Benchmark indices saw a sharp decline on Friday after logging early gains amid rising crude oil prices and tensions in West Asia.

Brent crude oil prices surged by $5.5 per barrel to $78, raising concerns about inflationary pressures and potential delays in interest rate cuts by the RBI.

The Sensex shed over 1,800 points from the day’s high to end 0.98 per cent lower at 81,688 while the Nifty 50 fell 0.79 per cent to 25,049. Cash market volumes on the NSE were 7% lower compared to the previous session. The midcap index fell a little more than the Nifty even as the advance-decline ratio fell sharply to 0.43:1. The indices shed about 4.5 per cent each in a holiday-truncated week, their worst since June 2022.

Foreign portfolio investors sold shares worth Rs 9,896 crore, while domestic institutions bought shares worth ₹8,905 crore.

All indices, except for Nifty IT and Nifty PSU Bank, ended in the red. Gains in the IT sector were due to expected benefits from US rate cuts. ONGC saw a sharp increase of up to 6 per cent in intra-day trading, its largest rise in a year, supported by a surge in crude oil prices.

Vinod Nair, Head of Research at Geojit Financial Services, said: “The bearish sentiment continued as investors are monitoring the escalating conflict in the Middle East and have adopted a sell-on recovery strategy. Crude prices have moved up sharply but may be restricted due to an increase in production from OPEC+. The pessimism on the market is expected to continue in the near term amidst rising crude prices and fund flows to cheaper markets like China.”

India’s services PMI fell to a 10-month low in September amid lower export orders. The seasonally adjusted HSBC India Services Business Activity Index fell from 60.9 in August to 57.7 in September, signalling a softer albeit still historically robust rate of expansion, said experts.

Global shares were mostly higher Friday after worsening tensions in the Middle East sent stocks lower on Wall Street while boosting crude prices and energy and defence stocks. Hang Seng was the top gainer among Asian indices, up 2.8 per cent.

“A bear candle was formed on the daily chart with a long upper shadow. The formation of long upper shadows in the last three sessions indicates sell on rise opportunity in the market,” said Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities.

A decisive move below 25000-24950 levels could take the Nifty to 24500 levels the near term. Immediate resistance is at 25300.