Indian markets began the week shakily on Monday, October 26, as a sharp jump in crude oil prices and fresh inflation worries sent investors rushing for the exit in early trade. The Sensex plunged more than 500 points at the open to 72,990.04, while the Nifty slipped over 130 points to 22,524.40, extending a selling streak that has now run for five straight sessions.
The weak start did not last long. Both benchmarks pulled back from early lows and traded in the green later in the morning, as bargain hunters stepped in after last week’s losses. The mood stayed cautious, with oil still above $114 and the rupee close to 95.
Brent crude had crossed $117 a barrel before easing slightly, and was trading above $114 at the time of filing after closing Friday at $116.72, its highest close since late April. The spike follows renewed fears that the West Asia conflict could flare up again.
Why oil is worrying markets so much
India imports most of its crude oil, so every dollar added to the price shows up quickly in the trade bill, inflation and the rupee. India’s crude import bill surged 47 percent to $15.4 billion, as the Indian basket spiked 67 percent year on year in September.
That surge is already feeding into prices at home. The minutes of the Reserve Bank of India’s October meeting show members growing increasingly concerned that inflation is spreading beyond food and fuel. The central bank has signalled that rate cuts are off the table in the near term, and the 10-year government bond yield has hit a three-and-a-half year high. For stock investors, that combination of higher borrowing costs and sticky inflation is a difficult backdrop.
Water storage in key reservoirs has also dropped to 67 percent of capacity, adding to concern about crop output and food prices. The growth story remains intact, but near-term costs are rising fast.
Friday’s damage set the tone
Monday’s fall did not come out of nowhere. On Friday, the Sensex fell 125.56 points, or 0.17 percent, to close at 73,123.83, while the Nifty declined 87.65 points, or 0.39 percent, to settle at 22,600. It was the fourth straight session of losses for both benchmarks, snapping a two-week winning streak and ending the week down 2.2 percent and 2.4 percent respectively.
The pain was far worse beyond the big names. All sectoral indices ended in the red on Friday. For the week, the Nifty Midcap 100 fell 5.6 percent and the Smallcap 100 crashed over 7 percent, its worst week since February 2025. From their recent peaks, midcaps are down more than 13 percent and smallcaps 12.1 percent.
The rupee also weakened for a second consecutive session on Friday, depreciating by 12 paise to close at 94.94 against the US dollar. On Monday it opened marginally stronger at 94.93, but traders said the currency remains under pressure from higher crude prices and a stronger dollar.
What experts are saying
G. Chokkalingam, head of research at Equinomics Research, said rising inflation and tight liquidity remain a concern for markets. While weakness may continue this week, he said, the sharp fall last week could allow some recovery on Monday, and the medium to long term outlook remains firm.
Analysts point to a busy earnings calendar as the next test. Tata Consumer is among the companies reporting results on Monday, along with Paytm, REC and several midcap names. Strong results could steady sentiment, while disappointments could deepen the selloff.
Global cues offered little comfort. Wall Street closed lower on Friday, and Asian markets traded mixed on Monday.
What to watch this week
- Crude oil: A rise toward $120 would add to the import bill and inflation pressure; a pullback below $110 would bring relief.
- The rupee: A break past 95 would be watched closely by importers.
- Quarterly results: Earnings this week will test whether profits justify valuations.
- Global central banks: The US Fed, ECB and Bank of Japan all announce policy decisions this week.
- Key Nifty levels: Friday’s low of 22,372 is immediate support; 22,800 and 23,175 are resistance zones.
For ordinary investors, the message is simple. What matters more than one morning’s swing is whether oil cools, whether inflation data improves, and whether earnings hold up. Until then, volatility is likely to stay high.
FAQs
Why did the Sensex fall over 500 points on Monday?
The Sensex opened at 72,990.04, down more than 500 points, as Brent crude stayed above $114 a barrel, the rupee hovered near 95 against the dollar, and worries about inflation and tight liquidity weighed on sentiment.
How much did the Nifty fall at the open?
The Nifty declined over 130 points to open at 22,524.40 on Monday, October 26, before recovering from its early lows and trading in the green.
Why does high crude oil hurt Indian markets?
India imports most of its crude oil, so higher prices widen the import bill, push up inflation, weaken the rupee and make it harder for the central bank to cut interest rates.
What happened in the market last week?
The Sensex ended the week down 2.2 percent and the Nifty down 2.4 percent, snapping a two-week winning streak, while smallcap stocks crashed over 7 percent in their worst week since February 2025.
Markets remain volatile. This report is based on early trade data on October 26.
