Indian stocks fall 0.5% as Brent trades near $114.5 a barrel
Key Facts
Indian stocks fell in morning trading on October 26, as higher oil prices and supply concerns weighed on the market. The Nifty 50 fell 0.5% to 22,485.65 points, while the Sensex declined 0.46% to 72,783.15 points at 9:47 a.m. India time, according to a Reuters report. Brent futures were trading near $114.5 a barrel in the report, after touching a level close to $117 following the Indian market's close on Friday. The report linked the rise in crude to concerns about supply disruptions amid escalating Middle East tensions. The decline followed a losing week for both indexes, as investors awaited the U.S. Federal Reserve's monetary policy decision.
Losses extended across most major sectors, with 12 of 16 sectors declining and information technology stocks falling 1.1%, Reuters reported. Infosys shares fell 2% after the company cut its annual revenue growth forecast. The report said weakness in the company's main market in North America overshadowed revenue that came in above expectations. The moves in the stock and sectors highlight the breadth of pressure on the market during trading, alongside concerns about oil. The declines in the two indexes at 9:47 a.m. were not the session's final closing figures.
Both indexes posted weekly losses ahead of Monday's session: the Nifty 50 fell 2.4% and the Sensex 2.2% in the week ended October 23, declining in all four sessions, according to Reuters. That performance put the start of the new week in the wake of a sustained sell-off, as oil concerns continued to weigh on investor sentiment. India is the world's third-largest oil importer, according to a statement issued by India's Ministry of Petroleum and Natural Gas in March. The ministry said the country holds stocks of crude and major petroleum products to address short-term disruptions. Reliance on oil imports makes crude's trajectory directly relevant to the inflation risks highlighted in the Reuters report.
On economic activity, India's preliminary composite Purchasing Managers' Index reading for October improved compared with September, according to the coverage angle in the materials, but the evidence provided does not include a verified figure for the reading; its figure is therefore not included here. Investors, meanwhile, are awaiting September industrial production data on October 28, according to the economic calendar. The previous reading, for August, was 8.0%. The open source does not provide a forecast for the upcoming reading, leaving the release date and previous figure as the available points of comparison. In the same week, investors are awaiting the Federal Reserve decision scheduled for October 28; a Reuters poll indicated expectations that rates would remain unchanged.