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Brent near $110 and a Nasdaq slide set a cautious tone for Indian shares on Monday
Oil jumped almost 4% on Friday after Indian markets had shut, and a sell-off in chip and AI stocks gave the Nasdaq its worst week since June. A weekend of tanker attacks in the Gulf adds to the risk.
Key points
- Brent crude settled at $109.86 a barrel on Friday, its highest close since 19 May.
- The Nasdaq fell 2.14% on the day and about 4.5% over the week, its worst week since late June.
- Indian shares closed on Friday before oil's late jump, with the Sensex up 3.1% for the week.
Indian shares go into Monday’s session with oil close to $110 a barrel and Wall Street nursing its worst week in months, a mix that is likely to test the rally that lifted the Sensex more than 3% last week.
Brent crude, the global benchmark, settled at $109.86 a barrel on Friday, up $3.94 or 3.7%. It was the highest close since 19 May. US crude rose 3.5% to $101.41. Most of the jump came after Indian markets had closed: at about 4 pm IST Brent was trading near $105.6.
Two things drove it. A Saudi-led coalition said it had intercepted a ballistic missile aimed at the Red Sea port of Yanbu, which Saudi Arabia now depends on to ship oil while the Strait of Hormuz is choked. No damage was reported. A Ukrainian drone strike also shut a main unit at a large Russian refinery, adding to doubts over diesel supplies.
The weekend brought no relief. On Saturday Iran’s Revolutionary Guards said a supertanker had hit a mine in Hormuz and caught fire, and a tanker off the Saudi port of Jubail was struck by a rocket-propelled grenade.
A rough week for tech
In New York, the Nasdaq Composite fell 2.14% on Friday to 26,140.03, leaving it about 4.5% lower for the week, its worst showing since late June. The S&P 500 lost 1.09% to 7,659.44. The Dow Jones Industrial Average held up better, slipping 0.34% to 52,002.41 and still ending the week about 0.7% higher.
The selling was concentrated in chipmakers and companies building AI infrastructure, as investors questioned how much of that spending is being funded with debt and worried about Chinese competition in memory chips. Hot US inflation data earlier in the week had also raised talk of another rate increase by the Federal Reserve. Wall Street’s fear gauge, the VIX, rose more than 21% to 19.99.
“Earnings are important, but the market is concerned that 2026 will mark the peak for earnings growth,” said Michael O’Rourke, chief market strategist at Jones Trading.
Fed Chair Kevin Warsh, speaking at the IMF meetings in Bangkok, declined to say what the central bank would do at its 27-28 October meeting. Traders cut the chance of an October rate rise to roughly 10-16%, from close to 60% after the inflation figures, though they still see a December increase as very likely.
Spot gold ended Friday almost flat at about $4,166 an ounce. The dollar index eased to about 101.9, and the 10-year US Treasury yield stood near 5.11%.
What it means for India
Oil is the biggest worry. India imports most of its crude, and a price near $110 raises the import bill and puts pressure on the rupee, which strengthened for six straight sessions to 94.89 a dollar on Friday partly because oil had eased.
The tech sell-off is a second risk. Indian IT shares led Friday’s gains, with the Nifty IT index up 3.92% after strong results from TCS and Tech Mahindra. A slump in US tech sentiment could cool that buying.
There is some support at home. Foreign investors bought a net ₹1,165.92 crore of Indian shares on Friday, and the big banks reported on Saturday: ICICI Bank’s profit rose 20% and Axis Bank’s 38%, while HDFC Bank’s grew 4.7%. Bank shares, which make up a large part of the Nifty, will react to those numbers first.
The Sensex closed on Friday at 74,729.27 and the Nifty at 23,146.15.