Indian shares edged higher on Friday but still ended the week lower for a third straight week, their longest losing streak in five months. The Nifty 50 rose 0.35% to 24,175.65, while the Sensex gained 0.43% to 77,264.51. For the week, however, both indexes fell as investors remained cautious about the Federal Reserve and the sharp swings linked to India’s new closing-auction system.
Some parts of the market still performed well. India’s IT index jumped 3.5% after Nvidia’s results lifted technology stocks, while small- and mid-cap stocks gained 0.5% each. Lower crude prices, company earnings and steady buying from local investors also supported the gains. But the wider market remained weak, with 10 of 16 major sectors ending lower.
The market moves come as India continues to take a cautious approach to crypto. Crypto use remains high in the country, but virtual-asset service providers must register with the Financial Intelligence Unit and follow anti-money-laundering rules. The Reserve Bank of India has also called for tighter rules around crypto and privately issued stablecoins.
How India’s stock market compares with its crypto market
India’s stock market and crypto market are growing under very different rules. The Nifty and Sensex are part of a well-regulated financial system with established exchanges, big investors and rules such as the new closing auction. Crypto faces a more careful approach from regulators, even though many Indians still use digital assets. The OECD has also described crypto use in India as widespread despite the country’s strict stance.
Indians can still buy and trade crypto, but crypto companies face more uncertainty about future rules. Stablecoins are a key concern for the Reserve Bank of India, which has warned that they could affect financial stability and the country’s control over its money. The way regulators handle the market could decide whether crypto stays mainly a trading market for individuals or becomes a bigger part of India’s digital financial system.
Also Read: South Korean Exchanges Upbit and Bithumb Expand KRW Markets with Canton and Arcium Listings
Could India’s next market reforms change the future of crypto?
The question is whether India will move beyond controlling crypto and decide where digital assets fit into its financial system. This is becoming more relevant as blockchain technology starts to appear in areas linked to traditional finance. India is reportedly preparing its first tokenized corporate bond issue for September, worth less than 5 billion rupees ($57 million) involving state-owned REC, the central bank and market regulators.
Tokenized securities can follow very different rules from cryptocurrencies that are freely traded. Still, the project shows that Indian regulators are willing to test blockchain technology when it can be used within a controlled financial system.
Meanwhile, India has become Asia’s least-favoured stock market among fund managers, despite improving corporate earnings and more than $4 billion in foreign investment flowing into Indian equities during the quarter.
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