Indian shares fell on Tuesday as oil prices spiked to above $91 a barrel, with a temporary U.S.-Iran ceasefire expiring and hopes for a new deal fading.
Iran's indication that it could adopt a more offensive posture and U.S. President Donald Trump ruling out an extension to the ceasefire arrangement have intensified concerns over potential disruptions to energy supplies. Get the latest news from India and how it matters to the world with the Reuters India File newsletter. Sign up here. The prospect of sustained higher crude prices could also rekindle inflation worries for India, the world's third-largest oil importer.
The Nifty 50 (.NSEI), opens new tab fell 0.27% to 24,219.80 and the BSE Sensex (.BSESN), opens new tab lost 0.40% to 77,418.06, as of 9:48 a.m. IST.
Nine of the 16 major sectors declined. The IT index (.NIFTYIT), opens new tab fell 1.4%, topping sectoral losses. The broader small-caps (.NIFSMCP100), opens new tab traded flat while mid-caps (.NIFMDCP100), opens new tab fell 0.5%. "Two developments during the last several hours are likely to impact the market today, one, Brent crude has spiked above $91 on escalation of Mideast tensions and two, the U.S. 10-year bond yield has risen, which is negative for foreign inflows," said VK Vijayakumar, chief investment strategist at Geojit Investments.
Foreign portfolio investors were net sellers in Indian markets on Monday, with outflows worth 25.35 billion rupees ($265.00 million), the highest in three weeks. Higher U.S. bond yields can reduce the appeal of emerging-market investments for foreign investors by offering comparatively safer returns on U.S. debt. Among local stocks, Colgate-Palmolive India (COLG.NS), opens new tab fell 3% after several brokerages raised margin concerns, following an analyst meeting.
While the meeting reinforced the company's growth agenda, category expansion and premiumisation opportunities, we see a trade-off between faster growth and margin protection, supporting our view of modest earnings growth," said Vismaya Agarwal, analyst at Citi Research. Bucking the trend, industrial machinery maker Indo-MIM (IDOM.NS), opens new tab jumped 10% after posting a 32% rise in the June-quarter profit.
Highway Infrastructure (HIGA.NS), opens new tab gained 4% after bagging a contract from the National Highways Authority of India, worth 801.7 million rupees.
