Update: The Fed raised rates on September 16, its first hike since 2023 (our report on the market reaction in gold), and the Reserve Bank of India raised its repo rate to 5.50% on October 7 (our report).
Mumbai, September 7: Indian shares made a weak start on Monday. The BSE Sensex opened 255.18 points, or 0.33%, lower at 76,260.25, and the NSE Nifty 50 began 58.10 points, or 0.24%, lower at 23,839.60. Brent crude near $97 a barrel, higher US bond yields and growing fears of a rate hike at the Federal Reserve’s September meeting drove the early selling.
By 9:44 a.m. the Sensex was down only about 120 points, showing that some buying returned after the weak open. This is an intraday snapshot at the time of publication, not the closing level; the index, sector leaders and the rupee can all change through the day.
Key highlights
- The Sensex opened at 76,260.25 and the Nifty at 23,839.60.
- Brent crude was near $96.56 a barrel in early trade.
- The US 10-year Treasury yield rose to 4.784% on Friday.
- Markets were pricing a roughly 58–60% chance of a Fed rate hike in September.
- The rupee opened 10 paise stronger at 94.40 to the dollar, against Friday’s close of 94.50.
Why costlier oil hurts India
India imports most of the crude oil it uses. Dearer oil can lift the import bill, transport costs and inflation expectations, putting pressure on the rupee, government finances and company margins. Airlines, paints, tyres, logistics, chemicals and other fuel-heavy industries are more exposed. Domestic oil producers can gain from higher prices, but the effect on refiners and oil marketing companies depends on inventory, margins and retail pricing policy. Our explainer on Brent crude and India looks at imports, inflation and sector-wise sensitivity.
Why Fed worries suddenly rose
US nonfarm payrolls rose by 162,000 in August, far above market expectations of about 55,000. The strong jobs data weakened hopes that the Federal Reserve would soon turn softer. Higher-for-longer rates, or a fresh increase, can support US bond yields and the dollar. When risk-free US yields rise, emerging markets can look relatively less attractive, and foreign investors may shift towards dollar assets, pressuring Indian shares and the rupee. This is not a fixed rule: strong Indian growth, earnings and domestic institutional buying can limit the damage.
IT shares under the most pressure
In opening trade, Infosys was down about 2.39%, HCL Technologies 1.86%, TCS 1.19% and Tech Mahindra 0.96%. US-focused IT companies feel the combined effect of rate expectations, the dollar and the outlook for global technology spending. Among early gainers were BEL, Bharti Airtel, Eternal and Bajaj Finance, though by small margins.
| Measure | Figure | Our reading |
|---|---|---|
| Sensex previous close (calculated) | 76,515.43 | Opening level plus the 255.18-point fall |
| Nifty previous close | 23,897.70 | Matches Friday’s reported close |
| FII net selling (Friday) | ₹3,111.94 crore | Foreign investors sold |
| DII net buying (Friday) | ₹8,930.12 crore | Domestic institutions bought |
| Combined institutional flow | +₹5,818.18 crore | Domestic buying was nearly three times foreign selling |
Our calculation: domestic institutions bought ₹8,930.12 crore on Friday, about 2.9 times the ₹3,111.94 crore sold by foreign investors, leaving net institutional buying of about ₹5,818 crore. Domestic flows have cushioned recent sessions, but sustained foreign selling could still weigh on market breadth and large-cap valuations.
Technical levels
The Nifty closed at 23,897.70 on Friday, ending a four-day fall, but could not hold above 24,000. Market participants see 23,800 as immediate support and 24,000–24,150 as a resistance zone. These are analysts’ levels, not guaranteed outcomes; advances and declines, bank stocks and mid-cap participation will matter too. India’s first-quarter growth gave a strong picture of domestic demand, as our India GDP 7.8% analysis explains, and our report on record forex reserves shows the RBI has a larger buffer against currency swings, though reserves cannot stop a fall on any single day.
What to watch
- Whether Brent holds above $97 or eases.
- Whether the rupee keeps its early strength or importers’ dollar demand reverses it.
- Whether IT weakness spreads to banks, autos and consumer stocks, or sector rotation limits the losses.
- US inflation data and signals from the September 15–16 Fed meeting.
What it means
Monday’s early move shows that oil and global interest rates are, for now, weighing more than domestic optimism. Still, an opening fall should not be read as the day’s trend; the final direction will be clear only after the cash market closes. This report is market information and context, not investment advice.
This article was first published in Hindi and has been translated. The Press of Asia now publishes in English only.
Sources
The Business Desk covers markets, the economy, companies and personal finance. Stories are checked against at least two credible sources before publication.
