India’s equity market is likely to remain under pressure in the coming week as rising crude oil prices in the wake of escalating US-Iran tensions are likely to continue weighing on investors' sentiment. For the week, the Nifty 50 declined around 1.15% to close at 23,897.70, while the Sensex fell nearly 1.0% to settle at 76,515.43.
The two benchmark indices witnessed their fourth consecutive weekly decline, showing the extent of impact global cues are having on the domestic market.
Ajit Mishra – SVP, Research, Religare Broking Ltd, said that renewed geopolitical tensions and a sharp rise in crude oil prices remained the biggest headwinds for Indian equities during the week. Brent crude gained around 8% during the week and remained close to US$95 per barrel as escalating tensions involving the United States and Iran increased concerns over potential disruptions to energy supplies through the Strait of Hormuz.
He added that the coming week is expected to remain highly sensitive to global monetary policy, crude oil prices and geopolitical developments. Investors will closely monitor the impact of the stronger-than-expected US employment data on expectations regarding the Federal Reserve's September policy decision. Any renewed increase in bond yields or the US dollar could put additional pressure on emerging-markets, said Mishra.
“The market enters the coming week with a cautious outlook as high crude oil prices, geopolitical uncertainty and changing expectations on US monetary policy continue to affect investor sentiment. While strong GDP growth, healthy GST collections and resilient domestic demand provide support,” he added.
In the past one month, the Nifty50 index has declined about 3% while the year-to-date decline is around 9%. India has emerged as one of the worst-performing major equity markets globally in 2026 and has given negative returns in the last two years during which it faced multiple concerns such as AI disruption, US tariffs, FII outflow and the latest US-Iran crisis.
Brent crude breaching the $95 a barrel again is seen as a big setback for the country and its market. For an oil-importing economy like India, high oil prices increase inflationary pressures, widen the import bill, put pressure on the rupee and squeeze margins in crude-sensitive sectors.
Vinod Nair, Head of Research, Geojit Investments Limited said that the risk appetite of domestic investors turned cautious as Indian equities traded with a volatile undertone, pressured by two external concerns — rising crude oil prices and a deepening global bond rout. Compounding this, market participants took their cues from a shifting narrative among US Fed officials.
“Looking ahead, with consensus expectations for a softer August U.S core inflation print, Investors will be focused on whether incoming U.S. macro data can reinforce the case for a Fed pause. With this in view, the U.S. CPI print will be crucial in shaping the interest-rate outlook and bond-yield volatility,” added Nair.
Ravi Singh, Chief Research Officer from Master Capital Services, said that adding to the pressure, US bond yields stayed elevated, with the 10-year Treasury yield touching levels last seen in 2023, brushing past 4.81% before easing marginally, as investors priced in sticky inflation and growing fiscal concerns in Washington. Higher US yields make dollar assets relatively more attractive than emerging markets, and that shows up almost immediately in FII behaviour. FIIs remained net sellers for a third straight week, offloading equities worth Rs 5612 crore amid rising-yield caution.
