8 June 2026
Indian markets fall on crude oil, possible Fed hike and tensions in the Middle East
Indian stock markets opened in the red on Monday as two benchmark indices – National Stock Exchange’s Nifty 50 and Bombay Stock Exchange’s Sensex – fell more than 1%.
The decline was largely expected due to rising tensions in the Middle East, rising crude oil prices, to which India is particularly sensitive, and growing bets on a US Federal Reserve rate hike.
The Sensex opened 1.1% lower, down nearly 800 points, while the Nifty opened 1.2% lower, down more than 280 points. Both indexes partially recovered within an hour but were still trading about 0.7% lower.
On Monday morning, India was among several Asian markets facing losses. It came as Iran and Israel fired missiles at each other, dashing any hopes of a peace deal brokered by US President Donald Trump.
Japan’s Nikkei fell 3.4% while South Korea’s Kospi was down 6.81%.
Meanwhile, the global price of Brent crude, a key import for India, rose 2.4% to $95.32 a barrel.
Impact of Fed’s possible hike on Indian market
Global analysts are betting on a US Fed rate hike after the latest US jobs report showed the economy is strengthening despite stress on energy prices from the Middle East conflict.
“This combination could lead to policy tightening by the Fed later this year… We now expect the FOMC to make two 25-basis-point rate hikes later this year,” said Jonas Golterman, chief markets economist at Capital Economics.
The Fed hike will prompt global investors to pull capital out of emerging markets like India and deploy it into US markets, leading to higher returns.