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Informist, Monday, Sept. 21, 2026

 

By Adhithya Aji

 

MUMBAI – Benchmark stock indices are expected to post some recovery in the short term as easing crude oil prices provide some relief to Indian markets. Crude oil prices were down over 3%, slightly above the psychological mark of $100 per barrel. Easing of crude oil prices is likely to improve the earnings outlook for companies and ease inflation concerns. However, developments in the war in West Asia and interest rate expectations are likely to drive investor sentiment. 

 

Markets are still expecting the Reserve Bank of India to follow the path of its global peers on interest rates. The US Federal Reserve hiked the interest rate by 25 basis points last week. India's central bank is expected to raise interest rates if crude oil prices remain higher and inflation expectations increase, Motilal Oswal Financial Services said in a report. The Bank of Japan and European Central Bank hiked benchmark rates as well, while the Bank of England kept them unchanged but took a cautious stance.

 

Post an interest rate hike, banks could be relatively better placed as their floating-rate loans can be repriced, while stronger deposit franchises could provide some support against higher funding costs. Meanwhile, non-banking financial services companies could face pressure because of their higher dependence on wholesale funding refinancing. "Real estate, automobiles, consumer durables and highly leveraged businesses could also be more sensitive to higher borrowing costs," Motilal Oswal said in a report. 

 

At 1641 IST, the November futures of Brent crude oil were down nearly 3% at $101.09 per barrel. Over the last seven days, energy prices fell over 3%. "The easing of concerns around inflation and energy costs has supported a broad-based recovery across sectors and supported overall market sentiment," Vinod Nair, head of research at Geojit Investments, said in a note. However, energy prices were nearly 40% higher than the levels before the start of the war in West Asia. Earlier, analysts had estimated a comfortable level of crude oil prices for India around $75–$80 per barrel. Oil prices recently shot up to nearly $110 per barrel, before coming off highs.      

 

The recent escalation in the war in West Asia has had a large impact on India. The recent Iran-backed Houthi attacks on key oil infrastructure of Saudi Arabia led to oil supply disruptions in the region. The Houthi attacks disrupted Saudi Arabia's East-West pipeline, and crude supply in the region fell to a three-decade low of 6 million barrels per day in August, according to JM Financial Institutional Equities. The attacks escalated to an oil infrastructure facility in Riyadh as well. "Following the pipeline attack, Saudi Aramco has reportedly suspended crude supplies to Indian refiners, forcing refiners to seek replacements at higher oil and freight costs," the brokerage said.

 

Technical analysts expect the Nifty to gain as easing crude oil prices provide relief. The stance on the Nifty 50 has turned bullish due to a fall in energy prices, according to Jatin Gedia, senior vice president, technical research at Teji Mandi Investment Technologies. If the Nifty 50 sustains above 23300-23350 levels, the 50-stock index is expected to touch 23750, Gedia said. Support for the Nifty 50 is seen at 23300-23270, while resistance is expected at around 23650-23750, according to technical analysts.  End

 

US$1 = INR 95.82

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

 

Edited by Himanshi Gupta

 

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