Crude, Conflict and Capital Flows Shape the Fortnight

Geopolitical tensions kept global markets cautious during the fortnight as the U.S.-Iran conflict intensified and concerns around the Strait of Hormuz resurfaced. Attacks on oil tankers and slower shipping activity through the key energy route raised fears of supply disruptions, pushing crude prices higher.[EasyDNNnews:PaidContentStart]

Brent and WTI gained more than 5 per cent during the previous week, with Brent trading near USD 90 per barrel. For India, which imports around 85-88 per cent of its crude requirement, elevated oil prices remained a key macro risk.

Despite the uncertain global backdrop, Indian benchmark indices remained largely range-bound during the fortnight. The Nifty 50 slipped 0.07 per cent, while the BSE Sensex declined 0.03 per cent. Interestingly, India VIX declined around 5 per cent during the period, indicating that domestic volatility remained contained despite geopolitical concerns.

Sectoral performance was stronger than the headline indices. The auto sector emerged as the top performer, gaining 2.20 per cent during the fortnight, supported by record July passenger vehicle sales, which rose 34 per cent year-on-year to 4.58 lakh units. IT followed with a gain of 2.16 per cent, aided by improving global sentiment and fresh deal activity, including Infosys’ 10-year agreement with Crocs reportedly worth over USD 200 million. The sector also saw BSE set to replace Wipro in the Nifty 50 from September 30, 2026.

Institutional flows remained supportive during the fortnight, with FIIs recording net purchases of ₹4,115.93 crore and DIIs investing a much higher ₹17,053 crore. The combined buying helped sustain liquidity and supported market resilience despite global uncertainties.

On the macro front, India’s retail inflation rose to 4.45 per cent in July 2026 from 4.38 per cent in June. Rural inflation stood at 4.84 per cent, urban inflation at 3.96 per cent, and food inflation increased to 5.52 per cent. The rise in inflation, combined with elevated crude prices, kept concerns around input costs and the interest-rate outlook alive.

Geopolitical tensions and elevated crude prices kept markets cautious, while domestic inflows, sectoral strength and lower volatility offered support.

Corporate developments also influenced sentiment. Tata Group stocks declined by up to 5 per cent after the announcement that N. Chandrasekaran would not seek reappointment as Tata Sons chairman after his current term ends in February 2027.

Overall, the fortnight reflected a balance between global risks and domestic resilience, withstrong institutional support, sectoral gains and lower volatility helping the market absorb multiple headwinds.

Going ahead, crude oil, geopolitical developments, institutional flows and the remaining Q1 earnings season are likely to remain the key market triggers.

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