Markets demonstrated a significant intraday recovery on Monday after initially experiencing a drop of nearly 400 points. The Nifty 50 rebounded from a low of 23,317 to close almost flat amidst concerns over a depreciating rupee, Brent crude prices surpassing $100 a barrel, and escalating US-Iran tensions, which kept investors cautious throughout the session.
“Markets endured a volatile day with benchmark indices ending nearly unchanged amid weak global indicators and ongoing macroeconomic issues… the Nifty finished largely flat at 23,649.95,” remarked Ajit Mishra, Senior Vice President of Research at Religare Broking.
The Nifty 50 settled at 23,649.95, gaining just 6.45 points or 0.03 percent, while the BSE Sensex rose by 77.05 points or 0.10 percent, closing at 75,315.04. The index opened with a gap-down of 161 points at 23,482 but saw aggressive buying after the initial hour of trading, allowing it to recover over 330 points from its intraday low.
A pivotal development of the day came from the currency market, where the rupee dropped to a record low near ₹96.40 against the US dollar, marking its fifth consecutive decline. This weakening was driven by robust dollar demand linked to high crude prices and geopolitical instability.
Brent crude remained above $100 a barrel, with domestic crude futures rising nearly 2 percent, surpassing ₹10,200. This trend contributed to India’s escalating import bill and raised inflation concerns.
Gold prices fluctuated significantly during the session, with MCX Gold dipping to around ₹1,57,500 before recovering to approximately ₹1,59,300, supported by a weaker rupee and heightened safe-haven demand. The India VIX also surged by 4.47 percent, closing at 19.63, indicating increased market nervousness.
Geopolitical factors contributed to investor unease, with Donald Trump issuing new warnings to Iran, reports of a drone attack on a UAE nuclear facility, and ongoing tensions over the Strait of Hormuz heightening fears of supply disruptions and risk-averse sentiment globally. Meanwhile, rising bond yields in the US and Japan added pressure, raising concerns that global capital might shift from emerging markets to developed ones.
In sector performance, the IT sector emerged as the standout, with the Nifty IT index surging 2.43 percent as a falling rupee improved earnings prospects for dollar-revenue exporters, enticing bargain hunters into stocks that had suffered due to fears of AI disruption. Tech Mahindra and Infosys were the leading gainers in the Nifty 50.
Pharmaceuticals and healthcare also recorded modest gains, while the Nifty Media and Nifty PSU Bank sectors witnessed declines, alongside losses in the Auto, Consumer Durables, and Realty sectors. Tata Steel and Power Grid were notable losers.
In broader market trends, the Nifty Midcap 100 posted a small decline of 0.15 percent after bouncing back from a swing low zone between 59,460 and 59,560, while the Nifty Smallcap 100 underperformed with a decrease of 1.26 percent. The market breadth was decidedly negative, with 380 of the Nifty 500 stocks closing lower, outnumbering advances significantly.
On the corporate front, Bharti Airtel overtook HDFC Bank in market capitalization, becoming India’s second most valuable listed company. HDFC Bank garnered attention amid reports that its board might seek an extension for interim chairman Keki Mistry.
The government announced it would not significantly raise fertiliser prices, providing some relief to the rural economy, while new restrictions on AC compressor imports were implemented to foster domestic manufacturing, which could raise near-term costs for appliance manufacturers.
Looking ahead, technical analysis indicates that the Nifty encounters immediate resistance in the 23,700–23,800 range, with a more formidable barrier at 24,000, while support remains in the 23,300–23,500 band. With weekly derivatives expiry approaching and the India VIX elevated, options premiums are notably inflated, complicating hedging strategies.
Until credible diplomatic progress is made concerning US-Iran relations and crude prices show signs of receding, market sentiment is likely to remain cautious. Investors will pay close attention to rupee fluctuations, foreign institutional investor flows, and any developments in the Middle East that could affect energy markets.
Published on May 18, 2026.
