Nifty 50 Falls 146 Points to 24,029 on August 31 as $90 Crude Extends India’s Three-Month Slide

MUMBAI – The 24,000 mark on the NSE Nifty 50 had survived three separate tests through August. On the last trading day of the month, it barely survived a fourth, closing at 24,029.45 after sellers pushed the index to an intraday low of 23,994 in the final hour before a partial recovery on last-minute short-covering.

The Nifty 50 fell 146.20 points, or 0.60 per cent, on August 31, capping a month in which the index shed 3.1 per cent — its worst monthly decline since October 2023 and the third consecutive negative month, a streak last seen in the same period. Brent crude settled above $90 a barrel for the third straight session, driven by US-Iran military exchanges in the Red Sea that have now disrupted two major tanker corridors and threatened to tighten global supply in a market already running below comfortable inventory levels.

For India’s benchmarks, $90 oil carries a specific arithmetic. The country imports roughly 85 per cent of its crude requirements. Every $10 rise in oil adds approximately $14 billion to the annual import bill, worsens the current account, and raises the consumer price index in ways that tie the Reserve Bank of India’s hands on rate cuts that equity markets have been pricing in since April. The RBI’s September 11 monetary policy meeting, once widely expected to deliver a 25-basis-point cut, is now seen as a coin toss by at least four of the six major brokerage houses that cover Indian macro.

Of the 50 Nifty constituents, 12 closed in positive territory and 38 declined, a breadth reading that mirrored the index-level result without exaggerating it. The most significant positive outlier was Tech Mahindra, which added 2.38 per cent after the market absorbed details of a multi-year managed services contract with a European financial institution. Eicher Motors rose 1.41 per cent and Hero MotoCorp gained 1.24 per cent, continuing the domestic two-wheeler sector’s relative insulation from global input-cost pressures.

IndusInd Bank added 1.13 per cent in a session where private-sector banks generally outperformed. Mahindra and Mahindra gained 1.08 per cent, supported by July dispatch data showing passenger vehicle sales at a monthly record. HDFC Bank, which has now advanced in three consecutive sessions, rose 1.87 per cent on what derivatives data suggests was institutional accumulation ahead of the September 11 Reserve Bank of India policy review.

The Nifty Metals sub-index carried the worst of the day’s losses, with Tata Steel falling 2.71 per cent, Hindalco shedding 2.63 per cent, and JSW Steel down 1.89 per cent. Chinese industrial data released Sunday showed manufacturing PMI contracting for the second consecutive month, removing the demand impulse that had supported Indian metal stocks through much of the second quarter. Adani Enterprises shed 2.67 per cent, leading the broader Nifty losers, on volume roughly 40 per cent above its 30-day average.

The IT sector absorbed 1.52 to 2.38 per cent losses across TCS, Infosys, HCL Technologies, Wipro, and LTIMindtree. The Nasdaq fell 1.1 per cent Friday in New York on a US consumer confidence reading that came in below consensus, and Indian IT stocks tend to take their near-term cue from Nasdaq direction rather than domestic fundamentals during macro-uncertain periods. Whether Friday’s US data was noise or signal in a broader softening of American consumer spending remains the question no analyst had answered as of Monday’s close in Mumbai.

The Nifty 50’s intraday chart told a specific story: the index opened 0.4 per cent lower, steadied through the European morning, accelerated to its session low of 23,994 between 2:15 and 2:45 PM IST, and then recovered partially in the final 45 minutes as futures-unwinding and short-covering provided mechanical support. That recovery — roughly 35 points in the last half-hour — was enough to keep the 24,000 level intact on a closing basis, a fact several brokerage desks noted in their end-of-day notes without assigning it particular durability.

May’s close at 24,530 and June’s at 24,322 put the third-quarter benchmark decline at 501 points, or 2.04 per cent, on the Nifty 50 alone. What September brings will depend on whether the US-Iran standoff escalates, whether the RBI chooses the inflation signal or the growth signal on September 11, and whether the Chinese PMI contraction that hit metal stocks today is the beginning of a trend or a one-month aberration. None of those three unknowns had an answer as the Nifty closed its worst August in three years.

Amanda Graham

Amanda Graham is a journalist at The Eastern Herald covering economy, politics, business, and current affairs from around the world.