Reversing early gains, Indian stocks fell sharply today, as a plan by major oil producers to cut supply to boost the fuel’s price weighed on sentiment. The Sensex fell 345.56 points to end at 34,812.99 while Nifty declined 103 points to 10,482.20.
Twenty-five of the 30 Sensex stocks fell today, led by a nearly 5% decline in Tata Motors after its Jaguar Land Rover unit reported a drop in October sales from a year earlier.
Investors assessed how a plan by producers to cut supply may affect the India’s economy and corporate profits. Several factors, including the uncertainty around liquidity of non-banking financial companies, upcoming elections and ongoing corporate earnings, are bound to keep the market volatile, said Siddharth Sedani, head of equity advisory at brokerage firm Anand Rathi.
Investors also remained cautious ahead of October’s inflation data. A Reuters poll found retail inflation likely slowed to its slowest pace in 12 months in October after food and fuel costs fell, keeping the official consumer prices gauge below the central bank’s medium-term target for a third consecutive month.
Global oil prices rose by more than 1% today, set for its largest one-day increase in a month after Saudi Arabia said OPEC and its partners believed demand was softening enough to warrant an output cut of 1 million barrels per day.
Saudi Arabia, the world’s largest oil exporter, said on Sunday it would cut its shipments by half a million barrels per day in December due to seasonal lower demand.
The Indian rupee weakened 0.68% to 72.97 against the dollar, pushing some IT shares higher. Shares of software services exporters Infosys Ltd and those of larger rival Tata Consultancy Services ended higher.
Jeweller Titan Company ended over 5% higher after the company reported strong quarterly revenue growth on Friday.