Brent ended the week near $104 a barrel, its third straight weekly gain.

Crude touched almost $110 early in the week after a drone strike from Iraq shut Saudi Arabia's 745-mile East-West pipeline on 10 September, damaging three pumping stations on a line that normally moves 7 million barrels a day around the blocked Strait of Hormuz. Houthi forces also seized Yemen's Red Sea coast and the port of Mokha, putting them within reach of the Bab el-Mandeb chokepoint, and Aramco told two European refiners they would get no crude next month. For India, which imports over 85% of its crude, this is the central negative: it widens the current account deficit, feeds inflation and squeezes Oil & Gas marketing margins, raises fuel costs for Aviation, lifts input costs for Paints & Chemicals, and pushes freight and insurance rates higher for Shipping.

Trump signed a law allowing tariffs of up to 100% on buyers of Russian oil.

On 18 September he signed H.R. 5334, the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026, which names India and China as the main energy buyers in scope and takes effect within 30 days, though he has wide discretion over which countries are hit and at what rate. India currently faces a 10% Section 301 tariff on top of MFN duties, plus 50% on steel and aluminium and 25% on auto components, with smartphones, medicines and energy exempt. Any move toward the headline rate would hit Exporters in textiles, leather, gems and engineering goods hardest, keep a discount on Pharma and Auto component suppliers to the US, and force Oil & Gas refiners to rethink discounted Russian barrels just as global crude trades above $100.

The US Fed raised rates 25 bps to 3.75-4.00%, its first hike since 2023.

The decision on 16 September was unanimous and chair Kevin Warsh signalled at least one more increase this year, with sixteen of eighteen participants pencilling in a further move; markets now put roughly 60% odds on another hike next month. This followed August CPI at 3.4% year on year and core at 2.4%, with petrol up 27.4% from a year earlier. A higher-for-longer US rate path keeps foreign money flowing out of emerging markets, which is why FIIs sold Rs 3,208.76 crore in a single session and the rupee sat at 95.89. That pressures Banking through weaker flows and a constrained RBI, hurts Realty where rate sensitivity is highest, and caps valuations for IT even though a weaker rupee helps reported revenue.

The US 10-year Treasury yield sits near 5.00%, up 27 bps in a month.

It settled at 4.995% on 18 September, the 2-year rose to 4.741% at a 52-week high and the 30-year eased to 5.327%, flattening the curve to its narrowest 2s10s spread since March 2025. Global equity funds recorded their largest weekly outflow in nine months in the week to 16 September. When the world's risk-free rate is at 5%, foreign investors demand a much higher return to hold Indian equities, which is the mechanical reason the Sensex has now fallen for six weeks. This weighs most on Banking, where bond portfolios mark down and credit growth slows, on Realty, and on richly valued IT names whose long-dated earnings are discounted harder.

The Bank of Japan raised its policy rate to 1.25%, a 31-year high.

The 18 September hike came with two dissents, and Governor Ueda pointed to energy-driven inflation and wage pressure while refusing to lean against currency moves, so the yen stayed weak near 157 per dollar rather than strengthening. The ECB had already raised its deposit rate to 2.50% on 10 September, with markets pricing a 67% chance of a further move to 2.75% on 29 October, while the Bank of England held at 3.75% on 17 September. Every major central bank is now tightening at once, which raises the global cost of capital and makes dollar and yen funding more expensive. That tightens conditions for Indian Banking and for leveraged Metals producers who borrow offshore, and keeps a lid on Indian equity valuations broadly.

LME aluminium is near $3,297 a tonne with stocks at a 36-year low.

The metal is up about 2% in a month and 23% on the year, with Gulf Cooperation Council output down 44% year on year in July because the Middle East war has crippled regional smelters that once supplied about 10% of global production. Rising Chinese exports, up 17.2% year on year in August, only partly offset that. High LME prices are a clear positive for Indian Metals producers such as integrated aluminium and zinc makers, who sell at global benchmarks while their power and bauxite costs are domestic. The offset is the 50% US tariff on steel and aluminium, which keeps the American market largely closed to Indian mills, so the gain comes from price rather than volume.

Gold spot rose to about $4,369 an ounce, its first weekly gain in four weeks.

Silver jumped 3% on Friday to $67.18. The move came as crude pulled back from above $107 midweek after Aramco began shifting exports back to the Persian Gulf, which eased inflation fears and dragged Treasury yields off multi-year highs. For Indian investors the signal is mixed. The crude retreat is genuine relief for Oil & Gas refiners and for Paints & Chemicals input costs, and it was the main reason the Nifty recovered in the second half of the week. But gold above $4,300 keeps import demand for bullion high and adds to the current account strain, and it reflects continued hedging against war and inflation rather than confidence in risk assets.

Sensex fell 0.65% to 74,295, a sixth straight weekly loss, the longest since 2020.

The Nifty held up better at 23,346, down 0.22%, as domestic institutions and retail SIP money absorbed foreign selling, and mid and small caps outperformed large caps. Liquidity was also drained by NSE's Rs 22,569-crore IPO, which was fully subscribed on day two and pulled capital out of the secondary market, while a governance crisis at the Tata Group hit index heavyweights. Sector moves were telling: Realty and Metals were the strongest on Friday, FMCG and healthcare attracted defensive buying, while the Nifty IT index fell about 1% on worries about global technology spending, and Consumer Durables weakened on higher rates and pricing pressure. Separately, the global AI memory shortage, with Intel warning on supply and Micron guiding to roughly $50 billion of quarterly revenue, means rising DRAM and NAND costs for Indian electronics assemblers, another headwind for Consumer Durables.