The markets ended lower on Monday as rising crude oil prices, renewed US-Iran tensions and concerns over higher US interest rates weighed on investor sentiment. The benchmark Sensex fell 307.23 points, or 0.40%, to close at 76,957.27, while the Nifty 50 declined 95.25 points, or 0.39%, to settle at 24,080.40.
The weak session reflected a cautious mood among investors as geopolitical uncertainty returned to the forefront. Fresh military action involving the United States and Iran pushed crude oil prices higher, raising concerns for oil-importing economies such as India. The country imports around 85% of its crude oil requirements, making a sustained rise in global oil prices a key risk for inflation, corporate margins and the rupee.
The market started the day on a weak note. The Sensex opened around 190 points lower, while the Nifty was down nearly 105 points. The Nifty slipped below the important 24,000 level during the session, touching an intraday low of 23,993.60. The Sensex also fell to an intraday low of 76,751.32 before recovering some ground towards the close.
Crude oil remained one of the biggest concerns for investors. Oil prices rose after US strikes on Iranian launch sites near the Strait of Hormuz were followed by Iranian attacks on American military bases in Jordan. Brent crude moved above $90 a barrel, reviving fears that higher energy costs could put additional pressure on India’s inflation outlook and increase input costs for several businesses.
The prospect of higher US interest rates added to the pressure. Recent comments from US Federal Reserve officials have increased expectations of a possible rate hike, prompting investors to reassess riskier assets. Higher US bond yields can also reduce the attractiveness of emerging-market equities and put pressure on capital flows into markets such as India.
Among individual stocks, Adani Enterprises and Adani Ports & SEZ were the biggest losers on the Nifty 50, falling 9.76% and 6.70%, respectively. ITC declined 3.95%, Bharti Airtel fell 3.75%, while Tata Motors Passenger Vehicles dropped 3.30%.
On the other side, Sun Pharmaceutical Industries was the top Nifty 50 gainer, rising 3.38%. Nestle India gained 2.88%, Axis Bank advanced 2.77%, Max Healthcare Institute rose 2.76% and Grasim Industries climbed 2.46%.
The broader market presented a mixed picture. While the Nifty Smallcap 100 declined 0.74%, the Nifty Midcap 100 managed to finish 0.24% higher. Aurobindo Pharma was among the notable mid-cap gainers, rising 4.36%, while Lenskart Solutions, FSN E-Commerce Ventures, One 97 Communications and Polycab India also posted gains.
Aurobindo Pharma gained after its US subsidiary launched generic versions of Advair Diskus in the American market. Lenskart rose 4.22%, FSN E-Commerce Ventures gained 4.14%, One 97 Communications advanced 4.01% and Polycab India increased 3.93%.
The small-cap segment, however, remained under pressure. Kaynes Technology India, Wockhardt, Jyoti CNC Automation, Nuvama Wealth Management and Chambal Fertilizers were among the major decliners. Ather Energy stood out among the gainers, climbing 6.27% and touching a 52-week high following its recent product launches.
Another important factor behind Monday’s volatility was the latest MSCI index rebalancing. The changes triggered substantial stock-specific buying and selling, particularly towards the market close. A new closing-auction mechanism for stocks with futures and options also faced its first major test during the reshuffle.
Reliance Industries fell 0.8% after its MSCI weighting was reduced, while Eternal recovered from an earlier decline after its index weight increased. Some mid-cap stocks, including Laurus Labs and Adani Energy Solutions, experienced sharper moves because index-related orders were large compared with their available trading liquidity.
HDFC Bank was another key stock in focus. Its shares fell around 1.6% after the private sector lender said CEO Sashidhar Jagdishan would not seek reappointment when his current term ends in October. Given the bank’s large weight in the benchmark indices, the decline also contributed to market weakness.
Sectorally, eight of the 16 major sectoral indices ended lower. Metal, IT, PSU Bank, Realty and Media stocks faced selling pressure, while pharmaceutical and selected financial stocks offered some support. The mixed performance showed that investors were not abandoning equities broadly but were becoming more selective amid rising global risks.
The Sensex and Nifty also ended August with monthly losses, reflecting the pressure created by global uncertainty and volatile capital flows. With September beginning against this unsettled backdrop, investors are likely to watch global cues closely before taking fresh positions.