Markets wipe out opening gains to trade in red amid uncertainty over US-Iran deal

Indian equity benchmarks made slightly positive start on Monday but soon lost momentum and slipped below neutral lines after surge in crude oil prices amid uncertainty over a potential deal between the US and Iran. Iran on Sunday said that a deal with Oman defining new shipping lanes in the Strait of Hormuz was in its final stages but reiterated ‌that the waterway would only reopen once the United States met other conditions.

The BSE Sensex was trading lower with around 0.20% cut in early deals amid selling pressure in PSU and Utilities, while buying in metal and IT stocks limit the downside. Also, expectations of continued earnings growth aided the sentiments. Titan Company led the gainers on the BSE after it reported a strong June-quarter performance.

The Nifty 50 traded marginally lower. However, downside remained capped supported by foreign fund buying. NSE data showed that foreign institutional investors (FIIs) turned net buyers in Indian equities on August 7, 2026, purchasing a net amount of Rs 480.24 crore after two consecutive sessions of selling.

On the global front, Asian markets were trading higher, after Wall Street equities gained, as softer US labour market data reduced fears of a near-term Federal Reserve rate hike. Meanwhile, the Bank of Japan policy makers have warned of mounting inflation risks that could require a nimble, faster-than-expected pace of interest rate increases, a summary of opinions at their July meeting showed, boosting the case for a September hike.

The BSE Sensex is currently trading at 78347.84, down by 151.33 points or 0.19% after trading in a range of 78298.92 and 78676.98. There were 13 stocks advancing against 17 stocks declining on the index.

The top gaining sectoral indices on the BSE were Metal up by 0.50%, Auto up by 0.50%, IT up by 0.34%, Consumer Durables up by 0.29% and Basic Materials up by 0.26%, while PSU down by 0.69%, Utilities down by 0.55%, Realty down by 0.41%, Energy down by 0.37% and Power down by 0.36% were the top losing indices on BSE.

The top gainers on the Sensex were Titan Company up by 1.30%, Tata Steel up by 0.72%, Infosys up by 0.68%, HCL Technologies up by 0.66% and Tech Mahindra up by 0.49%. On the flip side, State Bank of India down by 1.20%, Kotak Mahindra Bank down by 0.99%, NTPC down by 0.94%, Eternal down by 0.90% and Power Grid down by 0.81% were the top losers.

Meanwhile, think tank Global Trade Research Initiative (GTRI) has said that the US Senate's approval of a bill imposing sanctions on Russia could expose Indian exports to additional tariffs of up to 100 per cent if India continues to buy Russian crude oil. The US Senate voted overwhelmingly to approve the bipartisan Lindsey O. Graham Sanctioning Russia and Iran Act of 2026, which seeks to penalise Russia and major buyers of its petroleum products, including China and India, on the grounds that such trade helps finance the war in Ukraine. The bill, passed on August 7 by an 86-11 vote, would give US President Donald Trump the authority to impose tariffs of up to 100 per cent on goods from countries that rank among the five largest buyers of Russian oil and gas. The bill now returns to the House of Representatives.

GTRI said India, the second-largest buyer of Russian crude, could therefore face significant tariff exposure. Russia accounted for 30.3 per cent of India's crude oil imports in FY2026, worth $40.8 billion. According to the think tank, discounted Russian crude has helped lower India's import bill, strengthen energy security and contain inflation. Giving up these supplies under external pressure, it said, would impose significant costs on the Indian economy. At the same time, India has been substantially increasing its energy purchases from the US. American crude oil imports rose from $6.6 billion to $9.1 billion in FY2026, while India's total energy purchases from the US reached $12.5 billion. These included $1.4 billion worth of LNG, $896 million of LPG and $861 million of petroleum coke. GTRI Founder Ajay Srivastava said these figures show that Washington cannot credibly claim that India is shutting out American energy.

Srivastava said that although China buys more Russian crude than India, the country could face greater pressure from Washington because the bill gives the US president wide discretion to impose country-specific tariffs. He noted that the US has previously penalised India while sparing China. In July 2025, Washington imposed an additional 25 per cent tariff on Indian goods linked to Russian oil purchases, which was withdrawn only in February 2026. Srivastava said India should not allow tariff threats to dictate its energy policy. He said 'As long as Russian crude remains commercially attractive, India should continue buying it. Differences with Washington must be managed through firm negotiation -- not by extending unilateral concessions that raise India's energy costs and weaken its strategic autonomy'.

Explaining the provisions of the bill, GTRI said it does not automatically impose a 100 per cent tariff on India. Section 113 directs the US president to impose additional tariffs of up to 100 per cent on goods from countries that continue buying Russian crude oil or natural gas 30 days after the law takes effect and rank among the five largest buyers of Russian energy. The bill's sponsors have identified China, India, Slovakia, Hungary and Azerbaijan as the five largest buyers of Russian crude. Any additional tariffs imposed under the legislation would be added to existing US duties, including those imposed under Sections 301 and 232, as well as anti-dumping and countervailing duties.

The CNX Nifty is currently trading at 24521.15, down by 49.50 points or 0.20% after trading in a range of 24511.10 and 24620.95. There were 19 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were Tech Mahindra up by 1.47%, Tata Steel up by 1.28%, Titan Company up by 1.27%, Grasim Industries up by 0.97% and Cipla up by 0.62%. On the flip side, HDFC Life Insurance down by 1.37%, State Bank of India down by 1.37%, Eternal down by 0.97%, Power Grid down by 0.96% and Reliance Industries down by 0.85% were the top losers.

Asian markets were trading higher; Nikkei 225 surged 1257.29 points or 1.92% to 66,864.00, Taiwan Weighted jumped 761.33 points or 1.72% to 44,987.24, Hang Seng advanced 189.97 points or 0.73% to 25,858.00, KOSPI strengthened 39.34 points or 0.63% to 6,298.11, Jakarta Composite gained 8.92 points or 0.14% to 6,418.57 and Shanghai Composite was up by 7.87 points or 0.2% to 3,947.91.