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Dow sheds 653 points and US crude jumps 4% as Dalal Street waits for Monday
Selling spread beyond technology on Wall Street on Friday while oil climbed on fresh West Asia fears. With Indian markets shut for the weekend, Monday's open will have to absorb Infosys's forecast cut and a run of results.
Key points
- The Dow fell 652.82 points (1.23%) to 52,215.16; the S&P 500 lost 0.52% and the Nasdaq 0.21%.
- US crude rose 3.99% to about $103.44 a barrel and Brent posted a third straight weekly gain.
- The Sensex lost 2.15% over the week to 73,123.83, its fourth straight daily fall on Friday.
Indian shares go into next week with a weak lead from abroad. On Friday the Dow Jones Industrial Average dropped 652.82 points, or 1.23%, to 52,215.16, as the selling that had hit technology shares on Thursday spread to consumer and healthcare stocks. US crude oil jumped about 4% on renewed fears of conflict in West Asia.
The S&P 500 fell 0.52% to 7,623.68 and the Nasdaq Composite slipped 0.21% to 25,955.34, both down for a second straight week. Chip stocks steadied after Thursday’s rout, and the Philadelphia Semiconductor Index edged up 0.44%.
Oil climbs again
West Texas Intermediate crude rose 3.99% to about $103.44 a barrel, and Brent, the benchmark for India’s imports, traded above $115 and posted its third straight weekly gain. Traders were reacting to attacks near the Red Sea and to talk of renewed US strikes on Iran. “Do we want to finish it off or do we just want to let it wither,” President Donald Trump said of Iran. Iranian security officials, for their part, said they had drawn up plans to strike undersea cables in the Gulf if the United States or Israel attacked again.
Airline shares fell on the higher fuel costs. Gold slid 1.24% to about $4,010 an ounce, and the 10-year US Treasury yield edged up to near 4.99%, after its sharp fall on Thursday.
There were bright spots. Cybersecurity shares rallied after a critical flaw in PHP software knocked government websites offline in Europe and elsewhere; CrowdStrike rose 8.25% and Palo Alto Networks and Cloudflare more than 7%. American Express lost 3% after announcing a restructuring that will cut about 3,500 jobs.
Economic data was mixed. S&P Global’s flash composite purchasing managers’ index for October eased to 57.6 from 58.4, while the University of Michigan’s final reading of consumer sentiment came in at 48.0, better than the 46.3 economists expected.
How India ended the week
Asian markets fell on Friday morning after Thursday’s sell-off in New York, with Tokyo’s Nikkei and Seoul’s Kospi both lower in early trade. At home, the Sensex fell 125.56 points to 73,123.83 and the Nifty 50 87.65 points to 22,600, a fourth straight losing day. Over the week the Sensex lost 1,605 points, or 2.15%, and the Nifty 2.36%.
The rupee ended Friday 12 paise weaker at a provisional 94.93 to the dollar, with the dollar index at 101.73. Foreign investors sold ₹3,458.70 crore of Indian shares on Thursday, and foreign exchange reserves fell for a sixth week to $721.02 billion.
What it means for Monday
The biggest test will be in technology shares. Infosys cut its revenue forecast for the year to 1% to 2% after the close on Friday, and its US-listed shares fell 8.5% in pre-market trade. IndusInd Bank, Bharat Petroleum and Dr Reddy’s Laboratories also reported after hours, and Kotak Mahindra Bank is due to report on Saturday.
Jio Platforms, whose share sale closed 22 times subscribed, allots shares on Monday ahead of a Wednesday listing. Abroad, the US Federal Reserve meets on Tuesday and Wednesday; markets put the chance of a rate rise at only about 5%.
On the charts, the Nifty’s Friday low of 22,372 is the first support, with resistance around 22,840.