Indian Stocks Decline as Oil Prices and Inflation Weigh on Market Sentiment
Indian equities fell on Friday amid profit-taking, rising inflation, and concerns over oil prices, ending a three-day rally.
NEW DELHI, Nov 13: Indian benchmark indices faced declines on Friday, ending a three-day rally due to rising inflation and volatile oil prices. The BSE Sensex dropped 460 points to 81,441.17, while the NSE Nifty fell by 179.05 points to 25,119.50.
This downturn was influenced by a surge in retail inflation, which reached 6.09% in October, exceeding the Reserve Bank of India’s (RBI) upper tolerance limit for the first time in two years. Food inflation significantly impacted the overall rise, with prices climbing to 8.94% from 7.74% in the previous month.
Vinod Nair, head of research at Geojit Investments, noted, “The rate hike fear is set to test the market rally, as rising inflation concerns weigh on investor sentiment.” Meanwhile, Brent crude oil prices were also a concern, rising to around $96.31 per barrel amidst geopolitical tensions, which added to market volatility.
In the broader market, several major companies struggled, including Mahindra & Mahindra, HDFC Bank, and InterGlobe Aviation, contributing to the overall declines. Conversely, Tech Mahindra, Sun Pharma, HCL Tech, and Hindustan Unilever saw gains.
The negative market trends did not deter foreign institutional investors (FIIs), who continued to invest heavily, with net purchases totaling ₹7,830.60 crore on Thursday, marking their tenth consecutive day of buying. This influx helped elevate market performance over the previous weeks.
Experts suggest that while the recent economic indicators are discouraging, strong earnings from Indian corporations and continued FII participation might support market recovery. Siddhartha Khemka from Motilal Oswal Financial Services affirmed that Indian equities could see slight consolidation but maintain a positive outlook in the longer term.