Indian equities dropped, reversing earlier gains, as a plan by major oil producers to cut supply to boost the fuel’s price weighed on sentiment.
The benchmark S&P BSE Sensex Index dropped 1% to 34,812.99 at the close in Mumbai, after capping its first consecutive weekly gains in two months. Twenty-six of the 31 Sensex members fell on Monday, paced by a 4.6% decline in Tata Motors after its Jaguar Land Rover unit reported a drop in October sales from a year earlier.
The NSE Nifty 50 Index dropped 1%, erasing a gain of as much as 0.6%. A gauge tracking its volatility jumped 9%, its biggest advance since October 19. Sixteen of the 19 sector indexes compiled by BSE retreated, led by a decline in a gauge of automakers.
Of the 44 Nifty 50 Index companies that have reported quarterly earnings so far, 25 have either matched or beaten analyst predictions.
The Sensex opened on a strong footing at 35,287.49 and advanced to scale a high of 35,333.22 in line with a firming trend at other Asian markets and fresh inflows of funds by foreign investors. However, profit-booking by investors at better prices wiped out initial gains and the Sensex slipped to a low of 34,756.80 before settling 345.56 points, or 0.98%, down at 34,812.99.
During the volatile session, it swung over 576 points on alternate bouts of hectic buying and selling. The gauge had lost 79.13 points on Friday.
The Nifty slipped below the 10,500-mark by falling 103 points, or 0.97%, at 10,482.20. It touched a high of 10,645.50 and a low of 10,464.05 during the day.
Investors also await the release of last month’s consumer inflation data and September’s factory output print after markets close.
Even after oil – India’s biggest import – entered a bear market last week, investors assessed how a plan by producers to cut supply may affect the nation’s economy and corporate profits. Markets are also volatile as traders bet on various possible outcomes of polls ahead of votes in five states, starting Monday, and national elections likely in May 2019.
“It’s mainly the oil, and the direction from here will be decided on whether crude continues to remain low, falls further or reverses its movement after supply cuts by major producers,” said Chokkalingam G, managing director at Equinomics Research & Advisory in Mumbai. “Investors should use election volatility to purchase quality, mid-sized shares that have been beaten down in the recent correction.”
Source: financialexpress.com