Nifty falls 1.6% as oil and global yields weigh on Indian equities

The session's pressure came against a renewed rise in oil after US President Donald Trump rejected an Iranian proposal linked to reopening the Strait of Hormuz. Reuters reported that the diplomatic deadlock raised concerns about supply through the route and lifted Brent in Asian trading. Market participants and analysts linked the oil move to inflation, import-cost and corporate-margin concerns for India, a major crude importer.

Banks and financials were among the reported drags, with HDFC Bank, ICICI Bank and Reliance Industries also cited among the heavyweights weighing on the market. Reuters' stock-specific account was from morning trading, rather than the close, and did not identify a single company announcement behind those declines. Coverage also pointed to proposed insurance-commission changes as an overhang for financial shares; that is a possible additional source of caution, not an established explanation for every bank's move.

Healthcare and IT were relatively resilient, while energy, power and industrial shares lagged, according to the recorded sector readings. Reports did not establish a specific catalyst for each sector's relative performance. The contrast is consistent with a broad risk-off session in which investors favoured comparatively defensive areas and were wary of oil costs and uncertainty around global rates.

The RBI's latest bulletin, reported on September 28, described the economy as resilient but identified geopolitical tensions and weather-related uncertainty as downside risks. The bulletin noted that the West Asia conflict had lifted oil prices and renewed inflation concerns. That assessment matters for markets because sustained energy costs can complicate the inflation outlook even while domestic activity remains firm.

MoSPI's August consumer-price release put year-on-year retail inflation at 4.82%, against 4.45% in July; food inflation was 5.95%, against 5.52% a month earlier. The August IIP release was listed in the economic calendar, but a confirmed actual print was not available in the material reviewed. No September manufacturing PMI reading was available; the final September reading was scheduled for October 1.

The RBI had also withdrawn a previously notified extension that would have given exporters 15 months to repatriate export proceeds, retaining the nine-month deadline instead. Separately, SEBI barred Omaxe from accessing or dealing in the securities market for three months, citing non-compliance with minimum public shareholding. These were reported regulatory developments; no new RBI rate decision was reported for the session.

Asian markets were mixed but broadly cautious, with weakness reported in South Korea and mainland China while Japan and Hong Kong were firmer in some reports. US equity futures were lower during Asian trading, although US shares had ended Friday higher. Reuters linked the global risk tone to higher oil and bond yields; the US 10-year Treasury yield was reported around 5.2% in early trading, while the dollar remained near a two-month high.

For India, those global moves compound the oil and currency concerns rather than providing a single explanation for the domestic close. The latest institutional-flow figures available were for Friday, September 25: provisional data showed foreign investors as net sellers of Rs 3,694 crore and domestic institutions as net buyers of Rs 2,838 crore. Monday's net activity was not available in the sources reviewed, so Friday's figures should not be read as Monday flows.

Larsen & Toubro said it had received a Rs 797 crore order, excluding taxes, from Rashtriya Chemicals and Fertilizers to revamp an ammonia plant; completion is scheduled within 36 months. Power Grid's board approved raising up to Rs 10,000 crore through an unsecured rupee loan or credit line from State Bank of India. The announcements provide project and funding visibility, but the available reports did not give market expectations against which to measure either development.

Steel Authority of India and Bharat Coking Coal agreed to jointly develop and operate two coal blocks in West Bengal. Adani Power also said the merger of 10 wholly owned subsidiaries had taken effect on September 25. No same-day company earnings with a reported consensus comparison were identified in the material reviewed.