Indian stock markets started the week with a sharp fall. The rise in crude oil prices once again hit investor confidence hard. The Sensex dropped 1,003 points, or 1.36%, to 72,892.63. The NSE Nifty50 fell 313 points, or 1.35%, to 22,863.30. Even GIFT Nifty futures were down 88.5 points or 0.38%, to 23,100. All 30 Sensex stocks were in the red around 9:30 am. The fall came after seven straight sessions of losses, which had already taken the indices down by nearly 6%.
Crude oil was a major reason behind the latest fall. Brent crude rose 1.5% to around USD 106 a barrel as tensions in the Middle East continued. Disruptions around the Strait of Hormuz have also continued. This matters to India because the country is the world’s third-largest crude importer.
Higher oil prices can increase India’s import bill, push up inflation and raise costs for companies. The rupee also fell 20 paise against the US dollar. Foreign investors sold Rs 3,694 crore of Indian shares on Friday, taking their September selling to USD 1.8 billion.
A rise in oil prices won’t stop at petrol and diesel. Transport, manufacturing and other business costs can also rise. Companies may then have to absorb those costs or pass them on to customers.
