Indian stocks fall to three-month low as Brent oil surges past $100

Indian shares fell for a third consecutive session on Wednesday to their lowest levels in three months as Brent crude futures rose above $100 a barrel for the first time since late July, fanning concerns about its impact on the economy and inflation.

In a sharp escalation of a six-month-old war in the Middle East, Iran’s Revolutionary Guard said it fired ballistic missiles at a base in Jordan used by the U.S. military and attacked 10 ships on Wednesday, after Washington said it had destroyed five Iranian oil tankers.

The Nifty 50 fell 0.86% to 23,431.50 and the BSE Sensex lost 1.08% to 74,764.23. Both benchmarks logged their lowest closing levels since June 11.

Other Asian stock markets were subdued, as fresh attacks stoked inflation worries ahead of the release of closely watched U.S. inflation data this week.

Thirteen of the 16 major sectors logged losses.

Information technology stocks slid 3.2%, with constituent Coforge tumbling 5.4% after Chairman Om Prakash Bhatt resigned following concerns raised by an internal audit over the company’s board evaluation process.

The IT sector was also under pressure as investors awaited U.S. inflation data this week, which would be key to determine whether the Federal Reserve will raise its interest rate next week.

Higher interest rates can discourage discretionary spending, including on technology, in the United States, which is an important market for IT companies.

The broader small-caps and mid-caps lost 0.5% each.

“Elevated crude oil and commodity prices are the key concerns for investors. While India has so far been able to absorb these shocks, the concerns have resurfaced due to the persistent rise in prices,” said Dharmesh Kant, head of equity research at Cholamandalam Securities.

Energy and metal stocks jumped 0.6% and 1.8%, respectively.

Among individual stocks, Adani Enterprises gained 5.1% after the conglomerate agreed to sell up to a 5.54% stake in its airport unit.