Surging oil prices drag Indian shares to weekly losses

Indian shares fell on Friday and logged weekly losses as surging oil prices amid Middle East tensions stoked concerns over inflation and company earnings.

The benchmark Nifty 50 fell 0.39% to 22,600, and the Sensex shed 0.17% to 73,123.83.

The indexes lost 2.4% and 2.2% this week, respectively, with sentiment dampened by a rise in Brent crude oil futures to about $114 on energy supply fears after attacks on top exporter Saudi Arabia by Yemen’s Houthis.

“Oil is an immediate pressure point, while the impact of a weaker monsoon on water availability is a slower-burning risk,” said Rushabh Sheth, co-founder and co-CIO at Karma Capital.

“With clear macro headwinds facing markets over the next few quarters, a narrowing market is becoming a reality, meaning fewer stocks are likely to perform well across segments.”

Demand for billionaire Mukesh Ambani’s Jio Platforms record $3.2 billion IPO, which swelled to 13.8 times as of the closing of the secondary market also drained liquidity during the week, analysts at SMC Global and Motilal Oswal Financial Services said.

Fifteen of the 16 major sectors logged weekly losses. The broader small-caps and mid-caps underperformed benchmarks, losing 7.3% and 5.6% and posting their worst week in 20 months.

Consumer durables, energy, FMCG and auto lost 6.4%, 4.6%, 4.3% and 3.5%, as higher oil dampened earnings outlook for the sectors that use crude as a key raw material.

The heaviest-weighted benchmark stock, HDFC Bank, lost 5% during the week after missing quarterly profit estimates.

Axis Bank lost 5.6% on earnings miss, while Bajaj Finance dropped 5.4% as concerns over pressure on lending margins outweighed a rise in quarterly profit.

On the day, Swiggy tumbled 16.8% to a record low, on concerns over the company’s ability to turn around its quick-commerce unit and margins in its food delivery business.

Colgate-Palmolive India dropped 4.8% after the quarterly profit missed estimates.