Sunday, October 1, 2023

As oil prices rise, Indian stocks fall; US inflation data is in the spotlight

As oil prices surged and investors awaited U.S. inflation data for clues on the Federal Reserve’s rate hike plans, Indian equities gave up early gains on Wednesday, extending losses for the fourth straight session.

As of 0457 GMT, the NSE Nifty 50 index (.NSEI) was down 0.78 percent at 16,114.10, and the S&P BSE Sensex (.BSESN) was down 0.85 percent at 53,900.18.

“Since the benchmark broke 16,400 levels, there have been no signs of Nifty settling. The general atmosphere is still gloomy, so there isn’t much purchasing interest, and the mindset is sell-on-rise “Yesha Shah, Samco Securities’ head of equity research, agreed.

Oil climbed on Wednesday due to supply concerns as the European Union attempted to secure support for a Russian oil boycott, and big producers cautioned that if demand rises, they may struggle to cover the gap.

“One of the reasons given India’s vulnerability (for the decline in stocks) is a rise in oil prices,” Shah said, “but I largely think it is in anticipation of the inflation print that is going to come for the US and India.”
According to a Reuters poll, India’s retail inflation likely hit an 18-month high in April, owing to surging fuel and food prices.
On Thursday at 1200 GMT, India’s consumer price inflation data will be announced.

According to Refinitiv data, foreign investors have sold $1.82 billion worth of Indian stocks so far this month, including $374 million worth of stocks on Tuesday, the fourth consecutive day of net selling.
Nifty’s auto (.NIFTYAUTO), FMCG (.NIFTYFMCG), and IT (.NIFTYIT) sub-indices all dropped between 0.7 and 1%.
Adani Ports (APSE.NS), a Nifty 50 component, is expected to release quarterly results later in the day.
Following close to two-year lows in the previous session, Asian equities crept higher on Wednesday, ahead of closely watched US inflation data scheduled at 1230 GMT.


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