Indian shares post worst day in 10 weeks on oil spike, proposed insurance curbs

Indian shares fell the most in ten weeks on Thursday as surging oil prices stoked inflation concerns and weighed on sentiment, with financials leading the decline on insurance commission cap concerns.

The National Stock Exchange rose 1.8% in its debut trading session, opening at a modest 0.8% premium to the stock’s issue price.

The Nifty 50 fell 1.64% to 23,063.10, while the BSE Sensex shed 1.67% to 73,580.54, both recording the steepest single-session drop since July 8.

They were down 1.64% and 1.48%, ahead of the closing auction session which also marked the weekly BSE derivatives expiry.

Brent crude climbed 2.4% to $105.6 a barrel. Iranian President Masoud Pezeshkian told the UN General Assembly on Wednesday that Tehran would never surrender to US pressure, while diplomatic talks between the US and Iran showed little sign of progress.

“Crude remains a key variable for India, and the spike in oil prices after briefly slipping below $100 revives supply concerns just as domestic markets found its footing,” said Hemang Gor, senior research analyst of derivatives and technical research at Axis Direct.

“Technically, the undertone remains cautiously bearish as long as Nifty trades below 23,500.”

All the 16 major sectors logged losses. The broader small-caps and mid-caps fell 1.5% and 2.3%, respectively.

Banks and insurers led losses after the country’s insurance regulator proposed overhauling commission rules to cap payouts, link them to product complexity and spread life insurers’ commissions beyond a policy’s first year.

Banks and financials fell 2% and 2.4%, respectively.

PB Fintech tumbled 36% in its worst session ever. Turtlemint Fintech sank 20%.

“Revenue of insurance brokers and banks, non-bank lenders will be hit more than that of individual agents,” said Motilal Oswal analysts, adding “bancassurance is in the crosshairs” and said that the massive regulatory changes, if brought in, will have significant ramifications.