Sensex drops 365 points, Nifty at 24,211 as crude oil surges past $91 on Iran-US tensions
Synopsis
A crude oil spike above $91 — fuelled by Iran signalling a more offensive posture and Trump ruling out a ceasefire extension — sent Sensex down 365 points and Nifty to 24,211 in early trade on 18 August. With US 10-year yields at 4.73% and FII flows under threat, India's energy-import vulnerability is squarely back in focus.
Key Takeaways
Sensex fell 365 points (0.47%) to 77,362 and Nifty50 dropped 76 points (0.31%) to 24,211 in early trade on 18 August .
Brent crude surged above $91 a barrel after Iran signalled a more offensive posture and US President Trump ruled out extending the ceasefire.
US 10-year Treasury yield rose to 4.73% , raising concerns about FII outflows from Indian markets.
Nifty IT was the top sectoral loser, down more than 1% ; Nifty Auto and PSU Bank bucked the trend with gains.
Analysts expect domestic institutional investors to support the market on dips, but warn of continued volatility due to geopolitical uncertainty.
The BSE Sensex slid 365 points or 0.47% to 77,362 in early trade on Tuesday, 18 August, while the Nifty50 fell 76 points or 0.31% to 24,211, as a sharp rebound in crude oil prices above $91 a barrel rattled investor sentiment. Fading hopes of a US-Iran peace deal, combined with rising US Treasury yields, added to the pressure on domestic equities.
What Triggered the Sell-Off
Brent crude — the international oil benchmark — rose 0.60% from its previous close to trade above $91 a barrel, while US West Texas Intermediate (WTI) crude gained more than 1% to $85.37 a barrel. The surge followed reports that Iran signalled it could adopt a more offensive posture, while US President Donald Trump ruled out extending the existing ceasefire arrangement — escalating concerns over potential disruptions to global energy supplies.
Compounding the pressure, the US 10-year Treasury yield climbed to 4.73%, a level analysts said could dampen foreign institutional investor (FII) inflows into emerging markets including India.
Sector-Wise Impact
Nifty IT was the worst-performing sectoral index, slumping more than 1%. Nifty MidSmall IT & Telecom fell 0.62% and Nifty Realty declined 0.4%. Financial services, private banks, media, metals, and FMCG indices also traded marginally in the red.
Not all sectors were under pressure. Nifty Auto gained 0.40% and PSU Bank rose 0.29%, offering pockets of resilience amid the broader weakness.
What Analysts Are Saying
Ahead of Tuesday's opening bell, market analysts flagged the dual headwinds of rising Brent crude and elevated US bond yields as near-term risks for Indian equities. However, they noted that a resilient domestic economy and early signs of an earnings growth turnaround could provide a floor for the markets.
Analysts added that domestic institutional investors (DIIs), which hold substantial deployable funds, could step in to absorb significant dips. Retail investors, they suggested, may use market declines to gradually accumulate quality stocks for the long term. That said, heightened geopolitical uncertainty is likely to keep volatility elevated in the near term.
Broader Context
This is not the first time Iran-US tensions have rattled Indian markets. Energy-import-dependent India is particularly vulnerable to crude oil spikes — every $10 rise in Brent crude adds roughly ₹1 lakh crore to the country's annual import bill, according to government estimates. With the current account deficit already under watch, a sustained crude rally above $90 could complicate the Reserve Bank of India's (RBI) inflation management calculus heading into the second half of the fiscal year.
Markets will closely track further developments on the Iran-US diplomatic front, the trajectory of US Treasury yields, and any FII positioning shifts in the sessions ahead.
Point of View
The RBI's inflation path gets harder, the current account deficit widens, and FII risk appetite shrinks — all simultaneously. The IT sector's additional exposure to US discretionary spending means it absorbs a double hit: global risk-off and dollar-yield pressure. The real question is whether DIIs have the firepower and conviction to hold the line if geopolitical escalation pushes crude toward $95 or beyond. History suggests they can cushion the fall, but not reverse a sustained commodity-driven macro shock.
NationPress
18 Aug 2026
Frequently Asked Questions
Why did Sensex and Nifty fall on 18 August?
Sensex fell 365 points to 77,362 and Nifty dropped 76 points to 24,211 primarily because crude oil prices surged above $91 a barrel following reports that Iran signalled a more offensive posture and US President Trump ruled out extending the ceasefire. Rising US 10-year Treasury yields at 4.73% further dampened investor sentiment.
How high did crude oil prices rise and why?
Brent crude rose above $91 a barrel — up 0.60% from its previous close — while WTI crude gained over 1% to $85.37 a barrel. The spike was driven by escalating Iran-US tensions and fears of potential disruptions to global energy supplies.
Which sectors were hit hardest on the stock market?
Nifty IT was the top loser, falling more than 1%. Nifty MidSmall IT & Telecom dropped 0.62% and Nifty Realty declined 0.4%. Financial services, private banks, media, metals, and FMCG indices also traded lower, while Nifty Auto and PSU Bank posted modest gains.
What is the impact of rising US Treasury yields on Indian markets?
The US 10-year Treasury yield rising to 4.73% makes US assets relatively more attractive, which can prompt foreign institutional investors to reduce exposure to emerging markets like India. Analysts warned this could weigh on FII flows into Indian equities in the near term.
What is the outlook for Indian markets amid the Iran-US tensions?
Analysts expect continued volatility driven by geopolitical uncertainty. However, a resilient domestic economy and signs of earnings growth could provide support. Domestic institutional investors are expected to step in on significant dips, while retail investors are advised to use declines to accumulate quality stocks gradually.
