Sensex, Nifty tumble as crude oil soars on Saudi attack
The attacks reportedly shut down 6 per cent of the global oil supply.
Analysts said the spike in crude oil is likely to affect the fiscal position of net energy importers such as India in the medium term as uncertainties will keep market sentiment volatile.
The attacks reportedly shut down 6 per cent of the global oil supply. Brent crude was trading over 9 per cent up at $65.88 per barrel, while WTI crude was trading 8.77 per cent higher at $59.66.
Following the global developments, the rupee was trading nearly 61 paise down at 71.53 against the US dollar.
"The spike in global crude prices, even though temporary, will be negative for downstream OMCs (BPCL, HPCL and IOCL) and Castrol. We do not rule out the possibility of moderation in marketing margins on auto fuels — a$10 rise in crude and product prices may require OMCs to increase retail price of diesel and gasoline by Rs 5-6 per liter in the following fortnight. Sharp jump in global crude prices may also put pressure on refining margins amid slowing demand, besides increasing absolute quantum of fuel and loss. On the other hand, higher crude prices may be construed positively for upstream PSUs and GAIL," Kotak Institutional Equities said.
On the macro front, India’s wholesale inflation in August was unchanged at 1.08 per cent in August even as the prices of food items rose, government data showed. The wholesale price index (WPI)based inflation was at 1.08 per cent in July this year and 4.62 per cent in August 2018.
Analysts said that market participants are now looking ahead to the decision on interest rates and the statement from the US Federal Reserve chief after FOMC's two-day meet later this week for further cues on the direction of the market.
Market at a glance
BSE Sensex closed 261.68 points, or 0.70 per cent lower, at 37,123.31, while NSE Nifty ended at 11,003.50, down 72.40 points or 0.65 per cent.
In the 30-pack Sensex, 6 stocks ended in the green and 24 in the red with M&M finishing as worst performer and ONGC the best. SBI, YES Bank, HDFC and Asian Paints joined M&M on the losers’ list, slipping up to 3 per cent.
Tech Mahindra, Sun Pharma, HUL and TCS were among the Sensex stocks that advanced.
The BSE Midcap index declined 0.27 per cent while the BSE Smallcap index advanced 0.64 per cent, outperforming benchmark Sensex.
BSE Oil & Gas index recorded 1.61 per cent loss on the sectoral return chart followed by Energy, Finance and Realty index. While BSE Consumer Durables and FMCG index were the best performers.
In terms of index contribution, TCS, HUL, Tech Mahindra and ONGC were chart toppers while HDFC twins, RIL, L&T and SBI were the top drags on Sensex.
On the global front, Asian shares closed lower as bleak economic data from China dented investors' appetite for riskier assets. MSCI's broadest index of AsiaPacific shares outside Japan slipped 0.4 per cent.
While, European stocks were down after four straight sessions of gains in morning trade as attacks on crude facilities in Saudi Arabia and weak Chinese data added to worries over global growth.