Sensex, Nifty Recover in Closing Auction; Rupee Slips, Crude Holds Above $100

The Indian benchmark indices ended Thursday’s session on a positive note, but the recovery lacked strength as global uncertainties continued to weigh on sentiment. Persistent tensions in the Middle East kept crude oil prices above the $100 per barrel mark, raising concerns over inflation and currency stability. Investors also remained cautious ahead of key US economic data and the upcoming Federal Reserve policy decision.

The Nifty 50 began the session at 23,446.60 and remained volatile throughout the day. The index attempted to move higher in the first half, reaching an intraday high of 23,494.95, but selling pressure at elevated levels dragged it towards the day’s low of 23,380.10.

However, buying interest emerged during the closing auction session, helping the benchmark indices recover from their intraday lows. The Nifty 50 closed above the 23,450 level, while the Sensex managed to settle above the 74,900 mark.

At the close, the Nifty 50 ended at 23,477.80, gaining 46.80 points or 0.20%, while the Sensex advanced 138.38 points to close at 74,902.60. The Bank Nifty outperformed the broader market and gained 0.31%. Meanwhile, India VIX declined 1.44% and slipped below the 12 level, indicating some moderation in volatility.

Crude Oil Rally Keeps Investors Cautious; Rupee Hits Over One-Week Low

The ongoing escalation in Middle East tensions continued to support crude oil prices, with Brent crude sustaining levels above $100 per barrel. Concerns over potential disruptions in energy supplies from the region kept investors cautious.

Brent crude prices gained around 0.8% to trade near $102 per barrel, while WTI crude also moved higher following a strong rally in the previous session. Market participants are closely monitoring China’s crude import activity, as demand from the world’s largest importer could influence the sustainability of current oil prices.

For India, higher crude prices remain a key concern due to the country’s dependence on oil imports. Rising energy costs could impact inflation, corporate margins, aviation companies, and oil marketing companies.

Meanwhile, the Indian rupee extended its decline for the third consecutive session as rising oil prices, increased dollar demand due to derivative maturities, and corporate hedging pressure weighed on the currency.

The rupee weakened 0.3% to close at 95.44 per dollar, marking its steepest single-day decline since mid-July and its lowest level in more than a week.

Equity Mutual Funds Continue to Witness Strong Inflows

Investor interest in equity mutual funds remained strong in August 2026, with net inflows rising 19% month-on-month to ₹29,328.62 crore.

Small-cap funds attracted the highest inflows of ₹7,973.33 crore, followed by mid-cap and flexi-cap funds, highlighting continued investor preference for long-term wealth creation opportunities.

Gold ETFs also witnessed increased demand as investors looked to diversify portfolios amid uncertainty across global markets. While debt funds recorded outflows after strong inflows in July, hybrid funds continued to attract investor interest.

Broader Markets Under Pressure

The broader market indices remained weak despite gains in benchmark indices.

The Nifty Midcap 100 index declined 0.38%, while the Nifty Smallcap 100 index slipped 0.07%.

Market breadth remained negative, indicating that the broader participation was weak despite the recovery in frontline stocks.

Financial Stocks Lead Sectoral Gains; Metals Decline

Sectoral performance remained mixed, with only four out of the 11 major sectoral indices closing higher.

The Nifty Financial Services index emerged as the top performer, gaining 0.57%, ending its three-session losing streak. HDFC Life was among the key contributors, with the stock rising more than 2%.

On the other hand, the Nifty Metal index declined 0.65%, becoming the biggest sectoral laggard. Twelve out of 15 constituents ended the session in negative territory.

European Markets Remain Mixed Amid Global Uncertainty

European markets traded with mixed momentum during the ongoing session as investors assessed commodity price movements, global risk factors, and economic developments.

Germany’s DAX index traded marginally higher at 25,560.19, gaining 5.91 points or 0.02%. France’s CAC 40 advanced 11.90 points or 0.15% to 8,168.57, while the UK’s FTSE 100 declined 40.99 points or 0.38% to 10,629.07.

The European indices remained largely range-bound as investors balanced concerns over geopolitical developments with expectations around global interest rate movements.

US Futures Indicate Cautious Opening on Wall Street

US stock futures traded mixed ahead of the market opening, reflecting a cautious approach among investors amid uncertainty over global markets, interest rates, and economic indicators.

The Dow Jones futures traded at 52,526.00, gaining 101 points or 0.19%, while S&P 500 futures rose 7.75 points or 0.10% to 7,651.50. Meanwhile, Nasdaq 100 futures declined 52.25 points or 0.18% to 29,396.50.

The mixed trend indicated that investors remained watchful of upcoming economic data and developments influencing monetary policy expectations.