indian economy, oil price fall

As oil prices fall, financials and automobiles lead the way higher in Indian stocks.

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Lower oil prices and the likelihood of Russia-Ukraine peace negotiations boosted India’s blue-chip stock indexes on Tuesday, mirroring an overnight tech-led surge on Wall Street.

As of 0435 GMT, the NSE Nifty 50 index (NIFTY) was up 0.46 percent at 17,300.95, while the S&P BSE Sensex (.BSESN) was up 0.44 percent at 57,848.17.

Brent oil (BRN1!) futures fell as low as $109.97 per barrel on Tuesday, with Ukraine and Russia ready to meet in Istanbul for their first peace talks in more than two weeks, with coronavirus curbs in Shanghai raising concerns about a reduction in Chinese fuel demand.

After Russia’s invasion of Ukraine drove up oil prices sharply, equity markets in India, the world’s third-largest importer and consumer of oil, had fallen over 15% from the year’s high. The Nifty and Sensex have now recovered the majority of their losses for 2022.

“With a spike in Bank Nifty, the 17,000-17,500 Nifty range has a decent chance of being broken on the upside. The fourth-quarter financial reports may give ammunition for this breakout “Geojit Financial Services’ chief investment strategist, V K Vijayakumar, stated in a note.

While global market stability, lower crude prices, and the possibility of a cease-fire in Ukraine could pave the way for the breakout, Vijayakumar said that stubborn U.S. inflation and an increasingly hawkish Federal Reserve were major headwinds for equity markets globally, and that high volatility should be expected.

The Nifty Financial Services index (CNXFINANCE) gained as high as 0.95 percent, led by a 2.2 percent increase in HDFC Ltd, a heavyweight mortgage lender (HDFC).

Maruti Suzuki (MARUTI) gained 1.2 percent, and Tata Motors (TATAMOTORS) gained 1.5 percent, lifting the Nifty Auto index (CNXAUTO) by 1 percent.

Ruchi Soya Industries (RUCHI) shares jumped as much as 20% after India’s market regulator allowed investors the option to withdraw their applications for the company’s follow-on public offering after messages advertising a discount to the offering were distributed.

Over the previous three sessions, the stock had dropped more than 9% in the bidding period.

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