Nifty seen flat as oil tops $90, investors track global risks
GIFT Nifty:
GIFT Nifty September 2026 futures were down 1 point, indicating a flat opening for the Nifty 50.
India's economic growth remained resilient in the first quarter of FY27, with real GDP growing 7.8% year-on-year in Q1 FY27 (April-June 2026). The growth exceeded the Reserve Bank of India's 7% projection. However, it moderated from the revised 8.6% growth recorded in Q4 FY26.
India's fiscal deficit stood at Rs 4.55 lakh crore during April-July, accounting for 26.8% of the full-year target of Rs 16.96 lakh crore for FY27. The government has pegged its FY27 fiscal-deficit target at 4.3% of GDP.
Meanwhile, Prime Minister Narendra Modi urged Russian President Vladimir Putin to move towards ending the Ukraine war and called for a cessation of hostilities during their meeting on the sidelines of the Shanghai Cooperation Organisation summit on Monday. Modi said India supports all peace efforts and that continuing the war is a setback for humanity.
The appeal came as Russia warned of planned ?massive strikes? on Ukraine's energy infrastructure, raising concerns over a renewed winter offensive. A recent Russian strike on an ammunition warehouse reportedly killed 38 people.
Institutional Flows:
Foreign portfolio investors (FPIs) sold shares worth Rs 7,985.88 crore, while domestic institutional investors (DIIs) were net buyers to the tune of Rs 4,588.88 crore in the Indian equity market on 31 August 2026, according to provisional data.
FPIs bought shares worth Rs 17366 crore in August so far, through 31 August 2026. This follows net cash purchases of Rs 6,731.97 crore in July 2026, while they were net sellers of Rs 53,957.90 crore in June 2026.
Global Markets:
Most Asian stocks declined on Tuesday as renewed US-Iran hostilities pushed oil prices higher and revived concerns over inflation and interest rates. Investors were also assessing the prospect of further Federal Reserve rate hikes following hawkish comments from Fed Chair Kevin Warsh.
Wall Street ended lower on Monday, with rising Treasury yields and higher oil prices weighing on risk assets. The S&P 500 fell 0.33%, the Nasdaq Composite declined 0.12% and the Dow Jones Industrial Average dropped 0.70%. The market is also looking ahead to the US nonfarm payrolls report due on Friday, which could provide fresh clues on the Federal Reserve's policy path.
Oil prices climbed above $90 a barrel after the US and Iran resumed military strikes following a period of relative calm. US forces struck Iranian rocket launchers on Larak Island in the Strait of Hormuz, while Iran retaliated with attacks on US military targets in Jordan. The escalation has raised concerns over prolonged supply disruptions through the key oil shipping route.
Brent crude settled at $90.49 a barrel on Monday, up 2.71%, while the US 10-year Treasury yield rose to around 4.75%. Higher oil prices have revived concerns over persistent inflation, potentially strengthening the case for tighter monetary policy.
The renewed conflict has also increased uncertainty over the outlook for the Strait of Hormuz, through which a significant share of global oil shipments normally passes. Shipping activity has fallen sharply amid the hostilities, adding to concerns about further supply disruptions.
Domestic Market:
Key equity benchmarks ended lower on Monday, with the Nifty slipping below 24,100 as renewed US-Iran tensions, higher crude oil prices and weak global cues weighed on sentiment. The selloff was broad-based, although private bank and healthcare stocks provided some support. Media and metal stocks were among the biggest losers. Crude oil remained a key macro risk as renewed US-Iran military tensions raised concerns over potential disruption to supplies through the Strait of Hormuz. The session also marked the implementation of MSCI's latest index changes under the new closing-auction mechanism, resulting in significant stock-specific flows. The S&P BSE Sensex declined 307.24 points or 0.40% to 76,957.27. The Nifty 50 index fell 95.25 points or 0.39% to 24,080.40.
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