New Delhi: The story continues. As a civil war broke out in Libya, crude oil prices continued to trend up and equities down. The outlook is not brighter either with bloodshed continuing in North Africa. Add to that a budget, which brings in the possibility of an excise tax hike, there is not much cheer.
Both the Sensex and Nifty lost over 0.6% each as did most markets across Asia and Europe. Brent crude which touched a 30-month high on Tuesdaycontinued to rule near those levels.
SENSEX 18178.33 æ -.64%
NIFTY 5437.55 æ -.58%
The equation is simple.
High oil prices = deteriorating macro environment and higher inflation = rate hikes amid already tight liquidity conditions.
No wonder, interest rate sensitive sectors such as banks and real estate were lagging the most. Banks shed 1.75% and realty companies 1.27%.
State Bank of India lost the most in the banking pack. The stock dipped 3.8% on news that parliamentary panel asked government to assess reasons for rising non-performing assets at the bank.
SBI Rs 2,622.30 æ-3.84%
Reliance Industries continued its gains from Tuesday. It gained 1.4% to climb to rs 995.65 after a round of brokerage upgrade following its deal to sell part of its oil assets to BP.
RIL Rs 996.35 Æ 1.15%