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Informist, Wednesday, Sept. 2, 2026

 

By Adhithya Aji

 

MUMBAI – Benchmark indices are expected to fall further as elevated crude oil prices and higher global bond yields are expected to keep investors cautious. The war in West Asia has escalated with the US launching missile attacks on Iran this week, pushing the November futures of Brent crude oil over $95 per barrel on the Intercontinental Exchange.

 

"The deepening global bond rout, amid escalating West Asia tensions and bets that central banks will need to tighten monetary policy, has gripped investor sentiment in fear," Vinod Nair, head of research at Geojit Investments, said in a note. Crude oil prices were over 30% higher than pre-war levels. Such elevated prices have been weighing down equities, which have been consolidating for several weeks. Another escalation in the war will push crude oil prices significantly higher, according to analysts. 

 

Other than West Asia, the situation in Ukraine is also getting worse, keeping the markets volatile. "...given that, right now may not be the right time to invest in the market," Vinit Bolinjkar, head of research at Ventura Securities, said. He advised market participants to wait and watch to see what happens and take a call on the prevailing market structure. He expects the Reserve Bank of India to keep the interest rates unchanged as he sees the rupee to appreciate on the back of inflows from foreign currency non-resident deposits.

 

The outlook for global equities remains positive, supported by earnings growth and structural artificial intelligence demand, according to IDBI Capital Equity Research. "However, upside may be constrained in the near term by elevated valuations in US technology and AI related names, sticky inflation and the risk of additional (US) Fed tightening, geopolitical tensions and potential trade frictions," the brokerage said. A sharper-than-expected rise in crude oil prices and bond yields, deterioration in AI spending momentum, or further escalation in geopolitical tensions could trigger broader risk-off moves, IDBI Capital said. 

 

Foreign institutional investors were net buyers of Indian equities Tuesday. They bought shares worth INR 11.43 billion. "They (foreign investors) ceased to be of importance because their role in the market has become very opportunistic," Bolinjkar said. The AI trade in other markets is pulling away foreign investors from India and once that cools off, India can actually see some hope in the return of foreign institutional investors, he added. 

 

Wednesday, the Nifty ended 0.4% lower at 23914.45 points, closing below 24000 for the first time in over a month. "The overall trend of Nifty remains weak. The ongoing bearish pattern like lower tops and bottoms signal sell on rise opportunity on any pullback from here," Nagraj Shetti, senior technical research analyst at HDFC Securities, said in a note. Technical analysts have pegged the support for the index at around 23700-23800, and the resistance at 24100-24200.  End

 

US$1 = INR 94.97

 

Edited by Shubhayan Bhattacharya

 

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