Indian shares and rupee declined.
Middle East tensions drove oil prices up.
Foreign investors sold $23.52 billion in stocks.
Atlas AI
Indian shares fell and the rupee hit a record low in early trade on Monday, May 18, after oil prices jumped following a drone attack on a nuclear power plant in the United Arab Emirates. The move in crude weighed on risk appetite across Asian markets and pushed global bond yields higher, according to market participants.
The Nifty 50 index was down 1.26% at 23,347.2, while the BSE Sensex fell 1.20% to 74,335.62 as of 10:05 a.m. IST. Broader stocks underperformed, with small-caps down 2.1% and mid-caps off 1.6%.
Brent crude rose to $112 a barrel, a two-week high. Other Asian markets fell 0.8%, the repoSources said.
Sentiment was also dampened after U.S. President Donald Trump warned that “the clock is ticking” for Iran, as efforts to end the Middle East conflict appeared to have stalled, according to the report.
Oil jump adds pressure on rupee and equities
The rupee weakened to an all-time low as higher oil prices added to concerns about India’s trade balance. Higher crude prices can widen the trade deficit and increase demand for dollars, putting pressure on the currency.
Foreign portfolio investors have sold Indian stocks worth $23.52 billion so far this year, already surpassing record annual outflows of 2025, according to the report. Market participants linked the persistent selling to elevated crude prices and pressure on the rupee.
G. Chokkalingam, founder and head of research at Equinomics Research, said markets were likely to remain under pressure in the near term as drone attacks in the Middle East accelerated the surge in oil prices.
Big stocks fall as most sectors trade lower
Fifteen of the 16 major sectors declined in early trade, the repoSources said. Among heavyweight stocks, HDFC Bank and Reliance Industries fell 1.4% and 1%, respectively.
Tata Steel dropped 5% after reporting a smaller-than-expected quarterly profit.
Investors are expected to watch oil prices and further signals on the Middle East conflict for the next moves in the rupee and Indian equities.
