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Informist, Tuesday, Sept. 15, 2026

 

By Adhithya Aji

 

MUMBAI – The sentiment towards India's benchmark stock indices is expected to be bearish in the near term as elevated crude oil prices and US bond yields above 5% are likely to dampen investor sentiment. All eyes are now on the US Federal Reserve's meeting that will commence Tuesday and end Wednesday. There are heightened expectations that the US Federal Reserve will raise benchmark rates. If that happens, analysts expect global equity markets to see a sharp correction.  

 

The November futures of Brent were up 2% at nearly $108 per barrel, over 48% higher than levels before the US-Iran war started. Further pressing domestic equities was the yield on the benchmark US 10-year government bond, which rose more than 6 basis points to 5.025%. The ongoing war in West Asia continued to weigh down equities globally.

The current global environment is expected to adversely impact Indian equity markets. With crude oil prices remaining high, and with US bond yields rising to over 5%, global market participants expect on an interest rate hike. Moreover, US CPI inflation was at 0.4% in August, up from 0.1% in July, heightening rate hike expectations. As of now, nearly 95% of investors expect the US Federal Reserve to hike interest rates to 3.75-4.00%, as per the CME FedWatch tool. In India, retail inflation rose to a 20-month high of 4.82% in August, primarily due to higher food inflation 

 

"We may see further like a period of contraction because of the high interest rate in the US," Santosh Meena, head of research Swastika Investmart, said. However, the domestic market is not expected to see a sharp fall compared to its global peers, due to recent underperformance. Over a year, the Nifty 50 has fallen over 11%. If there is sharp correction after a probable interest rate hike, it is a risk that the Nifty 50 could fall below 20000 in the next one to two months, according to Meena. At the same time it will provide a great buying opportunity at lower levels. "And after a sharp fall, valuations will be reasonable and we may see some capitalisation," the analyst said.  

 

Adding to that, the September quarter earnings are expected to see a contraction in both top line and bottom line due to elevated crude oil prices, weak monsoon, and concerns about rising bond yields, Meena added.

 

As of Friday, since the beginning of 2026-27 (Apr-Mar), foreign investors sold Indian equities worth INR 1.06 trillion. Amid this, overseas investors are expected to continue selling. Analysts expect them to become net sellers once domestic markets fall sharply and trigger buying pressure at lower levels. A fall is expected if the US Federal Reserve increases interest rates. 

 

The Nifty 50 is expected to fall from current levels amid a strong view that the US Federal Reserve is likely to raise interest rates, according to Jatin Gedia, senior vice-president, technical research at Teji Mandi Investment Technologies. Gedia pegs support for the 50-stock index around 22500-22600, and 23600 is expected to act as resistance. Broader market indices fell sharply Tuesday. Small-cap and mid-cap indices ended around 2% lower each. On an overall basis, technical analysts estimate support for the Nifty around the same levels. On Tuesday, the Nifty 50 ended over 1% lower at 23118.60.  End

 

US$1 = INR 95.96

 

Edited by Avishek Dutta

 

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