European shares edged higher on Wednesday as falling oil prices pushed bond yields lower, supporting equity markets across the region. According to The Economic Times, the pan-European STOXX 600 index was up 0.1% at 657.34 as of 0703 GMT, with basic resources leading sectoral gains, rising 0.9%. However, the energy sector declined 1.1% and was the weakest performer on the index, reflecting mixed sentiment in commodity-linked stocks. The positive momentum came as oil prices extended their recent decline as expectations grew that the Strait of Hormuz could reopen, potentially allowing crude supplies to increase. Brent crude futures fell for a third straight session, dropping more than 2% to around $86 a barrel, providing relief to bond markets and easing pressure on equity valuations.
The United States and Iran exchanged defiant messages ahead of scheduled announcement of new US economic sanctions on Monday that could impact Iran's most important trading partners including China. As reported by The Economic Times, US Treasury Secretary Scott Bessent outlined a tougher sanctions campaign against Iran, warning of further measures against countries and entities that continue to facilitate trade with Tehran and describing the next phase as an "economic D-Day." China buys more than 80% of Iran's oil, according to 2025 data from analytics firm Kpler, making Beijing a key stakeholder in the escalating tensions. Iran on Saturday criticised Washington's plans to impose new sanctions, warning that the measures could further weaken its economy and affect key trading partners, including China. Iran's parliament speaker urged planning to overcome "unjust sanctions" after new US measures, with Qalibaf linking economic development and security, accusing enemies of economic warfare. Tehran criticizes the impending sanctions as an assertion of extraterritorial sovereignty over UN members, while Iran's president stated the world accepts Iran's victory in its war with the United States. Nearly six months after the United States and Israel launched airstrikes on Iran on February 28, hostilities have largely ceased, but there are still no clear indications that either side is moving toward peace negotiations. The 60-day US-Iran agreement expired without a lasting settlement, leaving the Strait of Hormuz at the centre of an unresolved confrontation and normal energy flows through the region disrupted.
Oil prices extended their decline on Tuesday after falling sharply in the previous session, offering some relief to bond markets. Brent crude had settled at around $92.17 a barrel on Monday, down 2.4%, as investors assessed the impact of the latest US sanctions and their potential implications for the US-Iran conflict. According to The Economic Times, oil prices extended their recent decline as expectations grew that the Strait of Hormuz could reopen, potentially allowing crude supplies to increase. Brent crude futures fell more than 2% to around $86 a barrel, with Reuters reporting that Iran had resumed talks with Oman over the management of the Strait of Hormuz, amid increasing pressure from US President Donald Trump. The nearly six-month conflict has disrupted oil markets and heightened concerns over global inflation. Elevated crude oil prices, with WTI above $85 per barrel, continue to weigh on the broader risk tone across the region. After soaring close to $130 per barrel earlier this year, crude prices had cooled down near $80 per barrel levels as an interim peace agreement eased worries, but recent escalations have retriggered spikes in oil prices. Oil prices climbed to three-week highs as uncertainty over the Iran conflict and Strait of Hormuz disruptions raised supply concerns. Over fifteen million barrels of oil moved through the Strait of Hormuz with US military assistance, while total shipments leaving the region, including pipeline volumes, neared twenty million barrels. Oil shipments through the Strait of Hormuz have nearly ceased due to Iranian threats, with Tehran maintaining its leverage over global energy exports. Analysts predict a steady increase in oil prices amid ongoing regional instability, with institutions like JPMorgan and Goldman Sachs suggesting sharp price surges could happen if disruptions continue.
The global market focus will be on the US Federal Reserve's policy outlook, with investors expected to closely follow the Jackson Hole symposium, particularly remarks by the Fed chairman, for indications about the direction of interest rates. As reported by The Economic Times, attention is now turning to Nvidia's second-quarter results, due later on Wednesday, with the artificial intelligence chipmaker becoming a key gauge of the sustainability of the AI investment boom. Technology stocks slipped 0.2% ahead of the results, reflecting some caution before Nvidia's report. The artificial intelligence chipmaker has become a key gauge of the sustainability of the AI investment boom, with investors looking for evidence that strong spending on AI infrastructure can continue to support elevated market valuations. Markets are also awaiting a key US inflation report later on Wednesday, with investors looking for fresh signals on price pressures and the likely path of Federal Reserve interest rates, making the data an important factor for both bond and equity markets. US GDP estimates, durable goods orders and consumer confidence will also provide important clues on the strength of the US economy and the Fed's policy outlook. "Investors will closely monitor the Jackson Hole symposium, particularly comments from the US Federal Reserve Chairman, for indications on the future trajectory of interest rates," Ajit Mishra, SVP, Research, Religare Broking Ltd, said. "Against a backdrop of volatile long-dated Treasury yields, Fed Chair Kevin Warsh's address at the Jackson Hole symposium will be closely scrutinised for clues on how the central bank is weighing persistent inflation risks against signs of a softer labour market ahead of its September policy meeting," Ponmudi R, CEO of Enrich Money, noted.
In the previous session, the Sensex declined 171.72 points, or 0.22%, to settle at 77,369.11, while the Nifty 50 fell 32.95 points, or 0.14%, to close at 24,219.05. The Nifty managed to remain above the important 24,200 level despite giving up its early gains. According to Bajaj Broking Research, the Nifty closed around its 50-day EMA, making the 24,130 level an important near-term support. If the Nifty manages to sustain above this level, a recovery towards 24,280 and 24,360 could be possible. A decisive move above 24,360, which was last week's high, could strengthen the recovery and open the way towards the 24,600 level in the coming weeks. On the other hand, failure to move above the recent high could keep the index within a broader consolidation range of 24,000-24,350. The index has immediate support around 24,000-23,800, supported by a combination of the trendline joining the lows of the past four months, a previous major gap area and the 61.8% retracement of the earlier move from 23,608 to 24,774. Volatility is likely to be high in session on account of the monthly F&O expiry, with the broader trading range expected between 24,000 and 24,600 in the near term. Overall, the Nifty is expected to remain in a broad consolidation phase amid mixed global cues and elevated geopolitical tensions.
Foreign institutional investors (FIIs) remained net buyers in Indian equities on Monday, while domestic institutional investors (DIIs) continued their buying spree, according to provisional exchange data. FIIs bought shares worth ₹1,181.66 crore on August 24, 2026, while DIIs were net buyers to the tune of ₹2,493.41 crore. According to Business Standard, FPIs bought shares worth ₹13,926.01 crore in August so far through August 24, 2026, following net cash purchases of ₹6,731.97 crore in July 2026 and contrasting with net selling of ₹53,957.90 crore in June 2026. During the session, FIIs purchased equities worth ₹12,560.91 crore and sold shares valued at ₹13,103.62 crore, while DIIs bought equities worth ₹15,258.71 crore and sold shares worth ₹13,134.57 crore. The relationship between crude oil prices, US Treasury yields and the dollar is expected to remain a key driver for Indian equities. With the bulk of the June-quarter earnings season now behind the market, global macroeconomic and geopolitical developments are likely to assume a greater role in setting the near-term direction. However, there's a positive development as Foreign portfolio investors (FPIs) have accelerated buying in Indian equities this month, infusing ₹23,544 crore so far in August, showing renewed confidence in Indian markets despite geopolitical uncertainties. Foreign institutional flows and liquidity conditions will be among the factors watched by investors, Mishra said. The inflow came after FPIs invested ₹20,200 crore in July, marking a sharp turnaround from four consecutive months of heavy selling and signalling renewed confidence in Indian equities.
