Indian Shares Fall as Oil Rises; Gilt Yields Surge After Inflation Data

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

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By Dehuti Jani

October 12, 2026 at 12:45 PM IST

Indian benchmark indices fell on Monday as investors assessed the Reserve Bank of India's measures to support the rupee, while elevated oil prices and concerns over a weaker monsoon kept sentiment subdued. The Nifty50 declined 0.70% to 22,363.35, while the Sensex fell 0.76% to 71,924.68. Both indices surrendered early gains after snapping their longest weekly losing streak in 25 years on Friday.

Sectoral performance was mixed, with FMCG, PSU Bank and IT stocks weighing on the benchmarks. Apollo Hospitals Enterprise, ITC and Tech Mahindra were among the top Nifty 50 losers, while Nifty Media and Nifty Chemical advanced. The Nifty MidCap 100 rose 0.08%, while the Nifty SmallCap 100 gained 1.42%, supported by domestic fund inflows.

Brent crude rose to $106 a barrel despite US President Donald Trump saying Russia and Ukraine would halt attacks on energy infrastructure. Persistent geopolitical tensions kept oil prices elevated, adding to inflation risks for India, the world's third-largest crude importer. The rupee rose 1% to 95.77 per US dollar from Friday's close of 96.73, posting its strongest single-day gain since April. The recovery followed the RBI's weekend measures to redirect oil companies' dollar purchases away from the spot market and tighten hedging rules, with likely central bank dollar sales providing additional support.

Indian government bond yields rose sharply as traders positioned for further RBI liquidity absorption and awaited September inflation data. The benchmark 6.94%, 2036 bond yield ended at 7.3857% from 7.2994% on Friday, after touching 7.3985%, its highest level since March 2023.

The National Statistics Office released the September CPI data showing retail inflation accelerating to 5.54% from 4.83% in August, its highest since October 2024. Food inflation rose to 7.74% from 5.97%, while average CPI inflation for the July-September quarter stood at 4.9%, in line with the RBI's forecast. The higher September reading added to concerns over the inflation outlook and the central bank's future policy decisions.

Top Movers of the Day

Dr. Reddy's Laboratories led the gainers, rising 2.71% to ₹1,229.40 due to positive technical momentum surpassing its 100-day exponential moving average, and the healthcare sector attracted stock-specific buying interest amidst a broader market downturn.

Bajaj Auto advanced 2.62% to ₹10,034.00, recovering from recent selling pressure and short covering in the auto sector. The company found renewed buying support that helped lift the broader automobile sector.

Tata Motors Passenger Vehicles gained 1.63% to ₹284.45, tracking a positive upward trend among major automobile manufacturers during the session.

Bharat Electronics rose 1.56% to ₹373.90 as investors favoured specific defence stocks following a rebound in sentiment across aerospace and defence counters.

BSE climbed 1.31% to ₹3,330.20, supported by elevated trading volumes, RBI measures to support rupee, an ease in crude oil prices and high market activity across the exchange.

Mahindra & Mahindra added 0.60% to ₹2,813, contributing to the relative resilience of auto stocks while other sectors declined. The stock rose due to resilient domestic auto demand and festive season sales momentum.

Apollo Hospitals plunged 3.15% to ₹7,775.00, emerging as the top loser in the Nifty 50 due to profit booking in the healthcare space. The Supreme Court hearing on drug price caps triggered a sector-wide sell-off, causing the stock to fall.

Tech Mahindra dropped 3.10% to ₹1,470.00 as investors remained cautious ahead of its board meeting later in the week to consider Q2 results and a potential bonus share issue and an interim dividend.

ITC declined 3.05% to ₹257.90 as fast-moving consumer goods stocks faced a heavy sell-off amid persistent foreign institutional selling.

Hindustan Unilever fell to a 5-year low, down by 2.10% to ₹1,822.00, tracking the severe selling pressure that dragged down the broader FMCG sector.

Larsen & Toubro slipped 2.05% to ₹3,627.50 as capital goods and infrastructure stocks were caught in the wider market correction driven by surging crude oil prices.

Reliance Industries declined 1% to ₹1,158.90 rupees, sliding to an 18-month low amidst sustained foreign fund outflows and broad market weakness.

Futures & Options
The Nifty October 2026 futures closed at 22,399.90, a premium of 36.55 points over the Nifty 50's cash-market close of 22,363.35. The Nifty 50 fell 157.10 points, or 0.70%, during the session, while the NSE's India VIX, a gauge of expected near-term volatility, rose 5.98% to 15.24.

HDFC Bank, HCL Technologies and Avenue Supermarts (DMart) were the most-traded individual stock futures contracts in the NSE's F&O segment. The October 2026 F&O contracts will expire on 27 October 2026.

Bonds
Indian government bond yields rose on Monday as traders assessed September's higher-than-expected retail inflation and the Reserve Bank of India's liquidity-absorption measures. The benchmark 6.94%, 2036 bond yield closed at 7.3857%, up from 7.2994% on Friday, after touching an intraday high of 7.3985%, its highest level since March 2023.

India's retail inflation accelerated to 5.54% in September from 4.83% in August, reaching its highest level since October 2024. Food inflation climbed to 7.74% from 5.97%, adding to concerns over the inflation outlook and the potential for further RBI rate hikes. Short-term bonds underperformed after the RBI announced further liquidity-absorption measures. While an open-market operation bond sale was widely expected, the cash reserve ratio change announced just days after the monetary policy decision surprised market participants. The yield on the 6.36%, 2031 bond fell nearly 11 basis points to 7.0943%.

Forex
The Indian rupee rose 1% on Monday to 95.77 per US dollar from Friday’s 96.73, its biggest one-day gain since April, outperforming largely flat Asian peers. The rise followed RBI measures to curb dollar demand in spot and derivatives markets, supported by likely central bank dollar sales.

Announced on Saturday after the rupee neared last week’s record low of 96.96, the measures shift oil companies’ dollar purchases from the spot market and tighten hedging rules. The oil-purchase window could remove about $10–12 billion in monthly spot-market demand, based on government oil-import data.

The steps aim to support the rupee and strengthen India’s balance of payments amid a higher oil-import bill and persistent capital outflows.

Crypto
The cryptocurrency market staged a technical rebound on Monday after last week's sharp sell-off, with investors watching key support levels amid broader macroeconomic uncertainty. Bitcoin traded around 83,400-83,500 after reaching an intraday high of nearly $84,250. Holding above $83,000 remains important for the near-term recovery, while a break lower could bring the $82,000 support zone into focus.

Ethereum traded around $2,555 after recovering from a multi-day low, slightly outperforming Bitcoin over shorter intervals. The $2,500 level remains a key near-term support, with a break potentially exposing the $2,350 zone. A sustained move above resistance near $2,740 could strengthen the case for a broader recovery.

US Stock Futures
US stock futures were little changed on Monday after major indexes posted weekly gains, with investors turning their attention to a busy week of corporate earnings and inflation data. S&P 500 futures rose 0.1%, while Dow Jones Industrial Average futures gained 53 points, or 0.1%. Nasdaq-100 futures slipped 0.1%.

Oil prices edged higher in early trade, adding to inflation concerns. West Texas Intermediate crude futures rose 0.9% to $92.65 a barrel, while Brent crude gained 0.8% to $105.62 a barrel.

US Treasury Notes
US Treasury trading is closed on Monday in observance of Columbus Day, although over-the-counter quotes indicated yields holding near multidecade highs. The 10-year Treasury yield hovered around 5.24%, after reaching a 24-year high near 5.36% last week. The 2-year yield stood around 4.79%, while the 30-year yield remained near 5.60%.

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Indian Shares Fall as Oil Rises; Gilt Yields Surge After Inflation Data