Benchmark equity indices Sensex and Nifty declined in early trade on Monday (August 31, 2026) as renewed tensions in West Asia triggered a rebound in crude oil prices.

Weak trends in the global markets and foreign fund outflows also dented investors’ sentiment during the initial trading, market analysts said.

The 30-share BSE Sensex declined 226.60 points to 77,028.56 during initial trade. The 50-share NSE Nifty dropped 120.40 points to 24,053.55.

Also read: West Asia LIVE updates

Among the 30 Sensex firms, Infosys, Tata Steel, InterGlobe Aviation, Bajaj Finance, Tata Consultancy Services and Titan were among the major laggards.

HDFC Bank climbed over 2%. Kotak Mahindra Bank and Bharti Airtel were also among the gainers.

Brent crude, the global oil benchmark, traded 2.33% higher at $90.19 per barrel.

“This week’s trading begins with the market facing a few headwinds. From the global equity market perspective, the sentiments have turned slightly negative following the Fed chief Kevin Warsh’s statement that if inflation persists at rates higher than the Fed’s long-term target, ‘we have work to do’.

“The market has taken this as an indication of a rate hike in the FOMC (Federal Open Market Committee) meeting scheduled for September 15-16. The consequent rise in bond yields is negative for equity markets. Another headwind is the renewed escalation of tensions between the U.S. and Iran pushing the Brent crude above $90,” V K Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said.

In Asian markets, South Korea’s Kospi, Japan’s Nikkei 225 index, Shanghai’s SSE Composite index and Hong Kong’s Hang Seng index traded lower.

U.S. markets ended in negative territory on Friday (August 28, 2026).

“Indian equity markets are expected to trade with a cautious bias as renewed US-Iran military escalation revives concerns over global energy supplies, triggering a rebound in crude oil prices and prompting a broader risk-off tone across Asian markets. Japan’s Nikkei and South Korea’s Kospi were both down more than 1 per cent in early trade, reflecting investors’ renewed focus on geopolitical risks,” Ponmudi R, CEO of Enrich Money, an online trading and wealth-tech firm, said.

Foreign Institutional Investors (FIIs) offloaded equities worth ₹5,039.80 crore on Friday (August 28, 2026), according to exchange data.

On Friday (August 28, 2026), the Sensex climbed 330.92 points, or 0.43%, to settle at 77,264.51. The Nifty settled 84.80 points, or 0.35%, higher at 24,175.65.

Oil prices tumbled to a more than three-month low on Monday (June 15, 2026) as Iran and the United States agreed on a peace deal – potentially putting an end to the more than hundred-day conflict in the West Asian region that caused the closure of the Strait of Hormuz.

When trade commenced on Monday (June 15, 2026), Brent crude futures (August) had slipped nearly 5% at $87.33 per barrel – its lowest level in more than three months.

Similarly, West Texas Intermediate (WTI) had also declined 5.73% to touch a similar low at $80.01 per barrel.

At the time of writing, Brent crude futures (August) had recovered from the earlier low but were still more than 4.44% lower at $83.45 per barrel.

WTI crude futures were more than 5% lower at $80.61 per barrel.

In a late-night announcement (Indian Standard Time), U.S. President Donald Trump announced that the peace deal with Iran was “complete”.

“The deal with the Islamic Republic of Iran is now complete,” he wrote on his social media, adding, “I hereby fully authorise the toll-free opening of the Strait of Hormuz, and simultaneously herewith, authorise the immediate removal of the United Naval blockade. Ships of the World, start your engines. Let the oil flow!”

The deal is scheduled to be signed in Geneva on Friday (June 19, 2026).

Declining for the ninth consecutive session, the rupee depreciated 13 paise to close at a fresh lifetime low of 96.83 (provisional) against the U.S. dollar on Wednesday (May 20, 2026) as elevated global crude prices amid the West Asia crisis stoked inflation worries.

At the interbank foreign exchange market, the rupee opened at 96.89 against the U.S. dollar, then lost further ground to touch a record low of 96.95 and a high of 96.65, before settling at 96.83 (provisional), registering a fall of 13 paise over its previous close.

In the previous session, the rupee tumbled 50 paise to settle at 96.70 against the dollar.

“Indian rupee hit fresh lows on a strong dollar and a surge in U.S. treasury yields. U.S. 30-year treasury yields rose to a two-decade high, while the 10-year yields rose to a 16-month high.

“This led to inflation worries and sell-off in global markets, making the markets risk-averse,” said Anuj Choudhary, Research Analyst, Commodities Research at Mirae Asset Sharekhan.

“We expect the rupee to trade with a negative bias on risk aversion in the global markets amid inflation worries. A strong dollar and rising U.S. Treasury yields raised inflation concerns and trimmed rate cut expectations. USD/INR spot price is expected to trade in a range of ₹96.5 to ₹97.10,” he added.

The rupee’s sharp decline has emerged as one of the biggest economic warning signs for policymakers, investors and businesses. Once considered among Asia’s more stable currencies, the rupee has now become one of the worst-performing emerging market currencies this year, pressured by a toxic mix of expensive oil, capital outflows, widening trade deficits and a surging U.S. dollar.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 99.42, higher by 0.09%.

Brent crude, the global oil benchmark, was trading down 2.77% at $109.95 per barrel in futures trade.

The U.S. Senate advanced legislation on Tuesday (May 19, 2026) that seeks to force President Donald Trump to withdraw from the Iran war, as a growing number of Republicans defied Trump’s wishes.

On the domestic equity market front, Sensex rose by 117.54 points to settle at 75,318.39, and Nifty was up 41 points to 23,659.

Foreign Institutional Investors turned net sellers after three sessions of buying and offloaded equities worth ₹2,457.49 crore on Tuesday (May 19, 2026), according to exchange data.