Benchmark indices Sensex and Nifty tumbled in early trade on Monday (May 18, 2026) amid surging oil prices, weak global market trends after fresh escalation in tensions in West Asia.

A drone attack targeted the Barakah nuclear facility in the United Arab Emirates (UAE) on Sunday (May 17, 2026), marking a dangerous escalation in the West Asia conflict.

The 30-share BSE Sensex tanked 833.20 points to 74,404.79 in early trade. The 50-share NSE Nifty dropped 234 points to 23,401.70.

From the 30-Sensex firms, Tata Steel, Power Grid, Maruti, Trent, Titan and HDFC Bank were the biggest laggards.

Infosys, Tech Mahindra, Bharti Airtel and Tata Consultancy Services were the winners.

Brent crude, the global oil benchmark, traded 1.79% higher at $111.2 per barrel.

“Brent crude has spiked to USD 111 on absence of initiatives to open the Strait of Hormuz,” V.K. Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said.

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

U.S. markets ended over 1% lower on Friday (May 15, 2026).

“Global risk appetite weakened sharply after fresh escalation fears emerged in the Middle East. US President Donald Trump’s warning urging Iran to ‘get moving, FAST’ has once again revived concerns around a possible disruption in global crude oil supply routes, particularly around the Strait of Hormuz,” Hariprasad K, Research Analyst and Founder, Livelong Wealth, said.

For Indian markets, the biggest concern continues to remain elevated crude oil prices and currency pressure, he added.

Foreign Institutional Investors (FIIs) bought equities worth ₹1,329.17 crore on Friday, according to exchange data.

“U.S. President Donald Trump issued a fresh warning stating that the ‘clock is ticking for Iran’, signaling growing impatience over the pace of negotiations and increasing uncertainty surrounding the ongoing US–Iran situation and the Strait of Hormuz. This continues to remain a key overhang for global financial markets,” Ponmudi R, CEO of Enrich Money, an online trading and wealth-tech firm, said.

On Friday (May 15, 2026), the Sensex dropped 160.73 points, or 0.21%, to settle at 75,237.99. The Nifty settled lower by 46.10 points, or 0.19%, at 23,643.50, snapping its two-day gaining streak.

The rupee depreciated 11 paise to 94.27 against U.S. dollar in early trade on Monday (April 27, 2026) driven by persistent dollar demand and a broader shift toward safe-haven assets.

Forex traders said the Indian rupee has hit a rough patch, falling for five consecutive sessions, weighed down by a combination of factors such as the RBI loosening its grip on currency rules and rising oil prices caused by global tensions.

Moreover, investors are becoming cautious again, with foreign institutions pulling money out of the market after a brief period of buying amid rising geopolitical uncertainty.

At the interbank foreign exchange market the rupee opened at 94.25 against the U.S. dollar, then lost some ground and touched 94.27 against the U.S. dollar in initial trade, registering a fall of 11 paise over its previous close. On Friday (April 24, 2026), the rupee had settled at 94.16 against the American currency.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was down 0.09% at 98.44.

Brent crude, the global oil benchmark, was trading higher by 1.16% at $106.55 per barrel in futures trade.

A mix of softer economic signals and renewed, even if fragile, hopes of diplomacy pulled the dollar lower again, CR Forex Advisors MD Amit Pabari said, adding that for Rupee, on one hand, a softer dollar offers relief. On the other, uncertainty remains the dominant force.

Meanwhile, India’s forex reserves have crossed $703 billion as of April 17, reflecting a consistent build-up of buffers.

“For now, the rupee continues to lean toward gradual weakness. Uncertainty remains the dominant force, shaping both global flows and local reactions,” Mr. Pabari said.

He further noted that any dips are likely to be bought into, with the 92.80–93.20 zone acting as a strong support. On the upside, 93.50 to 94.50 is expected to define the near-term range.

On the domestic equity market front, the 30-share benchmark index Sensex was trading 518.96 points or 0.68% higher at 77,183.17, while the broader Nifty was trading up 131.30 points or 0.55% at 24,029.25.

Foreign Institutional Investors offloaded equities worth ₹8,827.87 crore on Friday (April 24, 2026), according to exchange data.

U.S. President Donald Trump told reporters ‌on Friday (April 10, 2026) that the U.S. will have ​the Strait of Hormuz “open fairly soon” ⁠but did not elaborate and acknowledged that it will not be an easy step.

Mr. Trump also suggested that ‌other countries were offering help but did not identify any nation.

“Other countries use ‌the strait. So we do have ‌other countries ⁠coming up, and they’ll help out,” ⁠Mr. Trump said.

French ​President Emmanuel Macron will convene a call ‌with leaders of the Group ​of Seven on Wednesday (March 11, 2026) to ⁠discuss the Iran crisis and rising energy prices, the French president’s office said. The ‌talks come as G7 governments weigh how to respond ‌to a sharp rise in ‌oil ⁠prices triggered by the ⁠U.S.-Israeli war on Iran.

G7 energy ministers stopped short of agreeing on a release of strategic ​oil reserves on ‌Tuesday and instead asked the International Energy Agency to assess the situation before acting.

Benchmark oil prices surged ‌to almost four-year highs on Monday ​but prices plummeted 11% on Tuesday after U.S. President Donald ⁠Trump predicted the war in the Middle East could end soon. U.S. officials ‌are also weighing steps to keep oil flowing through the Strait of Hormuz, including providing naval escorts for commercial vessels and backstopping war risk insurance for tankers, as ‌Washington seeks to reassure shippers and ​prevent further disruption to global energy supplies.

The G7 comprises the ⁠United States, Canada, Japan, Italy, Britain, Germany ⁠and France.

France is the current G7 chair.

The rupee declined 12 paise to settle at 86.52 (provisional) against the U.S. dollar on Friday (July 25, 2025), tracking negative domestic equity markets and surging global crude oil prices.

A strengthening American currency overseas and foreign fund outflows further weighed on the local unit, forex traders said.

At the interbank foreign exchange, the domestic unit opened at 86.59 and hit the lowest level of 86.63 against the greenback. The unit touched the intra-day peak of 86.47 before ending the session at 86.52 (provisional), registering a loss of 12 paise from its previous closing level.

On Thursday (July 24, 2025), the rupee saw some initial recovery but ended the session just 1 paisa higher at 86.40 against the U.S. dollar.

Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan, said the rupee weakened due to a surge in crude oil prices and weakness in the domestic markets, which also fuelled the withdrawal of foreign institutional investors.

He said the rupee is expected to trade with a slight negative bias amid uncertainty ahead of the August 1 trade deal deadline and geopolitical tensions between Thailand and Cambodia.

“Traders may take cues from the durable goods orders data from the US. Investors may remain cautious ahead of the US Federal Reserve and Bank of Japan’s monetary policy decisions next week. USD-INR spot price is expected to trade in a range of Rs 86.30 to Rs 86.90,” Choudhary added.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.33% to 97.44.

Analysts attributed the recovery in the dollar index to favourable employment data in the U.S.

Brent crude, the global oil benchmark, went up by 0.42% to $69.47 per barrel in futures trade, as developing trade agreements have supported the upward movement in Brent oil prices.

Forex traders said the uncertainty over the India-US trade deal has been an overhang for the forex market.

If the discussions fail or get delayed, Indian exporters could face fresh pressure — adding to the rupee’s challenges.

However, if a deal is reached, it could offer a much-needed breather. Until then, the uncertainty is likely to keep market participants cautious.

Meanwhile, in the domestic equity market, Sensex crashed 721.08 points or 0.88% to 81,463.09, while Nifty tanked 225.10 points or 0.90% to 24,837.

Foreign institutional investors (FIIs) offloaded equities worth ₹2,133.69 crore on a net basis on Thursday, according to exchange data.