Oil Tops $116, Small Caps Have Their Worst Week Since 2025, and Nifty Gives Back Most of Its Rally
Nifty fell 2.4% to 22,600 in a four-day week, giving back most of last week's gain. The headline hides the real damage: small caps fell 7.3% and mid caps 5.6%. Houthi attacks on Saudi Arabia pushed Brent to $116.72, up 6% on the week, the Jio Platforms IPO pulled money out of listed stocks, and HDFC Bank's results disappointed. Infosys cut its outlook after Friday's close.
−2.4%, four sessions
Worst week in 20 months
Up 6%; highest since April
India's largest-ever IPO
- Markets. Nifty fell 2.4% and the Sensex 2.2%, falling on all four trading days. Markets were shut on Tuesday for Dussehra.
- The real damage. Small caps fell 7.3% and mid caps 5.6%, their worst week in 20 months, as investors cut leveraged bets.
- Oil. Houthi attacks on Saudi oil sites, and Aramco's evacuation of its headquarters, pushed Brent to $116.72 on Friday, up 6% on the week.
- Results. ICICI Bank's profit rose 20%, but HDFC Bank's rose under 5% and its shares fell 5%. After Friday's close, Infosys cut its revenue outlook.
- Jio. The ₹30,213 crore Jio Platforms IPO, India's largest ever, drew bids for 22 times the shares on offer — and drained money from the rest of the market.
Four Sessions, Four Losses
No single bad day — just steady selling as oil climbed
Nifty 50, weekly change in %, by week ending. Now about 8% below its August 7 level.
| Date | Nifty 50 | Change | What Drove It |
|---|---|---|---|
| Fri, 16 Oct | 23,146.15 | Ref. | Prior week's close |
| Mon, 19 Oct | 22,888.95 | −1.11% | Profit-taking; HDFC Bank slips after results |
| Tue, 20 Oct | — | Closed | Dussehra |
| Wed, 21 Oct | 22,811.35 | −0.34% | Jio IPO opens; small caps −2.4% |
| Thu, 22 Oct | 22,687.65 | −0.54% | Brent nears $113; 15 of 16 sectors fall |
| Fri, 23 Oct | 22,600.00 | −0.39% | Oil keeps rising; small caps −2.9% |
For the week, Nifty lost 546.15 points and the Sensex 1,605 points to 73,123.83. Fifteen of 16 major sectors fell, led by consumer durables (−6.4%), energy (−4.6%) and FMCG (−4.3%). IT held up relatively well. India VIX, the market's fear gauge, rose about 6% on both Wednesday and Friday.
A 2.4% fall in Nifty sounds manageable. But if you own mid-cap or small-cap funds, your portfolio likely fell two to three times as much this week. That gap is the real story.
The Worst Week for Small Caps in 20 Months
Leveraged bets unwound, and the Jio IPO pulled money away
Small caps fell 7.3% and mid caps 5.6%, their worst week since February 2025. In the Nifty Smallcap 250 alone, 66 stocks lost 10% or more. Swiggy fell 16.8% to a record low on Friday on worries about margins in quick commerce, and BSE-listed companies lost more than ₹20 lakh crore of market value this week.
Beyond the Jio IPO, analysts point to three causes. Small caps still look expensive — about 19.7 times next year's earnings, a 22% premium to Nifty — even after recent falls. Rising inflation and RBI rate hikes threaten the earnings of smaller, more indebted companies first. And as prices fell, investors who had borrowed to buy were forced to sell, which pushed prices down further.
Small-cap funds can fall far faster than the index, and this week showed it. If you invest in them through a SIP, falls like this are when each instalment buys the most units. But money you'll need within a couple of years doesn't belong in them.
The Houthis Take Aim at Saudi Oil
Aramco evacuated its headquarters, and Brent hit its highest level since April
Brent eases to around $108 after the US waives some sanctions on Russian oil.
Saudi air defences intercept a Houthi drone aimed at Aramco's Shaybah oilfield; two people are killed.
Aramco tells staff to leave its Dhahran headquarters, which runs its oil operations, for the first time since the war began. Brent nears $113.
Brent is near $114 when India closes, then settles at $116.72 — its highest since April 29 and up 6% for the week.
The worry has shifted. With Hormuz still disrupted, Saudi Arabia has relied on its Red Sea outlet at Yanbu to get oil out. Houthi attacks put that route at risk too. In the US, fresh doubts about AI spending hit tech stocks: the Nasdaq fell more than 2% on both Wednesday and Thursday, on Thursday after Meta reported its first cash outflow in over a decade. On Friday, US energy stocks hit a record while the S&P 500 and Nasdaq ended the week lower. The Fed is expected to hold rates at next week's meeting, with markets watching for hints of a December hike.
Oil above $110 hits India three ways: fuel and transport costs, inflation that keeps the RBI raising rates, and the pressure it puts on company profits. It's no coincidence that consumer durables, energy and FMCG — sectors where higher fuel and input costs squeeze margins — fell hardest this week.