Global Markets Today, August 31, 2026: Asia Falls, Oil Jumps As Middle East Tensions Weigh; Negative Start Seen For India

Mumbai, August 31: Indian equity benchmarks are likely to open on a negative note on Monday, as a fresh escalation in the Middle East rattled Asian markets and pushed oil prices higher, while U.S. and European stock futures pointed to a weak start. 

The latest risk-off move comes after the United States attacked Iranian missile launchers on Larak Island, raising concerns over a wider conflict and potential disruption to energy supplies through the Strait of Hormuz. 

Asian Markets Slide 

Asian stocks fell sharply on Monday, with Japan’s Nikkei down 1.6% and South Korea’s Kospi losing 2%. MSCI’s broadest index of Asia-Pacific shares outside Japan also declined. 

The selling reflected heightened geopolitical uncertainty, with investors worried that further military escalation could disrupt global trade and energy flows. 

The weakness across Asian equities is likely to weigh on Indian stocks at the open. Investors are likely to remain cautious amid elevated geopolitical risks. 

Oil Prices Jump Over 2% 

Crude oil emerged as the biggest trigger for global markets after prices jumped more than 2% following the U.S. attack on Iran’s Larak Island. 

Brent crude rose towards $90 a barrel, while U.S. West Texas Intermediate also advanced, as investors assessed the risk of disruption to oil shipments through the Strait of Hormuz. 

For India, a sustained rise in crude prices is a significant negative. Higher oil prices can increase the country’s import bill, put pressure on the rupee and complicate the inflation outlook. Oil-sensitive sectors could therefore remain in focus. 

Conversely, oil and gas producers such as ONGC and Oil India could find some support from higher crude prices, while airlines, paints, chemicals and other fuel-intensive businesses may face margin concerns if the rally persists. 

US, European Futures Point Lower 

The risk-off mood extended to global equity futures. U.S. stock futures were subdued with S&P 500 futures down 0.4% and Nasdaq futures down 0.5%. European futures also indicated a weaker opening with EUROSTOXX 50 futures down 0.5% and DAX futures down 0.4%. 

Investors are simultaneously assessing the outlook for U.S. interest rates after comments from Federal Reserve officials strengthened expectations that monetary policy could remain tight. 

Higher U.S. Treasury yields could add another layer of pressure on emerging-market equities, including India, by making dollar-denominated assets relatively more attractive. 

What It Means For Indian Markets 

The combination of weak Asian equities, subdued U.S. and European futures, and rising crude prices points to a negative start for Indian markets on Monday. 

The Nifty could face selling pressure at the open, while heavyweight sectors such as financials and information technology may determine whether the benchmarks can recover from any initial decline. 

Investors will also closely track the rupee, foreign institutional flows and developments around the Strait of Hormuz. Any further escalation could trigger another leg higher in crude prices and deepen the risk-off move. 

For now, geopolitical developments and oil are likely to remain the dominant drivers, keeping volatility elevated and limiting risk appetite at the start of the week. 

Source

• Exchanges