Despite India’s strong 7.8% GDP growth, rising crude oil prices, higher global bond yields and geopolitical uncertainty weighed on investor sentiment, pushing the Sensex and Nifty slightly lower.
Indian stock markets ended marginally lower on Tuesday, September 1, as rising crude oil prices, higher global bond yields and renewed geopolitical tensions weighed on investor sentiment.
The Nifty 50 closed at 24,055.80, down 24.60 points, or 0.10%, while the BSE Sensex ended at 76,944.28, a decline of 12.99 points, or 0.02%.
Oil prices add to market pressure
Crude oil prices climbed above $92 a barrel for Brent crude amid renewed tensions in the Middle East. Higher oil prices are a concern for India because the country relies heavily on imported crude. A sustained rise in energy costs can increase inflationary pressure and affect corporate margins.
Rising bond yields weigh on sentiment
Global bond yields also moved higher, increasing concerns that major central banks could keep interest rates elevated for longer. The US 10-year Treasury yield reached around 4.77%, making dollar-denominated assets relatively more attractive to international investors.
Banks and auto stocks under pressure
Banking and automobile stocks were among the major laggards. The Nifty Bank index fell about 1.1%, while the auto index declined around 1.2%. Maruti Suzuki fell 4.4% after weaker August sales figures.
However, some major stocks moved against the broader trend. Reliance Industries gained about 2.5%, supported by optimism over refining margins, while Kotak Mahindra Bank rose 1.3%.
Strong Indian growth provides some support
The market weakness came despite India's economy recording 7.8% growth in the April-June quarter of 2026, which was stronger than expected. The strong domestic growth outlook could provide some support to equities if global risks remain contained.
For now, investors are closely watching crude oil prices, global bond yields, geopolitical developments and foreign investor flows. The combination of expensive oil and higher borrowing costs could continue to create volatility in Indian equities in the near term.