Oil Price Surge Triggers Indian Market Rout as US-Iran Tensions Escalate

Indian stocks plummeted on Monday, September 28, as crude oil prices soared and uncertainty over US-Iran peace negotiations weighed heavily on investor sentiment.

The benchmark Sensex index closed 1.52% lower at 72,771.72, losing 1,124.02 points, while the NSE Nifty 50 declined 1.56% to 22,780.25, shedding 360.25 points.

Banking stocks led the decline, with the Nifty Bank index falling 1.99% and the Nifty PSU Bank index dropping 3.24%. HDFC Bank, ICICI Bank, State Bank of India, and other major lenders faced selling pressure as investors reduced exposure to equities amid rising global bond yields and uncertainty over interest-rate expectations.

Foreign selling also contributed to market pressure, with foreign institutional investors selling shares worth ₹3,696 crore on Friday. Higher US Treasury yields can make dollar-denominated assets more attractive relative to emerging-market equities, while a stronger dollar increases pressure on currencies like the rupee.