The Indian stock market continued to suffer in the week that ended on Aug 21, as the Sensex and Nifty ended lower on the back of high crude oil prices, rising yields on bonds and geopolitical concerns that had investors unsure of their investment outlook, according to the latest stock market weekly report. The benchmarks bounced back on Thursday, but Friday's relatively lackluster session ended up holding back the rally.

The Nifty 50 settled at 24,252 on Friday, 0.4% higher than a week ago after closing at 24,366, Friday last week. The Sensex finally settled at 77,540.83, while losing about 0.6% in the past week.

Key Highlights

• Indian Stock Market settled down lower for the week as crude prices and global bond yields dampened investor sentiment.
• Sensex and Nifty 0.6% and 0.5% respectively due to the geopolitical and inflation fears.

Sensex and Nifty: Day-by-Day Performance

The week started off on a bad note as Sensex and Nifty continued to slide into red on Monday. The Nifty was 0.32% lower at 24,287.65 and the Sensex slipped 281 points to 77,728.16 in the face of ongoing geopolitical worries and global markets pressure.

Crude oil prices rose on Tuesday, fueling sales in the midst of renewed Middle East tensions. The Nifty ended down 0.55% at 24,154.90 and the Sensex shed 492.70 points to 77,235.46, with IT, realty and PSU banking stocks among the weak stocks in the market.

The Nifty was down 0.32% to 24,078.30 while the Sensex lost 325.78 points to 76,909.68 on Wednesday. Energy stocks continued to be affected by investors' concerns about the effects of higher crude prices and global bond yields.

This was the largest gain of the week on Thursday. Growing bond yields uncertainty in the global markets helped the Nifty rise 0.64% and the Sensex rose 628 points, as the stocks were doing well across IT, private banks, realty firms and auto major segments. It was also the ending of Nifty's seven-session downtrend.

Investors took a step back on Friday. The Nifty gained just 20.15 points, or 0.08%, to close at 24,252, while the Sensex 

Sector Performance: IT Under Pressure, Private Banks Outperform

Sectoral performance remained mixed through the week, reflecting investors' preference for relatively defensive or value-oriented pockets of the market. According to Reuters, 12 of 16 major sectors declined during the week, with the Nifty IT index falling 2.6%, pressured by concerns over US inflation and higher global bond yields.

Private banks were among the better-performing segments, gaining around 1.3% during the week, supported by positive commentary from global brokerages including Goldman Sachs and Bernstein.

The broader market showed relatively greater resilience through the week. The Nifty Smallcap index gained about 1.2%, while the Midcap index declined around 0.1%, indicating continued investor interest in select smaller companies despite weakness across the headline indices.

Stocks in Focus

Investor sentiment around Welspun Corp got a boost with the company picking up a record $1.8 billion order to gain around 15.3% in the week. Tata Motors was one of the big laggards, down about 5% for the week after a disappointing Q3 profitability and a planned price increase.

Several defence-related counters also remained in focus through the week, while select metal and PSU stocks gained ground toward the end of the period.

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What Drove the Market This Week?

1. Rising Crude Oil Prices

Crude oil continued to be one of the major issues for the Indian stocks during the week. The increase in oil prices is a concern for inflation and for corporate margins, especially in the oil-sensitive industries like aviation, auto and paints and it adds to India's import costs.

2. Global and Geopolitical Risks and Opportunities

Investors remained cautious during the week, amid renewed risks to key global energy supplies and tensions in the Middle East. Consumers continued to be very sensitive to developments that may impact world supplies.

3. Global Bond Yields

Investors' appetite for risk assets took a hit this week as global bond yields rose, especially in the tech space. The following yield rally on Thursday was a contributing factor to a broad-based rally in the markets.

4. Foreign Investor Sentiment

Avoiding risk was another factor that weighed on the Indian stocks all week. Foreign portfolio flows, currency swings, crude oil prices and global interest-rate hopes remained a focus for investors for additional signals.

Weekly Market Takeaway

The Indian stock market has been a roller coaster throughout the week with correction period and a late recovery. The Nifty lost around 0.47% from the highs of 24,366 on August 14 to 24,252 on August 21, whereas the Sensex fell around 0.60% during the period.

The big Thursday rally showed continued bid interest at lower levels, but Friday's lack of directional strength indicated investors aren't quite ready for some big directional moves into the new week.

Over the coming week, the key drivers of market direction will probably be crude oil prices, the flow of foreign institutions, geopolitical news, bond yields in the Asia-Pacific region and the rupee, as well as economic signals from the United States. The Nifty will need to gain more momentum beyond the recent trading range to resume its recovery while ongoing pressure on oil prices and the yields in the world will keep volatility high in the short term.

The week was overall poor with a slight negative tone but after several losses the rebound of the late week brought relief.