The Indian stock market is expected to start on a slightly weaker note on Wednesday (September 2) and extend its decline, as indicated by GIFT Nifty and negative sentiment across Asian markets. According to Reuters, GIFT Nifty futures were at 24,033.5 points as of 7:38 a.m. IST, indicating a negative start for the Nifty 50 index, which closed at 24,055.80 on Tuesday. The Nifty Oil and Gas sector is showing positive momentum with the index closing at 12,960.00 (+0.86%) on Tuesday, as reported by Univest. The latest Gulf flare-up has pushed oil prices up around 2.5-2.7% and reminded markets how quickly supply routes can be disrupted, putting energy giants like Reliance Industries and Saudi Arabian Oil in focus. However, Brent crude jumped 2% to $96.6 a barrel, triggering a drop in Asian markets and lifting global bond yields on worries of a near-term U.S. rate hike.
The escalation of tensions in the Middle East has intensified significantly as the U.S. launched a series of airstrikes against targets in Iran overnight, prompting an Iranian response in a renewed escalation of tensions. According to Reuters, a prolonged disruption to energy flows through the region could keep oil prices elevated, sustain inflationary pressures and reinforce expectations of tighter global monetary conditions, weighing on risk assets. Two analysts noted that this could make emerging markets less attractive for global investors. The latest Gulf flare-up has pushed oil prices up around 2.5-2.7% and reminded markets how quickly supply routes can be disrupted, putting energy giants like Reliance Industries and Saudi Arabian Oil in focus. November Brent crude futures contract rose nearly 3% from Monday's lows to more than $91 per barrel, as reported by Informist Media, adding to the upward pressure on energy prices. On Tuesday, Brent crude surged past $95 a barrel after the US Central Command said it launched targeted strikes against the Iran Revolutionary Guard Corps, with the completion of operations announced on Wednesday in the early hours.
The Indian equity markets showed mixed performance on Tuesday with Nifty 50 closing at 24,128.75 (+0.2%) and BSE Sensex rising 0.3% to 77,217.05. According to Informist Media, IT majors HCL Technologies and Infosys rose nearly 4% and over 1% respectively, while Reliance Industries gained further and lent support to the 50-stock index. FMCG major ITC was the top gainer, up nearly 4%, carrying positive sentiment after the announcement of the merger of Happiest Minds Technologies with its arm. However, financial services companies put downward pressure on the Nifty 50, with Shriram Finance falling nearly 4% and other major financial service companies like Axis Bank, Bajaj Finserv, and State Bank of India down 1-3%. Automobile companies performed well with Bajaj Auto and Tata Motors Passenger Vehicles up around 2%, while Mahindra & Mahindra posted a 42% on-year growth in August vehicle sales. Broader market indices were mixed as mid-cap indices fell nearly 1% and small-cap indices were down 0.3-0.5%.
Brokerage firm CLSA on Wednesday, September 3, expects oil prices to rise in the next couple of months, which could significantly impact Indian energy stocks. According to CNBC TV18, CLSA expects oil prices to rise within the next two to three months, which would be positive for ONGC and Oil India but negative for Indian Oil Corporation, BPCL and HPCL. The brokerage noted that an estimated 70% of over 1 billion barrels supply shortfall from the Strait of Hormuz countries from March to July 2026 was met by releases from strategic reserves of China, US and OECD. However, CLSA differs from market expectations, as it sees a low likelihood of relief in near-term supply while fearing a pickup in imports from China, Korea and Japan as they become less willing to further deplete their severely depleted strategic reserves. A rise in crude oil prices is generally positive for upstream oil firms such as ONGC and Oil India, while it is negative for downstream refining firms such as Indian Oil, HPCL, BPCL and Indian Oil. The brokerage also warned that a rise in oil prices is also negative for FMCG companies, paint companies, tyre companies, who use crude and its derivatives as a key input component.
On Wednesday morning, ONGC shares were trading flat at ₹236.6 apiece while Oil India was down 0.2% at ₹488.8 apiece at 9:29 am. Meanwhile, IOC was down 1.3% at ₹134.79, HPCL and BPCL were down 1.1% each at ₹359.2 and ₹314.2 apiece, respectively. The US-Iran war, which started on February 28, 2026, has now entered its seventh month, with the start of the conflict leading to an energy crisis as the Strait of Hormuz became a conflicting zone with Iran not allowing ships to pass through. Brent crude prices are back near the $100 a barrel after the recent flare-up in West Asia drove prices higher again, having cooled to levels of $70 after the ceasefire announcement in June. The oil and gas Wednesday forecast becomes bullish above 13,010.00 and bearish below 12,820.00 on a 15-minute NSE chart close for Wednesday, as reported by Univest.
The GDP growth for the June quarter stood at 7.8%, according to government data, which was higher than expectations of 7.2%, according to an Informist Poll. As reported by Informist Media, "GDP growth has remained resilient despite geopolitical tensions, while high-frequency indicators suggest that domestic growth momentum continues to hold up." This evidence of broad-based inflation should allow the Reserve Bank of India to keep interest rates unchanged in the near term. However, with emerging signs of inflation broadening, February 2027 could emerge as the key risk window for a potential rate hike, according to Nirmal Bang Institutional Equities. The Nifty 50 remained rangebound for 11 consecutive sessions with technical analysts noting that sustained trading below 23,980 could drag it toward 23,900 levels, followed by 23,750, while a sustained rise above 24,200 could take the Nifty 50 to 24,380. The Nifty Oil and Gas sector continues to show positive momentum despite global market volatility, supported by ongoing supply disruption concerns and geopolitical tensions in the Middle East.
