Indian markets slide as oil surge and global bond yields fuel inflation worries

In September, India’s Sensex and Nifty 50 indices have each slipped more than 3%, with the Sensex shedding over 2,200 points—the largest decline this year. A brief rally on September 15, driven by IT stocks and HDFC Bank, gave way to losses as the session progressed, leaving the Sensex at about 74,510 and the Nifty near 23,280. Market participants cite renewed West Asia tensions, including US-Iran frictions and Houthi attacks, which have lifted US crude to $102.68 and Brent to $107 per barrel.

Simultaneously, benchmark US Treasury yields touched 5% and German yields rose above 3.51%, prompting fears of a global bond-yield reset. Inflation readings in the US and India remain sticky, leading analysts to anticipate possible rate hikes by the RBI and the Federal Open Market Committee in the coming weeks.