Sensex rebounds 1,000 pts as rupee hits 96.3

Market snapshot

Indian equities saw a volatile session on Monday, May 18, 2026, with sharp intraday swings culminating in a late recovery led by IT stocks. The Sensex clawed back more than 1,000 points from the day’s lows, while the Nifty rebounded over 350 points during the afternoon rally. Despite the bounce in frontline indices, broader sentiment stayed fragile as selling persisted in auto, metals, and PSU bank stocks. The day’s risk tone was also shaped by a fresh shock in the currency market, with the Indian rupee falling to an all-time low around 96.3 against the US dollar.

Early trade: steep fall sets the tone

The session began with heavy pressure on benchmarks. In early trade, the Sensex was down 833.20 points at 74,404.79, while the Nifty fell 234 points to 23,401.70. The initial move reflected a risk-off setup amid rising crude oil prices and weak currency cues. Among the Sensex constituents cited as early laggards were Tata Steel, Power Grid, Maruti, Trent, Titan, and HDFC Bank. On the other side, export-oriented names such as Infosys, Tech Mahindra, Bharti Airtel, and Tata Consultancy Services were highlighted as winners.

Afternoon reversal: IT drives the recovery

By afternoon trade, markets erased most of the day’s losses, with IT leading the reversal. The Sensex recovered over 1,000 points from the day’s lows, and the Nifty gained more than 350 points from its bottom. Market commentary during the session attributed the turnaround to strong buying in IT counters, with the Nifty IT index seen around 2.5% higher during the rebound.

Into the close, the Nifty was last seen around 23,645 and finished nearly flat, just about two points higher, after a day marked by sharp intraday volatility. The Nifty IT index ended around 2.7% higher, while the pharma index rose about 0.5%. Private banks were marginally higher, around 0.1% up, but that was not enough to lift broader market mood.

Broader market stays weak

Even as the benchmarks stabilised, the broader market continued to reel under pressure. Selling interest remained visible in auto stocks, metal names, and PSU banks, keeping risk appetite contained beyond the top indices. The divergence between export-heavy sectors and domestic cyclicals was a key feature of the day.

Reports from the previous session (May 15) also showed similar fragility in the broader market, with midcaps and smallcaps falling up to around 0.6% in that session. That backdrop added to caution in Monday’s trade, especially given the renewed stress in the rupee and crude.

Rupee at a record low: 96.3 per dollar in focus

The Indian rupee hit a fresh record low of 96.3 against the US dollar during Monday’s session, after falling 33 paise from Friday’s close, as described in market coverage. The move came amid a combination of rising crude oil prices, heightened uncertainty linked to Iran-related tensions, and higher global bond yields.

Market participant Navnit Damani of Motilal Financial Services was quoted as saying the rupee could weaken further to 98.5 and even 100 per dollar. While that is a market view rather than an outcome, it captured the anxiety around the speed of the depreciation.

Crude oil and global yields add pressure

Crude remained a key macro driver. Brent crude, the global oil benchmark, was cited as trading 1.79% higher at USD 111.2 per barrel in one update. In other related market coverage around the same period, Brent was also described in the USD 108-109 per barrel range, remaining above USD 100.

For India, elevated crude prices raise concerns around imported inflation and the balance of payments, especially when combined with a weakening currency. Higher global yields add another layer of pressure by tightening financial conditions and influencing foreign flows.

Stocks and sectors in focus

The rally in technology names featured both index heavyweights and broader IT-linked stocks. Names referenced as participating in the upmove included Tech Mahindra, Wipro, TCS, and Infosys. The rebound also extended to other technology-adjacent counters mentioned in coverage, including Persistent Systems, Coforge, and Oracle Financial Services.

Pharma supported sentiment on the margin, helping offset weakness in other pockets. In contrast, pressure was visible in autos, metals, and PSU banks, which weighed on the broader market even as the benchmarks recovered.

Volatility and investor positioning

The day’s price action reinforced that markets are currently sensitive to macro headlines. The combination of a record weak rupee, high crude, and shifting global risk sentiment has kept intraday swings large. Prior session data also pointed to elevated volatility, with India VIX described as near 19 and up about 1% in that period.

This environment has encouraged selective sector rotation. Export-linked sectors such as IT can benefit from rupee depreciation through translation gains on dollar revenues, while oil-sensitive and rate-sensitive sectors can face pressure when crude and yields rise together.

Key numbers to track

Market impact: why the mix matters

The session underlined how macro stress can coexist with a sector-led equity rebound. A weak rupee can support export-oriented IT earnings in rupee terms, helping the IT index outperform even when domestic sectors struggle. But currency weakness linked to high oil prices can also increase input costs and inflation risks, which tends to hurt cyclicals and rate-sensitive segments.

The uneven breadth also matters for investors tracking risk appetite beyond headline indices. When leadership narrows to a few sectors, it can signal that market participants are prioritising defensives and dollar earners over broad-based growth exposure.

What to watch next

Investors will continue to track USD/INR levels for signs of stability after the move to 96.3, along with crude prices and global bond yields. Sector positioning is likely to remain sensitive to these variables, with IT and pharma acting as relative buffers during currency-led stress, while autos, metals, and PSU banks remain more exposed to shifting domestic risk sentiment.