable to reclaim their previous close levels of 77,844.52 and 24,326.65.
Market breadth turned negative as volatility spiked. Brent crude flared above $100 a barrel after fresh exchanges of fire between US and Iranian forces, dashing hopes of a ceasefire and keeping India’s energy import bill in focus.
THE DRAG FACTORS: Oil, Outflows, and Uncertainty
1. West Asia Wild Card Hits Sentiment
Strait of Hormuz Tensions Put Crude, Trade Routes on Edge
Fresh military action near the Strait of Hormuz, through which a fifth of global oil flows, sent traders rushing for cover. The geopolitical shock erased weekly gains built on earlier peace optimism.
The flare-up threatens to derail India’s macro math. S&P-Crisil has already flagged the conflict as the “biggest test” of India’s resilience, warning GDP growth could moderate to 6.6% in FY27 from a base case of 7.1% if energy prices stay elevated.
2. FIIs Press Exit Button, Rupee Wobbles
Foreign institutional investors continued aggressive selling in April, dragging FII ownership to its lowest since June 2012. Importer hedging hit $58 billion in April versus just $24 billion for exporters, keeping the rupee under pressure. The currency had hit a record low of 95.4325 earlier this week amid oil-linked outflows.
3. Sectoral Scorecard: Auto Races, Realty Retreats
Despite the headline slide, the broader market showed pockets of strength. Auto led weekly gains, up 5.2%, powered by upbeat Q4 numbers from Mahindra & Mahindra, Bajaj Auto and Hero MotoCorp. FMCG, power and telecom added ∼0.5% each, while realty shed 1% and private banks slipped 0.5%.
Midcaps and smallcaps outperformed, rising 4.1% and 3.6% for the week on steady earnings. BSE hit a 52-week high post Q4, with profit up 61%.
BUSINESS BEAT: Earnings, Policy and Trade Winds
Q4 Rush: SBI, Titan Headline Results Day
Friday saw a heavy Q4 calendar with 77 BSE/NSE firms, including SBI, Titan, ABB India, Tata Consumer, MCX and Swiggy, set to report. Early trends show banks, consumer durables and metals beating estimates, while autos, NBFCs and oil & gas missed.
Trade Talks: Govt Eyes RoDTEP Boost as Exports Stumble
With merchandise exports falling 7.4% YoY in March amid Gulf disruptions, India plans to bolster the RoDTEP scheme and extend it by five years. The move aims to offset high freight rates and a tough tariff backdrop. Meanwhile, FM Nirmala Sitharaman held talks with Vietnam’s Finance Minister on tech, energy and pharma cooperation, as India looks to diversify supply chains.
Oil Play: Russia Top Supplier, But Discounts Vanish
Russia supplied 33.3% of India’s crude in March 2026 as West Asia turmoil hit Gulf flows. However, the steep discounts seen earlier have disappeared, with some cargoes now pricier. The government reiterated it will keep buying the “cheapest, best-quality crude” amid shifts.
GEOPOLITICAL CROSSHAIRS: From Hormuz to House Seats
The market’s macro backdrop remains hostage to geopolitics. While hopes of a US-Iran deal had earlier pushed Nifty past 24,400 on May 7, the latest skirmishes revived risk-off flows. A US trade court ruling called Trump’s 10% global tariffs illegal but kept them in place for most importers, adding to trade uncertainty.
THE ROAD AHEAD: Hope Floats on Oil, Earnings
Technical charts show Nifty holding 23,800-23,900 as key support, with 24,400 as immediate hurdle. Emkay Global remains constructive, expecting macro and earnings recovery once Iran tensions ease and the Strait reopens.
For now, analysts say Indian equities will stay “highly sensitive to geopolitical news flow”. With crude above $100 and the rupee vulnerable, traders are eyeing peace talks and FII flows for the next directional cue.
Key Levels to Watch
– Nifty 50: Support at 24,100; Resistance at 24,300
– Sensex: Support 77,000-77,200; Resistance 78,800-79,000
– Bank Nifty: Breakout above 55,602 signals momentum; Support at 55,600-55,500
