NSE’s Nifty declined 187.95 points or 1.12% to close at 16,605.95 after touching a low of 16,478.65. BSE’s Sensex dropped 778.38 points or 1.38% to end at 55,468.90 off the day’s low of 55,020.10. Analysts said investors and traders are looking if the Nifty can stay above the crucial 16,200 mark.
“The factor that is creating a lot of uncertainty for India and the world is the crude prices,” said Harish Krishnan, senior fund manager, Kotak Mahindra Asset Management. “The longer the situation continues the more it will impact the economy and act as a headwind for markets.”
Brent crude futures jumped 6.3% to $ 111.53 a barrel, the highest level since July 2014, ahead of the meeting of the Organization of Petroleum Exporting Countries (OPEC), a group of oil-producing nations, on Wednesday to decide on output policy in the wake of Russia’s attack on Ukraine. Russia is one of the largest oil exporters in the world.
US stock futures were up earlier on Wednesday, while Stoxx Europe 600 index advanced 0.3% after declining the previous day.
Fund managers said higher commodity prices could soon impact companies’ profit expectations in turn hurting equity returns.
“The pace of corporate earnings upgrades has begun to moderate, as corporate margins have come under pressure due to elevated commodity prices,” said Krishnan. “So, we might have a phase where investors are digesting the gains of the past 18 months from post-Covid lows, where markets had a dream run.”
