Global uncertainties, continued foreign investor outflows and concerns over lower agricultural output are keeping Indian equity markets under pressure. Hopes of a short-term recovery have weakened as Asian markets and US stock futures remain subdued.
The GIFT Nifty, an indicator of early market direction, ended Monday night at 22,817 and slipped to 22,799 in early trade. The trend suggests Indian markets may open lower for another session.
Indirect talks between the United States and Iran, mediated by Qatar, are continuing, but there has been no significant progress so far.
Reports suggesting that US President Donald Trump had offered to lift naval restrictions and release Iranian assets if Tehran provided guarantees on its nuclear programme were denied by Trump. The US position remains that direct negotiations can happen only after receiving clear assurances on Iran’s nuclear commitments.
Around 60% of the crude oil that previously moved through the Strait of Hormuz before the conflict is still flowing through the route. However, Iran’s oil exports have been severely disrupted.
The US believes it has limited pressure to compromise on oil-related issues, while Iran faces greater urgency to ease restrictions around the Strait of Hormuz. Political calculations ahead of the US elections and uncertainty over whether Iran’s powerful Islamic Revolutionary Guard Corps would accept any agreement are also complicating negotiations.
Rising crude oil prices and disruptions at refineries, which are pushing diesel prices higher, are increasing concerns about further interest rate hikes.
The probability of the US Federal Reserve raising rates by another 25 basis points by the end of October has increased to 70.3%, according to market expectations.
Bond markets are already reacting. Bond prices have declined, pushing yields to their highest levels since 2004.
2-year US Treasury yield: 4.926%
10-year Treasury yield: 5.233%
30-year Treasury yield: 5.62%
Higher bond yields increase borrowing costs for companies, which could hurt corporate earnings. A continued sell-off in bond markets may also push investors away from equities and trigger further capital outflows from emerging markets, including India.
US markets declined on Monday as geopolitical tensions and economic concerns weighed on investor sentiment.
Boeing shares fell 7% after aviation regulators said additional checks would be required before approving flights involving Boeing 737 MAX 10 aircraft following a newly identified software issue.
Higher interest rate concerns also pressured artificial intelligence-related stocks. Nvidia was among the few gainers in the sector after announcing a $150 billion share buyback programme.
US market closing:
Dow Jones fell 347.11 points (0.67%) to 51,481.51
S&P 500 declined 59.72 points (0.77%) to 7,683.69
Nasdaq Composite dropped 248.34 points (0.92%) to 26,820.38
US stock futures continued to trade lower.
Dow futures: down 50 points (0.10%)
S&P 500 futures: down 12 points (0.15%)
Nasdaq futures: down 87 points (0.29%)
Indian companies listed through American Depository Receipts (ADRs) saw mixed movement.
HDFC Bank declined 2.61% during regular trading before recovering 0.58% in extended trading to close at $22.54.
ICICI Bank fell 2.22% initially but later gained 0.95% to end at $27.56.
Infosys gained 0.19% before declining 0.57% in extended trading to close at $10.46.
Wipro fell 1.82% during regular hours before recovering 0.62% to close at $1.63.
European markets moved in different directions on Monday.
Germany and the UK ended marginally lower, while France and the Stoxx 600 index recorded small gains.
Asian markets opened lower on Tuesday amid global uncertainty.
Japan’s Nikkei: down 1%
South Korea’s Kospi: down 0.85%
Taiwan index: down 0.45%
Hong Kong’s Hang Seng: down 0.40%
Shanghai Composite: down 0.20%
Australia’s benchmark index: up 0.20%
Indian equities faced heavy selling pressure on Monday as concerns over crude oil prices, interest rates, weak agricultural output due to El Niño conditions and foreign investor withdrawals intensified.
Broad-based selling was seen across sectors. Both the Sensex and Nifty slipped below key levels of 73,000 and 23,000 respectively.
If the decline continues this week, the Nifty could record eight consecutive weeks of losses — a trend not seen in nearly 25 years.
At Monday’s close:
Nifty 50 was 13.62% below its January record high
Sensex was 15.53% below its December peak
Public sector banks were among the biggest losers.
Sectoral performance:
Public sector bank index: down 3.24%
Bank of India: down 5.76%
Bank of Maharashtra: down 4.75%
Indian Bank: down 3.48%
Capital markets, financial services, automobiles, metals, FMCG, defence, oil and tourism stocks also witnessed heavy selling.
NSE shares declined 1.74% to close at ₹1,761.50, below the IPO price. BSE shares fell 3.15%.
Market breadth remained weak:
BSE: 1,271 stocks gained while 3,218 declined
NSE: 861 stocks gained while 2,696 declined
Foreign institutional investors (FIIs) remained aggressive sellers, offloading ₹5,353.22 crore worth of equities in the cash market. Domestic institutions bought shares worth ₹5,189.02 crore.
Market closing:
Sensex: down 1,124.02 points (1.52%) at 72,771.72
Nifty 50: down 360.25 points (1.56%) at 22,780.25
Bank Nifty: down 1,108.75 points (1.99%) at 54,471.65
Midcap 100: down 991.80 points (1.63%) at 59,914.20
Smallcap 100: down 364.15 points (1.85%) at 19,351.20
Gold prices witnessed a sharp correction as expectations of higher interest rates weighed on investor sentiment.
Gold futures fell nearly 4%, losing $170, to close at $4,116.10 per ounce. Prices recovered slightly in early trade to around $4,130.
The market is now watching whether gold will return towards the $4,000–$4,100 range seen during June and July.
In Keralam, 22-carat gold prices declined by ₹2,640 in two sessions on Monday to ₹1,09,320 per sovereign.
Silver also declined sharply, falling 5.68% to $60.77 per ounce.
Other precious metals:
Platinum: $1,708
Palladium: $1,195
Rhodium: $8,525
International rubber prices declined again, while prices in Keralam continued to rise.
In Bangkok:
RSS-1: $283.50 per quintal
RSS-3: $280 per quintal
In Keralam, RSS-4 rubber prices increased to ₹27,900 per quintal.
Interest rate concerns pushed industrial metals lower.
Copper declined 1.33% to $14,544.35 per tonne
Aluminium fell 0.43% to $3,252 per tonne
Lead, zinc and tin also declined, while nickel gained.
The US Dollar Index strengthened on Monday, closing at 101.20 and rising further to 101.26 in early trade.
Currency movement:
Euro: $1.1367
Pound: $1.3247
Japanese yen: 157.36 per dollar
Chinese yuan: 6.71 per dollar
The 10-year US Treasury yield remained elevated at 5.23%.
The Indian rupee weakened against the dollar.
The dollar gained 17 paise to close at ₹95.98. In offshore markets, it touched ₹96.08 before easing to ₹95.99.
Other currencies:
Chinese yuan: ₹14.30
Euro: ₹109.11
Crude oil prices extended gains on Monday amid geopolitical concerns.
Brent crude: up 1% to $105.28 per barrel
Early Tuesday trade: Brent at $106.62
WTI crude: $93.60
Cryptocurrency markets continued their decline.
Bitcoin slipped below $83,000
Ether fell below $2,660
Solana dropped below $117
(September 28)
Sensex: 72,771.72 (-1.52%)
Nifty 50: 22,780.25 (-1.56%)
Bank Nifty: 54,471.65 (-1.99%)
Midcap 100: 59,914.20 (-1.63%)
Smallcap 100: 19,351.20 (-1.85%)
Dow Jones: 51,481.51 (-0.67%)
S&P 500: 7,683.69 (-0.77%)
Nasdaq: 26,820.38 (-0.92%)
Dollar: ₹95.98 (+₹0.17)
Gold (ounce): $4,116.10 (-$170.10)
Gold (sovereign): ₹1,09,320 (-₹2,640)
Brent crude: $105.28 (+0.96%)