Benchmarks opened with a gap-up on Thursday but surrendered early gains to close lower for the fourth straight session, as a surge in Brent crude above $97 a barrel and persistent geopolitical tensions kept buyers at bay even as the rupee staged its sharpest single-day rally in over a month.
“Markets failed to capitalize on early gains and ended lower on the weekly expiry day… investor remained cautious amid lingering geopolitical uncertainties and elevated crude oil prices, which continue to influence global risk appetite,” said Ajit Mishra, SVP Research at Religare Broking.
The Nifty 50 fell 41 points, or 0.17 per cent, to close at 23,873, after touching an intraday high near 24,083 before reversing sharply. The Sensex dropped 417 points, or 0.55 per cent, to settle at 76,152.86, having opened at 76,724 and briefly touching 76,924 before sellers took control. It was the third straight session of losses for the Sensex and the fourth for the Nifty. The closing auction session added to the drag, with Nifty shedding nearly 30 points in the final minutes. NSE cash turnover slipped 3 per cent from the previous session.
IT, FMCG and auto stocks lead selloff
The selloff was concentrated in IT, FMCG, and auto stocks. Hexaware fell 2.4 per cent after its CEO resigned, while Godrej Consumer lost around 3 per cent following management’s cautious near-term guidance for its domestic business. Bajaj Auto and Tech Mahindra were among the Nifty’s top laggards on the day.
Against this, financial stocks and realty provided pockets of strength. RBL Bank surged over 4.5 per cent, Adani Ports gained 2 per cent, and Axis Bank and HDFC Bank rose 0.9 per cent and 0.4 per cent respectively. In realty, Anant Raj, Oberoi Realty, DLF, and Lodha Developers all advanced, with analysts attributing the buying to value-seeking ahead of the festive demand season. Bank Nifty bucked the broader weakness, ending 208 points higher.
Forex swap scheme boosts banks and rupee
The catalyst for financial sector strength was a blockbuster response to the Reserve Bank of India’s concessional foreign-currency swap scheme. Indian banks collectively mobilised $136.4 billion through the twin forex windows, well ahead of market expectations, pushing system liquidity surplus above Rs 6 trillion.
The inflows also powered the rupee to its biggest single-day gain since July 27. The currency appreciated 49 paise to close at 94.48 against the dollar. “The Indian rupee registered its largest single-day gain since July 27, driven by massive capital inflows from the Reserve Bank of India’s concessional swap scheme that reeled in a colossal $136.4 billion and far exceeded market expectations,” said Dilip Parmar, Senior Research Analyst at HDFC Securities. He added that the technical setup for spot USD/INR has turned weak, with the pair finding support at 84.10 and resistance at 84.95.
Gold firm; broader markets outperform
On the commodity front, gold traded firm as softer-than-expected US private payroll data raised hopes of a less hawkish Federal Reserve. “Gold range can be seen between ₹1,51,000–₹1,55,500,” said Jateen Trivedi, VP Research Analyst at LKP Securities, adding that markets will closely watch Friday’s US Non-Farm Payrolls print for further policy cues.
Broader markets held up well. The Nifty Midcap 100 gained 0.37 per cent and the Nifty Smallcap 100 advanced 1.20 per cent, with the advance-decline ratio at 1.73, pointing to healthy stock-specific participation even as frontline indices struggled. India’s Services PMI also came in at 54.1 for August, up from 53.3 in July, with employment growth at a 15-month high, providing a positive domestic macro data point amid the global noise.
US jobs data, crude oil and Middle East in focus
Looking ahead, investors will track US Non-Farm Payrolls and unemployment data on Friday for clues about the Fed’s policy direction. Domestically, crude oil price movement, Middle East developments, and foreign fund flows will remain key variables. Nifty faces immediate resistance in the 24,000–24,200 zone, while a decisive close below 23,800 could open the door to 23,600, the confluence of a prior gap area and the July 2026 low.