The Sensex fell sharply today, snapping its three-session winning streak today. The Sensex fell as much 276 points during the day, before ending 227 points lower at 10,240. The Nifty settled at 10,240 after sliding to 10,230 at day’s low. The Sensex had closed at 33,455 yesterday while Nifty at 10,322. Banking stocks led the losers today. The midcap and small stocks also fell sharply. The BSE midcap index was down 1 per cent while smallcap index fell 0.67 per cent.
Brent crude oil, the international benchmark for oil prices, jumped above $65 per barrel for the first time since 2015 after the shutdown of the Forties North Sea pipeline knocked out significant supply from a market that was already tightening due to OPEC-led production cuts.
Investor remained cautious that higher global crude oil prices would stoke inflation and impact future interest rate decisions by the Reserve Bank of India. PSU oil marketing companies and bank stock weighed on broader NSE index. Investors also remained cautious ahead of the inflation and IIP data to be released today. Retail inflation likely breached the RBI’s 4 per cent medium-term target in November after unseasonably heavy rains sent food prices soaring, a Reuters poll showed
RBI last week kept its policy rate steady at 6 per cent as widely expected, but slightly softened its language on inflation by saying risks were “evenly balanced.”
“A sustained rise in crude oil from these levels would pose a risk in terms of imported inflation and its attendant impact on bond yields,” said Sunil Sharma, Chief Invetsment Officer at Sanctum Wealth Management. “However, that’s offset by expectations of December-quarter corporate earnings growth in the double-digits and the pattern of earnings growth will be sustained in 2018.”
The Nifty Bank index fell over 1 per cent after gaining 2.2 per cent in the last three sessions. ICICI Bank, Axis Bank, and HDFC Bank fell over 1 per cent while oil marketers Hindustan Petroleum Corporation Ltd, Indian Oil and Bharat Petroleum Corporation lost as much as 2-4 per cent. (With Agency Inputs)