Indian Equities Fall to Six-Week Low as Rate Hike Fears Weigh

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

September 7, 2026 at 1:24 PM IST

Indian equities fell to a six-week low on Monday as IT stocks led losses amid rising expectations of a rate hike in the US and renewed geopolitical tensions in West Asia. The Nifty50 fell 0.50% to 23,779.15, while the Sensex declined 0.50% to 76,132.81. The benchmarks have now fallen 2.7% and 2.5%, respectively, over the past four weeks as higher oil prices and global bond yields pressured equities. Fourteen of the 16 major sectors ended lower.

The Nifty IT index fell 2.3% after stronger-than-expected US jobs data reinforced expectations of a rate hike in September by the Federal Reserve. Higher US rates could weigh on technology spending and hurt Indian IT companies that derive a significant share of revenue from the US. Nifty Metal, PSU Bank, Realty and Media also underperformed, while Pharma and Healthcare gained. Infosys, SBI Life Insurance and HDFC Life Insurance were among the top Nifty50 losers. The Nifty MidCap fell 0.46%, while the SmallCap index was broadly flat.

Brent crude rose 0.6% to $96.80 a barrel after US and Iran struck vessels sailing through the Strait of Hormuz and other areas, raising concerns over energy supplies and adding to inflation risks. Higher crude prices, combined with elevated global bond yields, have increased concerns over tighter monetary conditions and kept risk appetite subdued.

The Indian rupee ended unchanged at 94.4850 per US dollar, with sustained intervention by the Reserve Bank of India offsetting pressure from higher oil prices. The currency traded within a narrow range of around 10 paise, with state-run banks seen selling dollars, likely on behalf of the RBI.

Indian government bonds ended slightly as banking-system liquidity remained in a surplus of more than 10 trillion rupees. Brent crude easing below $97 a barrel during the session also provided some relief. The yield on the benchmark 6.94%, 2036 bond fell to 6.9607% from 6.9625% on Friday. Trading remained subdued amid a lack of domestic cues, while investors continued to weigh the possibility of additional RBI liquidity-absorption measures this week versus waiting for the October monetary policy meeting.

Top Movers of the Day

Strides Pharma Science surged 10.04% to ₹1,166, after the company posted strong performance in recent quarters and on USFDA clearance about closure of inspections for its flagship Bengaluru facility with favourable outcome.

GMM Pfaudler rose 7.67% to ₹1,236 on strong volume buying, after it reported its consolidated profit after tax rose 118% year-on-year to ₹220 million for April-June quarter.

Sterlite Technologies gained 5% to ₹786.30, extending its recent rally amid continued buying in optical-fibre and connectivity stocks. Share prices surged following a massive 30 billion rupees capital expenditure plan and ambitious AI-driven growth targets.

ICICI Bank was flat to marginally higher at around ₹1,423.60 after LIC received RBI approval to acquire a 9.99% stake in the private lender. The strategic investment supported the stock, although broader market weakness capped gains.

Tata Motors Passenger Vehicles fell 1.33% today to ₹307.35 due to ongoing investor caution regarding tight profit margins and luxury unit Jaguar Land Rover (JLR) facing high warranty costs, heavy discounts, and intense competition.

HCL Technologies declined 1% to ₹1,281.50, tracking weakness across IT stocks as higher US bond yields and renewed rate-hike expectations weighed on export-oriented technology companies.

Tata Consultancy Services fell 1.3% to ₹2,274.10, dragged lower by broad-based selling in IT stocks amid concerns that higher US interest rates could delay a recovery in technology spending.

Infosys fell 3.78% to ₹1,087.30, leading losses in the IT sector as stronger US jobs data increased expectations of higher-for-longer interest rates and weighed on technology stocks.

Zee Entertainment Enterprises declined 6.42% to ₹85.13 driven by a new Central Bureau of Investigation case against its founder Subhash Chandra. LIC Housing Finance had filed a complaint regarding alleged ₹13.22 billion loan fraud involving false and inflated net-worth documents.

Manappuram Finance fell around 4.44% to ₹325, pressured by profit-taking and also due to a sharp decline in gold and silver prices.

PVR INOX fell around 6.13% to ₹1,152 on reports that the company asked a senior executive to leave following an internal probe into alleged kickbacks involving developers of cinema properties.

Futures & Options
The Nifty September 2026 futures closed at 23,866.10, a premium of 86.95 points over the Nifty 50's cash-market close of 23,779.15. The Nifty fell 118.55 points, or 0.50%, during the session, while the NSE's India VIX rose 5.61% to 11.28, indicating higher expectations of near-term volatility.

HDFC Bank, Infosys and Reliance Industries were the most-traded individual stock futures contracts on the NSE. The September 2026 F&O contracts will expire on 29 September.

Bonds
Indian government bonds ended largely steady on Monday as a banking system liquidity surplus of more than 10 trillion rupees and softer Brent crude prices offered some support. The benchmark 6.94%, 2036 bond yield eased to 6.9607% from 6.9625% on Friday.

Trading remained range-bound on thin volumes due to a lack of fresh domestic cues. Market participants remained divided over the timing of further Reserve Bank of India liquidity absorption measures, with some expecting action during the week and others looking towards the October policy meeting.

Banks, despite holding surplus cash, remained cautious about adding gilts amid liquidity concerns. Expectations of a higher August inflation print also capped demand, with some traders seeing the 10-year yield rising to 7.05–7.10% by end-September. Shorter-duration bonds found modest demand from banks for their held-to-maturity books, while traders positioned for a narrowing five-year–10-year yield spread.

Forex
The Indian rupee ended unchanged at 94.4850 per US dollar on Monday, trading in a narrow 10-paisa range as sustained Reserve Bank of India intervention offset pressure from elevated oil prices.

Bankers reported consistent dollar sales by state-run banks, likely on behalf of the RBI, continuing a pattern seen over the past two weeks. Brent crude remained near six-week highs at around $96.60 a barrel, as strikes on vessels sailing through the Strait of Hormuz heightened concerns over energy flows and limited the rupee's upside.

Crypto
The cryptocurrency markets remained relatively stable on Monday, with Bitcoin holding around the $79,000-$80,000 range and Ethereum trading near $2,500 as investors assessed stronger-than-expected August US jobs data and its implications for interest rates.

The robust payrolls report has increased expectations of tighter US monetary policy, with September rate-hike odds rising to around 58%, creating a headwind for risk assets. However, digital assets have shown resilience, supported by continued institutional demand through spot ETFs and expectations around regulatory developments, including the Senate's upcoming vote on the CLARITY Act.

US Stock Futures
US stock futures were slightly lower and mixed on Monday, with E-mini-S&P 500 futures down around 0.4%, as investors assessed stronger-than-expected August jobs data and its implications for the Federal Reserve's interest-rate outlook. Nonfarm payrolls rose 162,000 while the unemployment rate held at 4.1%, pointing to continued resilience in the labour market, while wage growth of 0.3% month-on-month indicated steady earnings growth.

The stronger jobs data has raised questions over whether the Fed could keep rates higher for longer. Meanwhile, cash equity markets including the New York Stock Exchange and Nasdaq are closed today for the Labor Day holiday, limiting trading activity.

US Treasury
US Treasury note yields were unchanged on Monday as fixed-income markets remained closed for the Labor Day holiday, leaving yields at Friday's levels. The benchmark 10-year Treasury yield ended Friday at 4.79%, while the two-year yield settled at 4.37%.

Top News