India benchmark shares fall as inflation woes overshadow RBI support measures

Indian benchmark indexes fell on Monday as investors assessed the Reserve Bank of India’s latest measures to support the rupee, while concerns over elevated oil prices and a weaker monsoon kept risk sentiment subdued.

The Nifty 50 fell 0.7% to 22,363.35, while the BSE Sensex lost 0.76% to 71,924.68.

Both indexes snapped their longest weekly losing streaks in 25-years on Friday after rebounding from multi-year lows, but Monday’s early gains faded.

Investors now await domestic inflation data for further clues on the policy outlook after the RBI raised rates last week.

“Market sentiment remains hostage to crude prices and a weaker monsoon,” said Anita Gandhi, head of institutional business at Arihant Capital Markets, adding that they could “intensify price pressures, weaken near-term consumption and ultimately constrain corporate earnings.”

Persistent foreign outflows and a busy primary market that has diverted liquidity from secondary stocks have overshadowed support from the central bank’s measures and largely resilient quarterly business updates, Gandhi said.

Over the weekend, the RBI redirected oil firms’ dollar purchases and tightened hedging rules, helping the rupee recover 1% from near-record lows in its sharpest rally in six months.

Brent rose to $106 despite US President Donald Trump saying Russia and Ukraine would halt energy attacks, but persistent Middle East tensions kept prices elevated, weighing on world’s third largest oil importer, India.

Twelve of the 16 major sectoral indexes advanced. Small-caps and mid-caps rose 1.4% and 0.1%, respectively, supported by strong domestic fund inflows.

The banking and IT indexes fell 0.6% and 0.8%, respectively, after gaining 1.4% and 3% on Friday.

Apollo Hospitals fell 3.2%, Max Healthcare declined 2% and Medanta edged down 0.3% after the Supreme Court questioned the government on why it could not control the drug market, amid concerns over high mark-ups.

D-Mart operator Avenue Supermarts dropped 4.3% after brokerages flagged margin pressure following its September-quarter results.

Tech Mahindra fell 2.9% on concerns that growing competition from satellite-based mobile services could curb telecom spending.