Sensex, Nifty end lower as crude surge and US rate fears weigh, MSCI rebalancing adds volatility

Escalating tensions between the US and Iran kept investors cautious, while Brent crude jumped 3.63 per cent to $91.30 per barrel. Investor sentiment was also affected after Federal Reserve Chair Kevin Warsh’s hawkish comments increased expectations of a potential September rate hike.
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Equity benchmarks ended lower on Monday as rising crude oil prices, elevated global bond yields and fears of a potential US interest-rate hike weighed on sentiment. Select stocks also saw sharp swings in the final minutes as MSCI-index linked investors adjusted portfolios ahead of the rebalancing, amid the new closing auction system (CAS).

BSE Sensex closed 307.24 points, or 0.40 per cent, lower at 76,957.27, while the Nifty 50 fell 95.25 points, or 0.39 per cent, to 24,080.40.

Global pressures

Escalating tensions between the US and Iran kept investors cautious, while Brent crude jumped 3.63 per cent to $91.30 per barrel. Investor sentiment was also affected after Federal Reserve Chair Kevin Warsh’s hawkish comments increased expectations of a potential September rate hike.

Vinod Nair, Head of Research at Geojit Investments Limited, said higher crude prices and global bond yields had renewed concerns about energy-led inflation and a higher interest-rate environment. However, stock-specific buying in the broader market helped the indices recover from intraday lows, supported by expectations of healthy Q1FY27 GDP growth, festive-led demand and better GST collections, he said.

Ponmudi R, CEO of Enrich Money, said broad-based selling in early trade was triggered by renewed geopolitical tensions, a weaker global backdrop and rising rate-hike expectations. He said strength in private banking and auto stocks helped cushion losses through the session.

MSCI reshuffle

Investors also remained cautious ahead of the quarterly MSCI index reshuffle implemented at the close, which was expected to result in large passive-fund flows through the CAS session.

Abhinav Tiwari, Research Analyst at Bonanza, said Laurus Labs, Lenskart, Adani Energy Solutions and Groww would be added effective September 1, while Balkrishna Industries, SBI Cards and Astral would be removed. Reliance Industries would see a lower weight, while Adani Enterprises would gain weight.

Top movers today

Broader markets also came under pressure, with both midcap and smallcap indices declining over a per cent intraday before settling on a mixed note, reflecting a cautious undertone. Sectoral losses were led by media, metals and FMCG, while banks and pharma remained resilient.

Sun Pharma, Nestle India, Axis Bank and Max Health were among the top Nifty 50 gainers, while Adani Enterprises, Adani Ports, ITC, Bharti Airtel and TMPV led the losers.

HDFC Bank remained in focus after MD and CEO Sashidhar Jagdishan decided not to seek reappointment and will retire on October 26, 2026.

In the midcap segment, Aurobindo Pharma, Lenskart, Nykaa and Paytm gained more than 4 per cent, while Persistent Systems, GMR Airports, KPIT Tech, and NALCO fell 3-5 per cent. Ather Energy led small-cap gainers and scaled a record high, while Kaynes, Wockhardt, Nuvama and Jyoti CNC declined 4-7 per cent.

Forex, commodity & global markets

In commodity markets, Brent crude jumped 3.63 per cent to $91.30 per barrel. Gold remained under pressure, with Jateen Trivedi, VP Research Analyst – Commodity and Currency at LKP Securities, saying it declined around ₹1,100 to ₹1,55,150 as COMEX Gold slipped towards USD 4,400 before recovering.

Rupee staged a stellar comeback, appreciating to close at 95.17, its strongest level since August 5overcoming an early dip triggered by Friday’s surge in the dollar index, Nandish Shah – Deputy Vice President, HDFC Securities, said.

In global markets, South Korea’s Kospi and Shanghai’s SSE Composite ended higher, while Japan’s Nikkei 225 and Hong Kong’s Hang Seng settled lower.

European markets were trading mostly lower. Wall Street closed slightly lower on Friday, led by a 0.5 per cent decline in the Nasdaq.

Investors will now focus on India’s GDP and fiscal deficit data due later in the day, alongside crude oil movements and global cues.

Ajit Mishra, SVP, Research at Religare Broking Ltd, advised investors to maintain a cautious stance, keep position sizes light and focus on strict risk management while adopting a selective trading approach. Alongside crude oil movements and gloval cues, the domestic market will also take cues from India’s GDP growth, which rose 7.8 per cent in the April-June quarter, while the April-July fiscal deficit stood at 26.8 per cent of the 2026/27 target. Investors will also track auto sales, PMI readings and US jobs data this week.

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Published on August 31, 2026