Benchmarks Fall as Fresh US Strikes on Iran Hit Sentiment

An end-of-day recap of all that transpired in the Indian markets, highlighting the major price movements and the factors driving them

India Stocks fall

By Dehuti Jani

May 26, 2026 at 11:40 AM IST

Indian equity benchmarks ended sharply lower on Tuesday after fresh US strikes in southern Iran weakened hopes of an immediate diplomatic resolution to the conflict in West Asia, reviving concerns over inflation, oil prices and India’s growth outlook. The Nifty50 declined 0.49% or 118 points to close at 23,913.70, while the BSE Sensex fell 0.63% or 479.26 points to settle at 76,009.70.

Investor sentiment deteriorated after the US launched defensive strikes against Iranian targets despite ongoing negotiations between Washington and Tehran. The development came a day after Donald Trump stated that both sides had “largely negotiated” a framework for a possible peace agreement. However, subsequent comments from Marco Rubio suggested that talks could still take several more days.

The renewed uncertainty pushed Brent Crude prices up more than 3% to around $99.35 per barrel, raising concerns for India, which remains heavily dependent on imported crude oil. Higher energy prices continued to weigh on expectations around inflation, fiscal balances and the rupee.

Sectorally, consumer durables, private banks and financial services stocks underperformed, while metal and chemical shares showed relative resilience. Apollo Hospitals Enterprise, Wipro and Bharti Airtel were among the top losers on the Nifty50 index. Broader markets remained comparatively stronger, with the Nifty MidCap index rising 0.54% after touching a fresh record high, while the Nifty SmallCap index gained 0.35%.

Top Movers of the Day
Adani Total Gas surged 8.1% to about ₹713 as investors continued to accumulate Adani group names, betting on sustained volume growth and regulatory comfort in city gas distribution despite volatile crude prices.

Adani Energy Solutions rose about 6% to ₹1,489 on the day, supported by optimism around transmission‑asset monetisation and expectations of continued growth in regulated returns.

Adani Green Energy gained close to 4% to ₹1,464 as investors remained positive on the company’s renewable‑capacity pipeline and long‑term power‑purchase visibility.

Afcons Infrastructure jumped 6.7% to roughly ₹323, extending the previous session’s rally on expectations of strong order inflows and robust execution in transport and urban‑infra projects.

Cemindia Projects advanced about 7.4% to around ₹945 as sustained buying in construction and infrastructure stocks fuelled hopes of continued project awards and margin stability.

Tejas Networks rallied over 6% to ₹503.5 as traders played the 5G and optical‑fibre theme, with the stock benefiting from renewed interest in telecom‑equipment plays.

Paytm gained about 3% to ₹1,133 after recent steep corrections, as bargain hunters stepped in on signs of stabilising operations and tighter cost control at the fintech major.

Ather Energy added roughly 3% to ₹954 as optimism around electric‑vehicle adoption and expectations of supportive policy kept two‑wheeler EV names in favour.

Vedanta rose over 3% to ₹344.8 alongside other metal names, helped by firmer commodity prices and hopes that infrastructure and energy spending will support demand for base metals.

Techno Electric & Engineering Company plunged 12.9% to about ₹1,195 after a weaker‑than‑expected Q4 print triggered heavy profit‑taking in the recently strong power‑infra and defence‑adjacent stock.

Container Corporation of India fell around 7% to roughly ₹476 as softer March‑quarter performance and margin concerns prompted selling in logistics and rail‑freight plays.

Futures & Options
Nifty May 2026 futures closed at 23,997.20, a premium of 84.2 points over the spot Nifty 50 close of 23,913.70, indicating that traders maintained positive positioning in the derivatives market despite weakness in the cash segment. In the cash market, the Nifty 50 declined 118 points or 0.49%, while volatility eased further with India VIX falling 3.41% to 16.13.

Among stock futures, HDFC Bank, ICICI Bank and SBI were the most actively traded contracts in the F&O segment of the NSE. The June 2026 derivatives series will expire on 30 June 2026.

Bonds
India’s government bond yields edged lower in volatile trading on Tuesday as softer US Treasury yields supported sentiment, although renewed tensions between the US and Iran kept investors cautious due to the impact on global oil prices. The benchmark 6.48% 2035 government bond yield ended at 6.9943%, lower than Monday’s close of 7.0270%.

Market participants balanced easing global yields against uncertainty surrounding Brent Crude prices after fresh escalation in tensions in West Asia. Investors also tracked developments in India’s debt market reforms after Securities and Exchange Board of India said it is reviewing whether listed debt securities should face disclosure requirements like equities.

Forex
Indian rupee weakened on Tuesday, snapping a three-session winning streak as rising crude oil prices and fading optimism around an immediate US-Iran peace deal pressured emerging market currencies. The rupee closed at 95.68 against the US dollar, down nearly 0.5% from the previous session.

Market sentiment weakened after hopes of a near-term diplomatic breakthrough between Washington and Tehran faded, pushing Brent Crude prices back toward the $100-per-barrel mark. Traders said losses in the rupee were partially cushioned by dollar sales from state-run banks, likely on behalf of the Reserve Bank of India.

Crypto
Crypto markets remained range-bound on Tuesday as traders navigated thin liquidity conditions following the US Memorial Day holiday and continued uncertainty around global macroeconomic developments. Bitcoin traded near $76,760, rising around 0.71% over the past 24 hours. The cryptocurrency’s market capitalisation remained close to $1.54 trillion, with daily trading volumes near $21.2 billion. Market participants continued to watch the $78,000 level as a key near-term resistance zone.

Ethereum remained relatively stable above the $2,090 level after posting modest gains of around 0.6%. Investors also monitored developments in West Asia, movements in Brent Crude prices and global bond yields for further directional cues across risk assets.

US Stock Futures
US stock futures moved higher on Tuesday as investors remained hopeful that recent US military strikes on Iranian targets would not derail ongoing efforts to ease tensions in West Asia. Futures linked to the S&P 500 rose 0.5% after gaining 1.0% in the previous session, while Nasdaq-100 futures advanced 0.8%.

Investor sentiment remained relatively resilient despite reports of renewed military action involving Iranian targets and US assets. Markets largely looked past the rebound in Brent Crude prices as traders continued to expect that diplomatic negotiations could still progress and eventually support the reopening of the Strait of Hormuz.

US Treasury Notes
US Treasury yields declined on Tuesday as markets reopened after the Memorial Day holiday, supported by renewed safe-haven demand and easing inflation concerns following softer oil prices. The benchmark 10-year Treasury yield fell around 6 basis points to near 4.489%, marking its lowest level in about a week. Meanwhile, the policy-sensitive 2-year Treasury yield declined to around 4.047% as investors reassessed expectations around future Federal Reserve policy moves.

The rally in Treasuries came as market participants monitored diplomatic developments between the US and Iran, which helped keep Brent Crude prices below recent highs and eased immediate fears of energy-driven inflation.

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