Indian markets fell sharply on Monday amid a spike in global oil prices and earnings disappointment by index heavyweights HDFC Bank, Reliance Industries and Tata Consultancy Services (TCS). The Nifty index logged its biggest single day fall in nearly four months, declining 128 points, or 1 per cent, to 12,225. The Sensex ended at 41,529, down 416 points, or 1 per cent — the most since January 6. Both the indices had hit fresh highs in early trade, but failed to sustain the gains after most global markets came under selling pressure as oil prices jumped because of two large crude production bases in Libya shutting down. The India Vix index, a gauge for market volatility, spiked 9.1 per cent.
Brent crude prices surged past the $65 a barrel level as unrest hit key production regions. Iraq temporarily stopped output at an oil field on Sunday, while Libyan production almost ground to a halt after armed forces shut down a pipeline.
Jitters in the oil market have tempered recent optimism, said analysts.
The latest decline in the markets came after a sharp run over the past one month, spurred by easy liquidity conditions globally. Local investors were seen taking money off the table judging recent gains as excessive. Domestic institutional investors (DIIs) sold shares worth Rs 1,420 crore, while net-buying by overseas investor stood at just Rs 6 crore, provisional data provided by stock exchanges showed.
Reliance Industries’ shares fell 3.1 per cent and accounted for 147-point in the Sensex. The Street was disappointed by weak numbers for the petrochemical business during the December quarter, said analysts. Shares of HDFC Bank, India’s largest bank by market value, fell 1.8 per cent and contributed 93 points to the fall. The private sector lender reported a 33 per cent jump in quarterly profit but investors were concerned over slippages in the agriculture sector.
Kotak Mahindra Bank fell 4.7 per cent — most among Sensex and Nifty components. The bank reported its net income for the third quarter, which was 4.5 per cent below the average analyst estimate.
According to Bloomberg, out of the seven Nifty companies that have posted earnings, four have meet expectations, while three have missed Street estimates.
Source: Maalaimalar
