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Sensex, Nifty erase entire gains as surging oil prices weigh

Volatility continued despite positive global cues as investors remained cautious on rise in oil price and weak rupee.

Updated: May 10, 2018, 05.09 PM IST
Watch: Sensex drops 73 pts on profit-booking
Watch: Sensex drops 73 pts on profit-booking
NEW DELHI: Snapping their three-day winning streak, Indian equity benchmarks closed Thursday's session in the negative terrain on across the board selling, led by IT, pharma and auto stocks amid mixed global cues.

A surge in the global crude oil prices after the US announced withdrawal from the Iran nuclear deal and imposed financial sanctions on the Islamic republic dented sentiment at home.

Oil import comprises a major portion of India's import bill. An inflated import bill means widening fiscal deficit and current account deficit, which in turn cause depreciation in the rupee. All these constitute key macro triggers for market sentiment.

Moreover, investors remained on the sidelines, awaiting Karnataka election results. Market experts believe that state polls will set the market trend.

The BSE Sensex finished day's trading 73 points, or 0.21 per cent, lower at 35,246, with only 9 stocks advancing and 22 declining.

In the Nifty index, 15 stocks settled in the green, whereas 35 in the red. The index settled 25 points, or 0.23 per cent down at 10,717.

“Volatility continued despite positive global cues as investors remain cautious due to rise in oil price and weak rupee. Banks were under pressure due to rise in yields and earlier recognition of stressed assets. Results so far has not enthused investor’s sentiment whereas next phase of results will be crucial as any deviation will create further downgrades,” said Vinod Nair, Head of Research, Geojit Financial Services.

Midcaps and smallcaps fell more than Sensex, closing the day with losses of 1.52 per cent and 1.36 per cent, respectively.

The pack of Sensex losers included ITC, Tata Consultancy Services, Tata Motors and Sun Pharma.

On the contrary, ONGC, Bharti Airtel, Reliance Industries and HDFC Bank bucked the trend and settled in the green zone.

Oil & gas stocks ONGC, BPCL, HPCL, Indian Oil and Oil India too went home with gains.

The overall market breadth remained negative as 1,890 stocks declined on BSE, compared with 775 advancing.

Shares of Eicher Motors finished 1 per cent up on Thursday after it reported on Wednesday increase in consolidated net profit at Rs 462 crore for the fourth quarter.

Barring energy and oil & gas indices, all sectors closed with losses on BSE. BSE Telecom index closed flat as gains in Airtel and Tata Communications were offset by losses in Reliance Communications, Idea Cellular and Bharti Infratel.

World stocks hit a three-week high on Thursday, buoyed by gains in energy stocks due to rising oil prices, Reuters reported.

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