Indian Stocks Slide as Oil Surges Above $106 and Iran Talks Stall

NEW DELHI, India, September 28, 2026, ZEX PR WIRE — Indian equities moved lower on Monday, September 28, as renewed uncertainty around the US Iran conflict pushed crude oil prices higher and added pressure to markets already dealing with elevated inflation and borrowing cost concerns. The Nifty 50 and Sensex both opened lower, while the broader market also weakened.

The decline came as Brent crude climbed above $106 a barrel after US President Donald Trump rejected an Iranian proposal involving the reopening of the Strait of Hormuz. The development increased concerns about energy supply and kept investors focused on the potential economic impact of prolonged disruption in the region.

Oil Prices Put Pressure on Indian Equities

India remains highly exposed to movements in global crude prices because of its reliance on imported oil.

Brent futures rose around 2% on Monday to approximately $106.50 per barrel, while US crude also moved higher. Reuters reported that Brent had gained nearly 18% during September, adding to concerns over the effect of higher energy costs on inflation and the country’s import bill.

Higher crude prices can affect Indian companies through several channels. An increase in fuel and transportation costs can raise expenses for businesses, while more expensive imports can put pressure on the country’s trade balance and currency.

For sectors that are heavily dependent on energy or transportation, sustained increases in crude prices can also affect operating margins.

Nifty and Sensex Extend Recent Weakness

The Nifty 50 fell 0.33% shortly after Monday’s opening to 23,064.9, while the BSE Sensex declined 0.22% to 73,734.83, according to Reuters.

The weakness followed a difficult period for Indian equities. The country’s benchmark indexes had already recorded a seven week losing streak, described by Reuters as the longest such stretch since 2020. Fourteen of the 16 major sectors were trading lower at the start of Monday’s session, while both small cap and mid cap stocks also declined.

The broad based nature of the decline suggests that the pressure was not limited to a single industry.

Bond Yields and Rate Expectations Add Another Risk

Oil is also influencing expectations around monetary policy.

A sustained increase in energy prices can make inflation more difficult to contain, particularly if higher fuel and transportation costs begin feeding into broader goods and services prices.

Global bond yields have already moved significantly higher. Reuters reported that the 30 year US Treasury yield was around 5.52% on Monday, close to its highest level since 2004. The two year Treasury yield has also risen sharply during September as markets have increased expectations for additional US rate increases.

Higher global yields can affect emerging markets by changing the relative attractiveness of their assets and influencing currency flows.

For India, the combination of expensive oil and elevated global yields is therefore creating pressure across both equity and fixed income markets.

Investors Await a Heavy Economic Data Calendar

The coming week could provide additional direction for markets.

Investors are preparing for several important US economic releases, including the August personal consumption expenditures inflation data on Wednesday and the September nonfarm payrolls report on Friday. Manufacturing data from the US and China will also be released during the week.

These figures will be watched closely because they could influence expectations around the Federal Reserve’s future interest rate decisions.

Indian investors will also have domestic data to consider, including August industrial production and fiscal deficit figures, followed later by India’s September manufacturing PMI and the Reserve Bank of India’s October policy meeting.

For Indian equities, the immediate market focus remains on whether elevated crude prices persist and how quickly global inflation and interest rate expectations respond.

The combination of higher energy costs, rising global yields and an uncertain geopolitical backdrop means investors are entering the final days of September with several interconnected factors to monitor.