Sensex, Nifty plunge as oil prices surge after drone attack hits
Benchmark Brent crude futures rose by as much as 19.5% to $71.95 per barrel, the biggest intra-day jump since Jan. 14, 1991. The front-month contract was at $66.20 per barrel, up $5.98, or 9.9%, from their previous close, at by 0343 GMT.
Both Sensex and Niftyy plunged on Monday as oil prices surged after attacks on key oil producer Saudi Arabia`s crude facilities over the weekend. India is the world's third-biggest importer of oil, The broader NSE Nifty fell as much as 0.79% to 10,988.85, while the benchmark BSE Sensex slipped 0.73% to 37,112.79. The rupee also tumbled over 1% to 71.69 against the dollar.
The attacks knocked out more than 5% of global oil supply, pushing prices to four-month highs and boosting safe-haven bets. A source close to the matter told Reuters the return to full oil capacity could take "weeks, not days."
"If crude stays high at $65-$70 per barrel, it could have repercussions (for the Indian economy)," said Neeraj Dewan, director, Quantum Securities.
"It could impact inflation, rate cuts may not happen. But indications are that the supply should get restored soon."
Benchmark Brent crude futures rose by as much as 19.5% to $71.95 per barrel, the biggest intra-day jump since Jan. 14, 1991. The front-month contract was at $66.20 per barrel, up $5.98, or 9.9%, from their previous close, at by 0343 GMT.
Indian oil marketing companies Indian Oil Corporation Ltd, Hindustan Petroleum Corp Ltd and Bharat Petroleum Corp Ltd slid between 5% and 7%.
Heavyweight oil-to-retail conglomerate Reliance Industries Ltd was among the top drags, falling as much as 3.22% to its lowest in nearly two weeks.
The Nifty Energy index slumped 2.02%.
Aviation stocks also were also hit by the jump in oil prices, with Indigo-owner Interglobe Aviation Ltd falling 3.8% and Spicejet Ltd sliding 7.98%.
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India`s finance minister had announced measures on Saturday to revive the housing sector and boost exports as the government tries to kick-start an economy hit by a lending crisis and a slowdown in demand.
The moves, however, failed to cheer investors, with the Nifty Realty index falling as much as 1.10%.
Meanwhile, Bharat Electronics Ltd jumped 4.37% after scoring a 53.57 billion rupee ($749.49 million) contract to procure missile systems for the Indian Air Force.
($1 = 71.4750 Indian rupees)
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