Those fears powered bets on safe-haven assets, with prices for gold climbing 1% in early Asian trade to $1,503.09. (Photo: Reuters)
Those fears powered bets on safe-haven assets, with prices for gold climbing 1% in early Asian trade to $1,503.09. (Photo: Reuters)

Indian stock markets tumble as oil prices jump

  • Indian equities fell nearly 0.6% as a drone attack on Saudi Aramco early Saturday, pushed crude oil prices higher, stoking inflationary and fiscal slippage concerns
  • The benchmark Sensex was down 0.6%, or 214.28 points, at 37,170.71, while Nifty-50 also declined 0.6%, or 66.50, to 11,009.40 points

Mumbai: Indian equities fell nearly 0.6% on Monday as a drone attack on Saudi Arabia's oil facilities, over the weekend, pushed crude oil prices higher, stoking inflationary and fiscal slippage concerns.

The benchmark Sensex index was down 0.6%, or 214.28 points, at 37,170.71, while Nifty-50 also declined 0.6%, or 66.50, to 11,009.40 points.

Shares of domestic oil marketing companies fell because of the surge in crude prices. Hindustan Petroleum Corp fell 5%, Bharat Petroleum Corp was down 5.05%, and Indian Oil Corp 2.9%. However upstream companies like Oil & Gas Corp Ltd rose 2.7%.

Global benchmark Brent crude futures soared nearly 20% or $11.7 to $66.91 per barrel in early trade today, while US West Texas Intermediate crude futures jumped $8.49, or 15.48%, to $59.76 per barrel.

Analysts said the surge in crude prices coincides with the slowdown in the domestic economy and a persistent rise in consumer price inflation, and therefore is a cause of concern. Recent data showed that retail inflation touched a 10-month high of 3.21% in August.

Meanwhile, Yemen’s Iran-backed Houthi rebel group claimed responsibility for the attack, which hit the world’s biggest oil-processing facility but a senior US official told reporters on Sunday that evidence indicated Tehran was behind it. The attacks heightened investor worries about the geopolitical situation in the region and worsening relations between Iran and the US.

Those fears powered bets on safe-haven assets, with prices for gold climbing 1% in early Asian trade to $1,503.09.

Subdued trade in Asian peers also kept domestic equities under pressure. Moves in Asian share markets were small, with Japan shut for a public holiday. MSCI’s broadest index of Asia-Pacific shares outside Japan was a tick lower at 515.4. Australian shares were down 0.1%, while South Korea’s KOSPI was a tad higher.

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