The Sensex fell 1,045 points to 71,593.24 and the Nifty lost 371 points to 22,231.80 on October 8 as Brent crude rose above $104, foreign investors kept selling and the RBI’s rate hike weighed on sentiment.
The three pressures reinforce each other. Higher oil raises India’s import bill and inflation, foreign selling pushes the rupee down, and a rate hike raises borrowing costs, which weighs on rate-sensitive sectors.
The damage was broad. Midcap and smallcap indices fell more than 2%, and metal, realty and oil and gas indices fell between 2.5% and 3.5%, according to Kotak Neo.
Kotak Neo said that the weak trend is likely to persist while oil stays elevated and foreign investors keep selling.
This report is not investment advice, and market direction can change quickly.
Adani Enterprises, JSW Steel and ITC were among the biggest Nifty losers.
Brent crude was above $102 in early trade and stood at $104.47 a barrel in the afternoon, according to Kotak Neo.
WTI November futures were at $91.95 a barrel.
Business Standard’s close report carried the headline that oil tops $104 and that the volatility index jumped 10%.
Elevated crude prices were tied to Middle East supply concerns, attacks on ships in the Gulf and the Strait of Hormuz.
Rising US bond yields and persistent foreign institutional investor selling also weighed on the market.
The RBI had raised the repo rate by 25 basis points to 5.50% on October 7, its first hike since February 2023.
Kotak Neo said that the weak trend is likely to persist while oil stays elevated and foreign investors keep selling.
On October 6, the Sensex had closed at 73,067.81 and the Nifty at 22,776.10.
From that close, the Sensex has lost about 1,475 points in two sessions and the Nifty about 544 points.
On MCX, December gold futures were at Rs 1,49,300 per 10 grams, up 0.13%, and silver was at Rs 2,21,440 a kg, down 0.95%.
Dalal Street, Mumbai (file image), Wikimedia Commons, CC BY-SA 3.0