Sensex falls 460 points as oil above $110 and West Asia fears drag Dalal Street lower

Indian shares fell for a third straight session on Thursday as Brent crude climbed above $110 a barrel and a sell-off swept Asian markets. The Sensex closed about 460 points lower and the Nifty 50 ended near 22,688, down roughly 123 points. Information technology, consumer goods and carmakers were among the weakest groups.

The losses were steeper beneath the benchmarks. The Nifty Midcap index fell about 1% and the Nifty Smallcap index about 0.9% in the afternoon, extending Wednesday’s heavy fall in smaller stocks.

How the day went

The market opened under pressure and never recovered. The Sensex lost 366 points in the first minutes and was down 678.90 points at 73,030.79 within the first hour, with the Nifty 250.90 points lower at 22,568.10. More than 1,800 stocks fell on the NSE in early trade against about 650 that rose.

Some of the damage was repaired by midday. At 3 pm the Sensex was 457.33 points, or 0.62%, down at 73,252.36 and the Nifty 164.15 points, or 0.72%, lower at 22,647.20. Power Grid Corporation, Mahindra & Mahindra and Nestle India were the biggest drags on the Nifty for much of the session, and Lupin, SRF, Maruti Suzuki, NTPC and Tata Motors Passenger Vehicles hit 52-week lows.

Oil and West Asia

The trigger lay outside India. Brent crude rose about 1.7% to $110.68 a barrel after Houthi attacks in Saudi Arabia led the United States to order diplomats to leave its missions in the kingdom. For India, which imports most of its oil, the price revived worries about inflation, already at 5.54% in September, and about further interest-rate rises.

Asian markets fell harder. South Korea’s Kospi dropped more than 3% and Hong Kong’s Hang Seng about 3%, while Japan’s Nikkei 225 lost close to 2%. Wall Street had closed higher overnight.

V K Vijayakumar, chief investment strategist at Geojit Investments, said high crude prices and US bond yields were encouraging bears to build short positions, which explained falls even on days when institutions were buying. Foreign investors bought shares worth ₹1,022.32 crore on Wednesday and domestic institutions ₹1,614.32 crore. Vijayakumar said the market’s recent trend had been “the outperformance of large-caps relative to mid-and small-caps”, and that the gap between expensive smaller stocks and cheaper large ones “cannot continue for long and will get corrected.”

Rupee and stocks in the news

The rupee opened 12 paise weaker at 94.50 to the dollar after closing at a six-week high of 94.38 on Wednesday. Anindya Banerjee, head of commodity and currency research at Kotak Neo, said: “The rupee remains finely balanced within 94-97.” He said dollars coming in for the Jio IPO were adding to supply, but that the balance would be tested if foreign selling quickened or crude moved decisively towards $120.

Results drove the biggest single-stock moves. International Gemological Institute hit its 10% upper limit after a 43% rise in profit, PC Jeweller gained about 9% early and Eternal rose more than 2% on its first day of trading after its numbers. Swiggy fell more than 5% before its results, due later on Thursday along with Hindustan Petroleum, Havells India and Colgate-Palmolive (India).

The Jio Platforms share sale, which closes on Friday, had been subscribed 4.3 times by 2:12 pm on its second day.