Indian benchmark indices witnessed a sharp decline on Monday after recording their longest weekly losing streak since 2020 last Friday. Rising crude oil prices and a jump in global bond yields following
US President Donald Trump’s rejection of Iran’s latest proposal weighed on investor sentiment.
The BSE Sensex fell 1,063 points, or 1.43%, to 72,832, while the NSE Nifty 50 declined 333 points, or 1.4%, to 22,807. The combined market capitalisation of BSE-listed companies dropped by ₹5.82 trillion to ₹476.06 trillion from ₹481.88 trillion in the previous session.
All sectoral indices traded lower in early deals, while broader markets also faced selling pressure, with both midcap and smallcap indices declining around 1%.
Oil prices and global yields pressure markets
Market experts said elevated crude prices and rising US bond yields were creating challenges for equities. Brent crude on Monday was trading at over $107 while the US 10-year bond yield hovered around 5.2%, turning out be major concerns for markets.
The latest pressure came after Trump rejected Iran’s proposal to reopen the Strait of Hormuz and end the conflict, while Tehran maintained that diplomacy remained the only solution. The uncertainty affected global equity, oil and bond markets.
Most Asian markets also declined, with South Korea falling 2% and Japan’s Nikkei slipping 0.10%. Chinese markets were down more than 1%.
Higher oil prices could increase inflation risks and widen India’s current account deficit, given the country’s dependence on crude imports.
Foreign investors turn sellers again
Bond markets also came under pressure as investors reacted to inflation concerns. US two-year bond yields increased five basis points to 4.90%, while 10-year yields rose four basis points to 5.20%.
Higher yields reduce the attractiveness of emerging markets such as India. Foreign portfolio investors (FPIs), who were net buyers in July and August, sold Indian equities worth ₹17,131 crore in September, taking total outflows for the year to ₹2.41 trillion.
