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Informist, Tuesday, Sept. 8, 2026

 

By Adhithya Aji

 

MUMBAI – Benchmark indices are expected to fall further from current levels as fresh escalations in West Asia pushed crude oil prices above $99 per barrel. Iran-backed Houthi rebels in Yemen attacked Saudi Aramco oil facilities in Saudi Arabia Tuesday, adding to the conflict in the region while the war between the US and Iran drags on. 

 

At 1721 IST, the November futures of Brent crude oil were at $98.63 per barrel, up nearly 2% from Monday. It had risen nearly 3% to an intraday high of $99.46. Higher prices are a huge concern for the Indian economy as the country imports around 90% of its crude oil requirements. The June quarter earnings were better than expected despite higher crude oil prices during that period. If crude oil prices moves above $100 per barrel, it might pose a challenge to the September quarter earnings, Vinod Nair, head of research at Geojit Investments, said in a note.

 

Apart from elevated crude oil prices, concerns over an interest rate hike by the US Federal Reserve, and rising bond yields globally, another major reason for weakness in Indian equities is the slew of initial public offerings lined up that are expected to do well, according to V.K. Vijayakumar, chief investment strategist at Geojit Investments. Vijayakumar said retail investors are ankling to bid for the new public issues. Around 70% of the initial public offerings so far this year have done well, he said. "So we have a very strange situation where the secondary market is performing poorly, but the IPO market is booming," he said, adding, "There is an element of bubble in the IPOs itself, as valuations are high."

 

Large-caps are trading at a valuation lower than the historical average, which is below 20 price-to-earnings now, whereas mid-cap and small-cap indices are at a premium to historical valuations, Vijayakumar said. This is a big premium over large-caps, which is not sustainable, he said. "This will run for some time but then you can expect a reversal soon, perhaps by the time the NSE IPO is over," he said. Vijayakumar expects flows to head back into the secondary markets after the National Stock Exchange of India Ltd.'s public issue is over. 

 

Tuesday, the Nifty 50 hit an over one-month low of 23623.10. The immediate support for the index is now seen at 23450-23606, while the resistance is seen around 23760-23850, according to Jatin Gedia, senior vice president of technical research at Teji Mandi Investment Technologies. He said the overall trend of the blue-chip index is weak and a reversal is possible only once it goes above 23850. Gedia expects the index to remain weak in the near-term. Tuesday, the Nifty 50 ended at 23635.10, 144 points or 0.6% lower than Monday.  End

 

US$1 = INR 94.81

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Shubhayan Bhattacharya

 

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