Stock Markets Extend Losses as Crude Surge, Global Yields Weigh on Sentiment

Last Updated on September 8, 2026 10:11 pm by INDIAN AWAAZ Our Business Correspondent Indian equity markets extended their decline for a second consecutive session on Tuesday as a sharp rise in crude oil prices, firm global bond yields and renewed concerns over inflation and interest rates kept investors cautious. The escalation of tensions in the Middle East, particularly around the strategically important Strait of Hormuz, added to risk aversion and increased worries over the potential impact of higher energy costs on oil-importing economies such as India. The S&P BSE Sensex fell 555.23 points, or 0.73%, to close at 75,577.58, while the Nifty 50 declined 144.05 points, or 0.61%, to 23,635.10. With Tuesday's losses, the Sensex has fallen 1.23% and the Nifty 1.10% over the past two trading sessions. The Nifty ended below the psychologically important 23,650 mark, with selling pressure concentrated in private-sector banks, oil and gas companies and information technology stocks. Among the major drags on the Nifty, ICICI Bank declined 1.97%, Reliance Industries fell 1.11% and HDFC Bank lost 1.06%. Weakness in these heavyweight counters exerted considerable pressure on the headline indices because of their significant index weightage. The sharp rise in crude oil prices remained the principal concern for Indian investors. Brent crude for November 2026 delivery climbed $2.04, or 2.12%, to $98.32 a barrel, moving closer to the psychologically significant $100 level. The increase assumes particular significance for India, which imports roughly 85% of its crude oil requirements. A sustained rise in international oil prices can increase the country's import bill, put pressure on the current account and weigh on the rupee. It can also feed into domestic inflation through fuel, transportation and production costs. For companies, higher energy prices can translate into increased input and logistics expenses, particularly for sectors with high fuel consumption. If such pressures persist, they could eventually affect corporate margins and consumer demand. Investors were therefore closely tracking developments in the Middle East, with concerns intensifying over the possibility of disruptions to crude supplies through the Strait of Hormuz, one of the world's most important oil-shipping routes. Apart from crude, rising global bond yields also contributed to the cautious mood. The US 10-year Treasury yield rose 0.27% to 4.797%, reinforcing concerns that interest rates may remain elevated for longer. Markets are also reassessing the outlook for US monetary policy amid renewed inflation risks. The rise in energy prices could complicate the Federal Reserve's policy decisions because higher fuel costs can feed into broader inflation. Market participants are reportedly assigning more than a 60% probability to a 25-basis-point rate increase at the Federal Reserve's September meeting. The inflation data due later this week could prove crucial in determining whether those expectations strengthen or weaken. Higher US yields generally reduce the relative attractiveness of emerging-market assets and can put pressure on currencies such as the Indian rupee. The Indian rupee came under pressure during the session, with the partially convertible currency hovering at 94.8300 per dollar, compared with Monday's close of 94.5650. The combination of elevated crude prices and a stronger dollar environment remains an important challenge for the domestic currency. A weaker rupee increases the local-currency cost of imported crude and can consequently add to inflationary pressures. The US Dollar Index, however, declined 0.23% to 98.96. India's 10-year benchmark government bond yield moved in the opposite direction, easing to 6.951% from 6.957% previously. Despite the weakness in the benchmark indices, broader market stocks displayed relative resilience. The BSE 150 MidCap Index gained 0.27%, while the BSE 250 SmallCap Index advanced 0.17%. Market breadth nevertheless remained negative. On the BSE, 2,096 shares advanced against 2,291 declines, while 239 stocks closed unchanged. Interestingly, volatility expectations eased marginally despite the fall in headline indices. The India VIX, which tracks expected near-term market volatility, declined 0.51% to 11.10. The performance suggests that while investors remained cautious about large-cap stocks and global macroeconomic risks, selling pressure was not broad-based enough to trigger a major spike in domestic volatility. Global markets were also unsettled by the combination of geopolitical tensions, higher crude prices and shifting expectations on interest rates. Asian equities mostly ended lower, while European markets also weakened. European investors were particularly concerned about the possibility of an extended period of stagflation as higher energy prices threaten to push inflation higher while simultaneously weighing on economic activity. US stock futures pointed to a cautious reopening following the Labor Day holiday, with Dow futures down around 400 points amid heightened concerns over developments in the Middle East. Crude prices moved sharply higher as tensions surrounding the Strait of Hormuz intensified following US-Iran military confrontations. Iran has threatened tighter controls around the strategic waterway, raising fears that any disruption could have significant consequences for global energy supplies. Investors were also monitoring renewed trade tensions between the United States and Canada. Canada is preparing retaliatory tariffs on approximately $20 billion worth of US goods, while US President Donald Trump has threatened to prevent aircraft manufacturer Bombardier from selling aircraft in the US unless the company manufactures them domestically. The developments add another layer of uncertainty to an already fragile global economic environment, where markets are simultaneously dealing with geopolitical risks, inflation concerns, monetary-policy uncertainty and elevated trade tensions. In the primary market, Deepa Jewellers made a strong debut on the BSE. The stock opened at Rs 221.05, representing a 24.89% premium over its issue price of Rs 177. It subsequently touched a high of Rs 222.10 and a low of Rs 193.10 before ending at Rs 194.30, still representing a 9.77% premium over the IPO price. More than 35.07 lakh shares changed hands on the BSE. Shares of Rays of Belief, however, ended below their issue price. The stock closed at Rs 228.05, a 4.50% discount to its issue price of Rs 239. It was listed at Rs 239 and touched the same level as its day's high, while its low stood at Rs 228. More than 92,000 shares were traded on the BSE. Several individual stocks attracted attention following corporate developments and brokerage actions. Sansera Engineering gained 3.30% to Rs 4,025 after a foreign brokerage initiated coverage with an 'outperform' rating and a target price of Rs 4,954. Polycab India advanced 1.36% to Rs 8,373.50 after a foreign brokerage retained its 'Buy' recommendation and set a target price of Rs 11,100. Garuda Construction and Engineering rose 1.56% after its subsidiary, Dream City Builders, secured a contract to construct a 93-storey landmark tower in Jeddah, Saudi Arabia. The project is estimated to have revenue potential of approximately Rs 1,800 crore. The biggest gain among the highlighted stocks came from GE Vernova T&D, which surged 8.77% after receiving a contract from Power Grid Corporation of India for establishing a high-voltage direct-current terminal station for renewable-energy evacuation. The project involves the design and establishment of a 6,000 MW, ±800 kV HVDC Line Commutated Converter terminal station, comprising two 3,000 MW terminals. It is intended to facilitate renewable-power evacuation from Barmer II to South Kalamb. Shiprocket slipped 0.97% after reporting a narrower consolidated net loss of Rs 13.71 crore in Q1 FY27, compared with Rs 18.03 crore in Q1 FY26. However, revenue from operations declined 33.81% year-on-year to Rs 592.08 crore. Organic Recycling Systems rose 4.11% after securing two EPCOM contracts from Bharat Petroleum Corporation aggregating Rs 167.30 crore. Sri Lotus Developers and Realty declined 1.36% after announcing that its subsidiary had been appointed developer for a residential redevelopment project in Model Town, Versova, Andheri West, Mumbai. Symphony gained 5.72% after announcing plans to expand its Indian product portfolio through a phased entry into room air conditioners, BLDC ceiling fans and air purifiers. Separately, Symphony's founder-promoter, chairman and managing director Achal Anil Bakeri plans to gift approximately 3.43 lakh equity shares, representing 0.5% of the company's equity capital and valued at around Rs 20 crore at prevailing market prices. The shares will be gifted to the spouses, parents or immediate relatives of employees, including former employees and housekeeping staff, as well as the family office. Activity in the primary market remained brisk, with several issues attracting substantial investor interest. Pranav Constructions, which opened its IPO on September 7 and closes on September 9, had received bids for 40,16,68,320 shares against 2,24,63,137 shares on offer by 4:33 p.m. on September 8. The issue was subscribed 17.88 times. The price band has been fixed at Rs 118-Rs 124 per share, with a minimum bid of 120 equity shares. Prasol Chemicals, whose issue opened on September 8 and closes on September 10, received bids for 21,93,158 shares against 54,43,229 shares on offer. The issue was subscribed 0.40 times. Its price band is Rs 643-Rs 676 per share, with a minimum lot size of 22 shares. Glass Wall Systems (India) received bids for 3,99,44,414 shares against 1,64,57,298 shares on offer, translating into subscription of 2.43 times. Its IPO, which opened on September 8, closes on September 10. The price band is Rs 172-Rs 182 per share, with a minimum bid of 82 shares. Kanohar Electricals received bids for 3,06,45,430 shares against 1,16,93,326 shares on offer, resulting in subscription of 2.62 times. The issue carries a price band of Rs 601-Rs 632 per share and a minimum lot size of 23 shares. For domestic equities, the near-term market direction is likely to remain closely tied to global crude prices, developments around the Strait of Hormuz and incoming inflation data. The combination of elevated oil prices, a weaker rupee and firm US bond yields could continue to challenge investor sentiment. At the same time, resilience in mid- and small-cap stocks, continued corporate order wins and strong subscription levels in selected IPOs indicate that domestic risk appetite has not disappeared. The key question for investors will be whether the rise in crude prices proves temporary or develops into a prolonged energy shock. A sustained move towards or above the $100-a-barrel threshold could increase pressure on inflation, corporate margins and India's external balances, potentially keeping markets volatile in the sessions ahead. Disclaimer: Stock market investments are subject to market risks. Please consult with a certified financial advisor before making any investment decisions.