Stock Markets Fall for Fourth Day as Crude Oil Prices Surge
- Benchmark indices fell for the fourth straight day on Thursday.
- Surging crude oil prices were cited as the primary reason for the sell-off.
- Investor sentiment remained cautious amid rising input cost concerns.
Markets Extend Losing Streak
Indian equity benchmarks closed lower for the fourth consecutive session on Thursday, as a relentless surge in global crude oil prices rattled investor sentiment. The BSE Sensex fell over 400 points in afternoon trade, while the Nifty50 slipped below the 24,500 mark before recovering some ground.
The sell-off was broad-based, with metal, oil & gas, and banking stocks bearing the brunt of the selling pressure. Market breadth remained negative, with more than two stocks declining for every one that advanced on the BSE.
Crude Oil Spike Weighs Heavy
Traders pointed to the sharp uptick in international crude prices as the primary trigger for the sustained weakness. Brent crude futures climbed past $90 a barrel during the session, stoking fears of higher import costs for India, which meets over 80% of its oil needs through imports.
Rising crude prices typically lead to higher inflation, widen the current account deficit, and put pressure on the rupee. The domestic currency also weakened against the US dollar on Thursday, adding to the market's woes.
Sectoral Impact and Investor Caution
Shares of oil marketing companies like HPCL, BPCL, and IOC fell sharply on concerns over under-recoveries and potential margins squeeze. Auto stocks also came under fire, as analysts flagged rising fuel costs could dampen consumer demand in the coming months. Maruti Suzuki and Tata Motors ended the day in the red.
Foreign portfolio investors have turned net sellers in the past few sessions, adding to the selling pressure. Analysts said the market is now pricing in a prolonged period of elevated crude prices, which could delay any expected interest rate cuts by the Reserve Bank of India.
What Lies Ahead
Market participants will now watch for any fresh cues from global oil producers and the movement of the US dollar index. Traders said the near-term trend for domestic equities will hinge largely on whether crude prices cool off from current highs or continue their upward march.