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Geopolitical tensions, high crude oil prices continue to weigh on Indian markets
Aug-21-2026

Indian markets ended lower for the second straight week amid persistent geopolitical uncertainty and high crude oil prices. Brent crude remained above the $93-a-barrel mark due to unresolved U.S.-Iran tensions, keeping inflation concerns elevated. Renewed pressure from global bond yields also weighed on market sentiment.

Some of the major developments during the week are:

India’s current account deficit stands at $6.2 billion in June: The Reserve Bank of India (RBI) in its preliminary data has showed that India’s current account deficit stood at $6.2 billion in June from a surplus of $1.2 billion in the year-ago month, primarily driven by a widening merchandise trade deficit.

India's GDP growth likely to hit four-quarter low of 7% in Q1FY27: ICRA has estimated India’s GDP growth at a four-quarter low of 7 per cent in the Q1 of the current fiscal year (FY27), down from 7.8 per cent in the March quarter of FY26, with a slower pace of expansion in the services sector.

India’s unemployment rate falls to four-month low of 5.1% in July: Periodic Labour Force Survey (PLFS) has showed that India's unemployment rate (UR) for persons aged 15 years and above fell to a four-month low of 5.1 per cent in July 2026, from 5.5 per cent in June 2026.

Nine key infrastructure sectors’ output growth rises 5.4% in July: The Ministry of Commerce & Industry in its data has showed that nine key infrastructure sectors’ output growth rose to 5.4 per cent in July 2026 following an increase in output of coal, refinery products, cement, electricity and iron ore.

India’s private sector activity improves in August: HSBC Flash India PMI Composite Output Index was up from 54.3 in July to 54.6 in August. Flash Manufacturing PMI eased from 53.5 in July to 52.9 in August, while Flash Services PMI Business Activity Index rose to 54.5 in August from July’s 53.3.

BSE movement for the week

The Bombay Stock Exchange (BSE) Sensex slipped 468.42 points or 0.60% to 77,540.83 during the week ended August 21, 2026. On the sectoral front, S&P BSE Information Technology was down by 787.38 points or 2.61% to 29,334.06, S&P BSE TECK was down by 410.76 points or 2.58% to 15,509.28 and S&P BSE Fast Moving Consumer Goods was down by 312.78 points or 1.71% to 17,980.47 were the top losers, while S&P BSE Realty was up by 110.72 points or 1.58% to 7,108.45, S&P BSE Metal was up by 247.90 points or 0.60% to 41,795.64 and S&P BSE Finance was up by 61.69 points or 0.49% to 12,626.42 were the top gainers.

NSE movement for the week

The Nifty slipped 114.00 points or 0.47% to 24,252.00. On the National Stock Exchange (NSE), Nifty IT was down by 825.50 points or 2.63% to 30,532.25, Nifty Next 50 lost 494.45 points or 0.66% to 73,992.10, and Nifty Mid Cap 100 decreased 46.40 points or 0.07% to 63,735.75, while Bank Nifty was up by 270.85 points or 0.47% to 57,761.95.

FII transactions during the week

Foreign Institutional Investors (FIIs) were net buyers in equity segment in the week, with gross purchases of Rs 57,373.32 crore and gross sales of Rs 50,178.88 crore, leading to a net inflow of Rs 7,194.44 crore. They also stood as net buyers in the debt segment with gross purchases of Rs 5,741.02 crore against gross sales of Rs 5,549.30 crore, resulting in a net inflow of Rs 191.72 crore. In hybrid segment, FIIs stood as net sellers, with gross purchases of Rs 815.03 crore and gross sales of Rs 2,701.03 crore, leading to a net outflow of Rs 1,886.00 crore. (Provisional)

Industry and Economy

Citing risks from fuel and food inflation stemming from West Asia conflict's uncertainty, weak currency, and the likely impact of El Nino on agriculture, India Ratings & Research (Ind-Ra) has projected India's GDP growth to slow down to 6.8 per cent in the current fiscal year (FY27), as against 7.6 per cent in the previous year. Though, the growth projection is tad higher than the 6.7 per cent growth Ind-Ra had projected in May. The agency has forecast quarterly GDP growth at 6.9 per cent, 6.6 per cent, 6.7 per cent, and 6.9 per cent for April-June (Q1), July-September (Q2), October-December (Q3), and January-March (Q4), respectively. The domestic rating agency said it now estimates average crude oil price at $85/bbl in FY27 compared to $95/bbl in May 2026.

Outlook for the coming week

Indian benchmark indices ended lower with cut of around half a percent each amid higher oil prices and factoring in renewed stress in global bond markets.

In the coming week, on the economic data front, investors will be eyeing index of industrial production (IIP) data to be out on August 28, for market direction cues. On the same day, market participants will be looking for the Foreign Exchange Reserves data. Meanwhile, Commerce and Industry Minister Piyush Goyal will be visiting Japan from August 24 to August 27, 2026 to hold discussions on further strengthening trade and investment ties between the two countries.

On the global front, investors would be eyeing economic data from United States (US) starting with Chicago Fed National Activity Index on August 24, followed by Redbook, House Price Index, CB Consumer Confidence on August 25, API Crude Oil Stock, Core PCE Price Index, GDP Growth Rate, EIA Crude Oil Stocks on August 26, Initial Jobless Claims on August 27, Fed Balance Sheet, Non-Farm Payrolls Annual Revision, Michigan Consumer Sentiment and Baker Hughes Oil Rig Count on August 28.

Top Gainers 

  • Eternal up by 3.14% was the top gainer on Nifty for the week - Stocks of Eternal traded with traction as investors expect Zepto’s minimum order value hike to benefit Eternal and Swiggy by their driving net order value growth and potentially supporting market share gains. Zepto has hiked its minimum order value to Rs 199 from Rs 149, in line with Eternal’s Blinkit and Swiggy's Instamart. 
  • HDFC Life Insurance Company up by 3.11% was another gainer on Nifty for the week - HDFC Life Insurance and Jammu and Kashmir Bank have entered into a Corporate Agency Agreement. The partnership will enable J&K Bank customers to access HDFC Life's insurance solutions covering protection, savings, investment and retirement planning, among other needs. The collaboration adds HDFC Life to J&K Bank's existing panel of insurance partners.

Top Losers 

  • Tata Motors Passenger Vehicles (TMPV) down by 9.07% was the top loser of the week on Nifty - TMPV traded under pressure as its Q1 numbers failed to meet market expectations. It reported 80.25% drop in consolidated net profit at Rs 775 crore for Q1FY27 as compared to Rs 3,924 crore for Q1FY26. However, total consolidated income has increased by 9.03% at Rs 96,928 crore for Q1FY27 as compared to Rs 88,903 crore for Q1FY26.
  • HCL Technologies down by 4.93% was another top loser of the week on Nifty - HCL Technologies traded lower along with other Information Technology (IT) stocks amid weakness in US dollar after softer-than-expected US economic data reduced expectations of interest rate hike by US Federal Reserve in September. Majority clients of Indian IT company are based in United States, a weaker dollar directly impacts the margins of these IT companies.

Technical viewpoints

During the week, CNX Nifty touched the highest level of 24,405.20 on August 17 and lowest level of 24,025.65 on August 19. On the last trading day, the Nifty closed at 24,252.00 with weekly loss of 114.00 points or 0.47 percent. For the coming week, 24,050.03 followed by 23,848.07 are likely to be good support levels for the Nifty, while the index may face resistance at 24,429.58 and further at 24,607.17 levels.

US Market

The U.S. markets traded lower during the week amid rising long-term Treasury yields and oil prices after U.S. President Donald Trump announced that no negotiations with Iran were underway and none were scheduled either.

Some of the major developments during the week are:  

U.S. leading economic index rises in July: The Conference Board said its leading economic index rose by 0.2 percent in July after edging down by a revised 0.1 percent in June.

Philly fed index climbs in August: The Philly Fed said its diffusion index for current general activity climbed to 47.4 in August from 41.4 in July.

Weekly jobless claims in U.S. decrease in week ended August 15: Initial jobless claims fell to 206,000, a decrease of 6,000 from the previous week's revised level of 212,000.

U.S. import prices unexpectedly decrease in July: Import prices fell by 0.4 in July following a revised 0.3 percent decrease in June. Street had expected import prices to inch up by 0.1 percent.

Industrial production in U.S. rises slightly less than expected in July: Industrial production crept up by 0.2 percent in July after climbing by upwardly revised 0.3 percent in June. Street expected industrial production to increase by 0.3 percent.

European Market

European markets remained subdued during the passing week, due to concerns over elevated oil prices and bond market volatility.

Some of the major developments during the week are:

Eurozone construction output declines: Construction output fell 1.3 percent month-on-month in June, in contrast to the 0.2 percent rise in May.

Eurozone inflation rises to 2.9% as estimated: Inflation edged up to 2.9 percent in July from 2.8 percent in June. The rate came in line with the estimate published on July 31.

Eurozone current account surplus increases: The euro area current account surplus increased in June, reflecting the rise in primary income. The current account surplus rose to EUR 35 billion from EUR 26 billion in May.

Spain trade gap widens in June: The trade deficit rose to EUR 7.7 billion in June from EUR 3.6 billion in the corresponding month last year. In May, the shortfall was EUR 8.2 billion.

German producer price inflation strongest since 2023: The data from Destatis revealed that producer prices logged an annual increase of 3.0 percent in July, faster than the 1.8 percent rise in June.

Asian Market

Asian markets traded mostly in red during the passing week, as oil prices remained elevated amid the continuing standoff between Washington and Teran over control of the Strait of Hormuz.

Some of the major developments during the week are:

Japan's annual inflation rate accelerates in July: Japan's annual inflation rate accelerated to 1.9% in July 2026 from a marginally revised 1.6% in the previous month, marking the highest reading since December 2025.

Japan core machinery orders jump in June: Japan’s core machinery orders jumped 9.7% month-on-month to JPY 1.06 trillion in June 2026, shifting from a 12.4% drop in the prior month and exceeding market forecasts of a 7.8% gain.

Japan's GDP grows 0.3% QoQ in Q2 2026: Flash data showed Japan’s GDP grew 0.3% quarter-on-quarter in Q2 2026, slowing from Q1’s pace and falling short of market expectations for 0.5%.  

South Korea producer prices growth slows in July: South Korea’s producer prices rose 7.7% year-over-year in July 2026, easing from an 8.5% increase in June. On a monthly basis, the Producer Price Index decreased 0.4% after remaining flat in June.

China keeps loan prime rates unchanged: China maintained its loan prime rates for the fifteenth consecutive month, as widely expected. The People's Bank of China left its one-year loan prime rate unchanged at 3.0%.
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