Indices drift lower in early trade; breadth positive
Market participants remained cautious ahead of the MSCI index rebalancing, which is expected to trigger sizeable passive fund flows under the new Closing Auction Session (CAS) mechanism. The Nifty traded near 24,050 mark.
Investors will closely track movements in crude oil and gold prices, domestic and US bond yields, the rupee, and developments surrounding the US-Iran conflict. The trajectory of monsoon rainfall and its implications for rural demand and inflation will also remain on the radar.
Barring private bank all the sectoral indices on the NSE were traded in red with metal, media and IT shares leading the decline.
At 09:25 IST, the barometer index, the S&P BSE Sensex declined 309.29 points or 0.41% to 76,954.13. The Nifty 50 index fell 121.75 points or 0.50% to 24,053.90.
The broader market underperformed the frontline indices. The BSE 150 MidCap Index fell 0.71% and the BSE 250 SmallCap Index dropped 0.85%.
The market breadth was negative. On the BSE, 1,342 shares rose and 1,985 shares fell. A total of 299 shares were unchanged.
Foreign portfolio investors (FPIs) sold shares worth Rs 5,039.80 crore, while domestic institutional investors (DIIs) were net buyers to the tune of Rs 5,183.93 crore in the Indian equity market on 28 August 2026, according to provisional data.
Numbers to Track:
The yield on India's 10-year benchmark federal paper rose 0.49% to 6.947 compared with the previous session close of 6.913.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 95.4300 compared with its close of 95.4375 during the previous trading session.
MCX Gold futures for the 5 October 2026 settlement fell 1.21% to Rs 1,54,389.
The US Dollar Index (DXY), which tracks the greenback's value against a basket of currencies, was up 0.54% to 99.70.
The United States 10-year bond yield declined 0.10% to 4.710.
In the commodities market, Brent crude for the November 2026 settlement jumped $2.07 or 2.35% to $90.17 a barrel.
Stocks in Spotlight:
Reliance Industries shed 0.68%. The company announced that its Jio Platforms (JPL), a subsidiary of the company, has received the observation letter from the Securities and Exchange Board of India (SEBI) on the Draft Red Herring Prospectus (DRHP) filed for its proposed initial public offering (IPO).
HDFC Bank added 2.23%. The bank said Sashidhar Jagdishan has decided not to seek reappointment as managing director & chief executive officer (MD & CEO) of the bank. Accordingly, Jagdishan will retire from the services of the bank with effect from 26 October 2026. The board has decided to fast-track the process for selection and appointment of his successor well in advance.
Max Estates declined 1.31%. The company has entered into a Share Purchase Agreement to acquire the entire ownership interest in promoter-owned land-holding companies that together own an approximately 84.71-acre land parcel in West Delhi. The said land parcel is estimated to unlock a gross development value (GDV) of around Rs 10,000-12,000 crore over the next few years.
Global Markets:
US stock futures were trading 151 lower on Monday, signalling a weak opening for Wall Street, while most Asian markets declined as investors assessed a more hawkish policy outlook from Federal Reserve Chair Kevin Warsh and renewed US-Iran tensions. Warsh said the Fed would have ?work to do? if it was not confident that underlying inflation was returning to its 2% target, prompting markets to raise the probability of a September rate hike to around 57%.
Asian technology stocks came under pressure as higher expected borrowing costs weighed on risk appetite.
Oil prices rose after the US military struck Iranian missile launchers near the Strait of Hormuz. Brent crude climbed to around $89.30 a barrel, raising concerns over a renewed escalation and potential disruption to oil supplies through the key shipping route.
China's manufacturing activity remained in contraction for a second consecutive month in August, although the pace of decline eased. The official manufacturing Purchasing Managers' Index rose to 49.8 from 49.2 in July, remaining below the 50 mark that separates expansion from contraction. The reading was also better than economists' expectations.
US equities ended lower on Friday after Warsh's Jackson Hole speech revived concerns over tighter monetary policy. The S&P 500 fell 0.25% to 7,711.76, the Dow Jones Industrial Average slipped 0.02% to 53,559.99 and the Nasdaq Composite declined 0.52% to 26,402.42.
The combination of higher rate expectations, elevated bond yields and renewed geopolitical tensions has increased pressure on global risk assets. Markets will now turn to upcoming US employment and inflation data for further clues on the Federal Reserve's policy path.
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