Market Wrap: Indian Shares Fall as Oil Spike, Global Bond Rout Revives Inflation Concerns

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

September 2, 2026 at 1:12 PM IST

Indian benchmark shares fell for a third consecutive session on Wednesday, tracking a broader global sell-off as renewed US-Iran strikes heightened concerns over disruptions to oil flows and revived inflation fears. The Nifty 50 fell 0.59% to 23,914.45, while the Sensex shed 0.49% to 76,570.35, paring sharper losses seen before the closing auction. The benchmarks have now declined around 5% since the Iran war began more than six months ago.

Brent crude rose 0.3% to around $95 a barrel after touching a near-six-month high earlier in the session, as the latest escalation between the US and Iran raised concerns over prolonged supply disruptions in West Asia. India, the world's third-largest crude importer and consumer, remains particularly vulnerable to higher oil prices, which could raise inflation, weigh on growth and widen the import bill.

The rise in crude oil also fuelled a global bond sell-off, with borrowing costs climbing to multi-decade highs on concerns that persistent inflation could delay monetary easing. Higher US interest rates make emerging-market assets less attractive to global investors, adding to pressure on Indian equities. Eleven of the 16 major sectors declined, while the Nifty MidCap and Nifty SmallCap indices fell 0.53% and 0.37%, respectively.

The Nifty Auto index fell around 2% to emerge as the worst-performing sector, while Nifty IT and Media also underperformed. Nifty Oil and Gas, PSU Bank and Realty indices bucked the broader weakness. Eicher Motors, Wipro and Bajaj Auto were among the top Nifty 50 losers.

The Indian rupee ended marginally weaker after paring a sharp intraday rally triggered by dollar inflows linked to Capri Global Capital's maiden US dollar bond issue. Continued Reserve Bank of India intervention and foreign-bank flows helped cushion pressure from elevated crude prices and US Treasury yields.

Indian government bonds weakened as the rise in crude prices revived concerns over prolonged supply disruptions in West Asia. The yield on the benchmark 6.94%, 2036 bond rose to 6.9754% from 6.9581% on Tuesday, moving closer to the 7% mark as investors assessed the inflation and rate outlook.

Top Movers of the Day

Eicher Motors fell 3.53% to ₹7,689 after August sales data triggered profit-taking. Although domestic demand remained resilient, export dispatches declined sharply and modest channel-filling ahead of the festive season added to concerns. The stock also slipped below its 50-day moving average of ₹7,740.

Hero MotoCorp declined 4.95% to ₹5,280 after August sales data and profit-taking weighed on the stock. Analysts pointed to weaker exports, logistics frictions and technical selling after the stock fell below its 200-day moving average.

Infosys dropped 2.18% to around ₹1,115–₹1,120, while the IT sector remained weak. The selling followed a rise in global bond yields and concerns that higher-for-longer interest rates could delay technology-spending recovery.

Tata Consultancy Services fell 2.03% to around ₹2,335–₹2,340, tracking the wider IT sell-off. The stock faced pressure as investors reduced exposure to export-oriented technology companies amid global rate and demand concerns.

Wipro slipped nearly 1.8% to around ₹178-₹179, with the stock dragged down by weakness across Indian IT. The sector was pressured by higher US yields and caution ahead of major technology-company earnings and macroeconomic data.

Shriram Finance declined 4.58% to ₹1,059.10, emerging as one of the key Nifty laggards. The NBFC was hit by broad financial-sector selling as rising crude and bond yields raised concerns about inflation, funding costs and future loan growth.

Maruti Suzuki fell 4.41% to ₹12,950 as auto stocks came under pressure. Higher crude prices increased concerns over fuel costs and inflation, while investors booked profits after the stock’s recent gains.

Nestle India declined 3.90% to ₹1,438.20, despite its defensive profile. FMCG stocks faced profit-taking as investors reduced exposure to consumption counters and the broader market moved sharply lower.

Asian Paints fell around 3-4%, joining the consumer and FMCG sell-off. The stock was pressured by the broader risk-off move, with higher crude also raising concerns about input-cost pressure for paint manufacturers.

Bharat Electronics declined around 2%, despite remaining a preferred defence-sector name. The stock was pulled down by broad market selling, with investors booking profits in large-cap PSU and defence counters.

Power Grid Corporation gained around 1% to ₹264–₹265, outperforming in a weak market as investors rotated into defensive utilities. The stock benefited from relative safety while IT, auto and consumption names saw heavier selling.

NTPC rose around 1% to ₹349–₹350, also gaining against the market trend. The move reflected defensive buying in power utilities, although the sector’s gains were modest and largely driven by rotation rather than a fresh company-specific trigger.

Futures & Options
The Nifty September 2026 futures closed at 23,994, a premium of 79.55 points over the Nifty 50’s cash-market close of 23,914.45. The Nifty declined 141.35 points, or 0.59%, during the session, while the NSE’s India VIX fell 1.34% to 11.34, indicating a modest easing in near-term volatility.

Reliance Industries, HDFC Bank and Bombay Stock Exchange (BSE) 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 off the day’s low as traders covered short bets prompted by slight fall in crude prices during the day. However, the overnight surge in crude kept gilts from any gains.

The benchmark 6.94%, 2036 bond ended at 6.9754%, up from 6.9581% on Wednesday. During the day, it touched the high of 7.0013%.

Brent crude rose overnight 3% to above $95 a barrel, fuelling concerns that oil prices could persists above psychologically crucial level of $95 if tensions in West Asia continues. Towards the end of India market hours, it inched towards $94 per barrel, prompting short covering.

Forex
The Indian rupee ended marginally weaker on Wednesday after paring a sharp intraday rally triggered by dollar inflows linked to Capri Global Capital's maiden US dollar bond issue, with continued Reserve Bank of India intervention and foreign-bank flows cushioning pressure from elevated crude prices and US yields.

The rupee settled at ₹94.9700/$1, compared with₹94.9500/$1 on Tuesday. In the interbank market, it opened at ₹94.8900/$1 and moved in a ₹94.8200-94.9775/$1 range during the session.

Crypto
Bitcoin traded near $76,500 after falling more than 1% since midnight UTC and 3% over the past week, as intensified US strikes on Iranian targets weighed on risk sentiment.

Despite the decline, Bitcoin futures positioning remained light. Open interest was broadly unchanged at around 700,000 Bitcoin, well below this year’s peak of 801,000, indicating limited appetite to add leveraged short positions.

Ether showed a different trend, with open interest rising as prices declined, suggesting fresh short positions. Ether futures open interest climbed to 13.72 million tokens, its highest since August 18, though still below May’s record of 15.68 million.

US Stock Futures
US stock futures edged lower on Wednesday as the 10-year Treasury yield climbed to its highest level in nearly three years, adding to concerns over inflation and tighter financial conditions. The yield touched 4.814% intraday, its highest since November 2023.

Dow futures slipped 66 points, or 0.1%, while S&P 500 futures fell 0.2%. Nasdaq-100 futures declined 0.6%, with technology stocks facing greater pressure from rising yields.

The bond sell-off extended across global markets. Germany’s 10-year yield rose to 3.39%, putting it on track for its highest close in about 15 years. Borrowing costs in France and Japan also moved higher, reflecting broad investor concerns over inflation, elevated oil prices and the prospect of further monetary tightening.

US Treasury Notes

Global bond yields rose sharply on Wednesday as escalating Middle East tensions pushed oil prices higher and revived concerns over persistent inflation. The 10-year US Treasury yield climbed to 4.81%, while Germany’s 10-year bund yield reached 3.375%, its highest since 2011. Japan’s 10-year yield remained above 3%, a three-decade high, while the UK and Australian 10-year yields rose to 5.25% and 5.198%, respectively.

The sell-off reflected growing expectations of tighter monetary policy. Markets are increasingly pricing in a Federal Reserve rate increase at its September 16 meeting, following hawkish signals from Chair Kevin Warsh. The European Central Bank is also expected to raise rates as inflation pressures remain elevated.

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