Market skids on oil price, Sensex loses 642 points

Tracking weak global sentiments following drone attacks on Saudi Arabia’s oil facilities, the BSE benchmark Sensex plunged 642.22 points, or 1.73 per cent, to 36,481.09. The gauge nosedived over 704 points during the session. 

The broader NSE Nifty fell 185.90 points, or 1.69 per cent, to 10,817.60. On the Sensex chart, losses were mainly driven by Hero MotoCorp, Tata Motors, Axis Bank, Tata Steel, Maruti and SBI -- falling as much as 6.19 per cent. Of the 30 scrips of the BSE gauge, HUL, Asian Paints and Infosys were the three gainers. 

All sectoral indices ended in the red, with BSE auto, realty, metal, bankex, finance, oil and gas, energy, teck and IT indices falling up to 3.80 per cent. Broader BSE midcap and smallcap indices followed benchmarks, cracking up to 1.84 per cent. 

After soaring as much as 20 per cent to USD 71.95 per barrel on Monday, Brent crude futures corrected slightly to trade at USD 67.97 per barrel on Tuesday. RBI Governor Shaktikanta Das also warned on Monday that India’s current account and fiscal deficits could worsen if oil prices remain at the elevated level. Many experts also opined that higher oil prices were likely to severely hit economic conditions in India, which imports more than 70 per cent of its oil needs. 

The attack on the world’s largest oil processing facility in Saudi Arabia has led to a record surge in global crude prices. Tracking movement in oil prices, the rupee further depreciated by 18 paise to 71.78 per US dollar. The surge in oil prices comes at a time when the government is making all efforts to boost the economy after India’s GDP growth slumped to the slowest in more than six years. An increase in inflation stoked by higher fuel prices will also leave less space for the central bank to cut interest rates to combat the slowdown. Market participants were also on edge awaiting cues from the upcoming trade talks between China and the US as well as a much-anticipated policy meeting of the Federal Reserve, scheduled to begin later in the day.