Overview
- Renewed U.S.-Iran naval strikes and Iran's planned exclusion zones have left the Strait of Hormuz effectively restricted and pushed Brent toward the mid-to-high $90s, adding an 8–10% oil premium that directly raises India’s import bill and input costs.
- U.S. payrolls surprised to the upside on Sept. 4 with a 162,000 gain, which lifted Treasury yields to multi-year highs near 4.78% and increased market odds of a Federal Reserve rate move before the Sept. 16 meeting.
- The combination of higher oil and rising global yields has made Indian equities more sensitive to external cues, producing intra-day swings and a weak open to the week for Sensex and Nifty as investors reposition ahead of U.S. CPI.
- Foreign portfolio investors were net sellers in early September, withdrawing roughly Rs 7,443 crore, and the crowded September IPO pipeline is set to absorb domestic liquidity, both of which could prolong selling pressure.
- What to watch next: Friday’s U.S. CPI print for clues on Fed policy, any de-escalation or reopening of Hormuz shipping for oil relief, and daily FPI flow and rupee moves that will determine how long volatility lasts.