Indian stock markets ended lower on Monday (August 31, 2026) as renewed US-Iran military escalation and rising crude oil prices dampened investor sentiment. The 30-share BSE Sensex declined 307.24 points or 0.40% to close at 76,957.27, while the 50-share NSE Nifty 50 index fell 95.25 points or 0.39% to settle at 24,080.40. During intraday trading, the Sensex tanked as much as 513.19 points or 0.66% to 76,751.32, highlighting the volatile session. According to The Hindu, 20 of the 30 Sensex constituents ended lower while 10 posted gains, with Adani Ports falling the most by 4.11%. The selloff was broad-based across sectors, with utilities, IT, and FMCG shares among the biggest losers. However, private bank and healthcare stocks provided some support to the broader market decline. In the broader market, the BSE 150 MidCap Index fell 0.23% and the BSE 250 SmallCap Index dropped 0.74%. Market breadth remained negative with 1,858 shares rising and 2,572 shares falling on the BSE, while 261 shares remained unchanged.
The war in the Middle East has escalated significantly over the weekend with US forces striking two Iranian rocket launchers on Larak Island on Sunday after the military said Revolutionary Guard forces were preparing rockets carrying sea mines for launch into the Strait of Hormuz. According to US Central Command, Navy Capt. Tim Hawkins confirmed that "Islamic Revolutionary Guard Corps forces were observed preparing to launch rockets with sea mines into the Strait of Hormuz." This marks the first publicly acknowledged US strike on Iranian positions since late July, representing a significant escalation in hostilities that have now dragged on for six months and sharply disrupted vessel traffic through the Strait of Hormuz. The Iranian Revolutionary Guards Corps said the US attack on Larak Island killed and wounded several Iranian soldiers, responding with attacks on American military bases in Jordan, targeting the King Hussein and Al Azraq bases. As per Vinod Nair, Head of Research, Geojit Investments Limited, escalating tensions between the U.S. and Iran have kept investors on edge, as fading prospects of a diplomatic breakthrough pushed crude oil prices and global bond yields higher.
Brent crude for October 2026 settlement jumped 3.63% to $91.30 per barrel, significantly higher than Friday's levels when Brent crude futures climbed 1.23% to $89.18 a barrel, while US West Texas Intermediate crude advanced 1.10% to $84.32 a barrel. Shipping data showed that the number of visible commodity vessels passing through the Strait of Hormuz fell to around five per day over the weekend, highlighting growing caution among shipping companies. In Asian markets, South Korea's Kospi and Shanghai's SSE Composite ended higher, while Japan's Nikkei 225 index and Hong Kong's Hang Seng index settled lower. US markets ended in negative territory on Friday, with the S&P 500 falling 0.25% to 7,711.76, while the technology-heavy Nasdaq Composite declined 0.52% to 26,402.42. According to Vinod Nair, rising crude oil prices and bond yields have renewed concerns over energy-led inflation and a higher interest rate environment, which could weigh on the earnings cycle.
ITC, Bharti Airtel, Infosys, Kotak Mahindra Bank, Trent, Hindustan Unilever and Titan were among the laggards, while Sun Pharma, ICICI Bank, Axis Bank and State Bank of India were among the gainers. Index major HDFC Bank reversed early gains to close down by 1.53% as its CEO and Managing Director Sashidhar Jagdishan announced that he will opt for reappointment after his current term ends on October 26, 2026. Zee Entertainment Enterprises dropped 7.65% after reports that lenders plan to challenge the NCLT-approved repayment plan involving Essel Group founder Subhash Chandra. Reliance Industries fell 0.78% after its subsidiary Jio Platforms received an observation letter from SEBI for its proposed IPO. Karbonsteel Engineering surged 6.94% after receiving purchase orders aggregating ₹67.14 crore from India's largest diversified conglomerate. Avantel advanced 2.37% after securing a ₹117.88 crore contract from DRDO for ground segment hub development. Indraprastha Gas rose 2.23% after increasing CNG prices by ₹3.89 per kg, with Delhi CNG now costing ₹86.98 per kg.
India's real GDP grew 7.8% year-on-year in Q1 FY27 (April-June 2026), beating the Reserve Bank of India's 7% projection and real Gross Value Added (GVA) grew 8.2%, with manufacturing and financial services among the key drivers. The rupee edged higher against the dollar, hovering at 95.2100 compared with its previous close of 95.4375. MCX Gold futures for October 2026 settlement shed 0.62% to ₹155,318. The yield on India's 10-year benchmark federal paper rose 0.55% to 6.951, while the US Dollar Index (DXY) was down 0.17% to 99.53. According to Ponmudi R, CEO of Enrich Money, Indian equity markets ended lower on the final trading day of the month, with the Nifty slipping to a fresh monthly low as renewed U.S.-Iran military escalation sent crude oil prices sharply higher, lifted global bond yields to multi-year highs and reinforced concerns that the Federal Reserve may need to keep policy tighter for longer. Foreign Institutional Investors (FIIs) offloaded equities worth ₹5,039.80 crore on Friday, as per exchange data. Market experts highlight that higher oil prices could increase India's import bill and inflationary pressures, while the combination of higher rate expectations, elevated bond yields and renewed geopolitical tensions has increased pressure on global risk assets.
