Indian stocks slip to six-week low as IT slides, oil worries mount
- Nifty 50 ended 0.5% lower at 23,779.15 and the BSE Sensex shed 0.5% to 76,132.81
Indian shares slipped to their lowest levels in six weeks on Monday, pressured by IT stocks, as escalating tensions in the Middle East and rising expectations of a U.S. rate hike dented risk sentiment.
The Nifty 50 ended 0.5% lower at 23,779.15 and the BSE Sensex shed 0.5% to 76,132.81.
Nifty and Sensex have already shed 2.7% and 2.5%, respectively, over the past four weeks as higher oil prices and global bond yields pressured equities.
“Market instability with a downward bias will continue in the short term due to periodic conflicts and higher crude oil prices,” said G Chokkalingam, founder and head of research at Equinomics Research.
Weaker rainfall and liquidity pressures from a rush of IPOs could also weigh on markets despite supportive domestic macroeconomic conditions, he added.
On Monday, fourteen of the 16 major sectors logged losses.
The IT sub-index fell 2.3% tracking broader weakness after stronger-than-expected U.S. jobs data reinforced expectations of a September Federal Reserve rate hike.
Higher U.S. rates could curb client spending and weigh on Indian IT firms that generate a significant share of their revenue from the United States.
Meanwhile, Brent crude futures rose 0.6% to $96.8 a barrel after U.S. and Iran struck vessels sailing in the Strait of Hormuz and other areas in the latest escalation of Mideast tensions, which could further disrupt energy supply and intensify inflation fears.
Broader small-caps were flat, while mid-caps fell 0.5%.
Among individual stocks, PVR Inox slid 6.1% on reports that an internal investigation flagged alleged 2 billion rupee kickbacks by an executive linked to cinema property projects. The company said preliminary examination did not indicate any evidence of kickbacks.
Shares of Zee Entertainment fell 6.4% after media reports said India’s premier investigating agency filed an FIR against founder and Chairman Emeritus Subhash Chandra and some other individuals for allegedly defrauding LIC Housing Finance. Chandra’s office did not immediately respond to a request for clarification.
Comments