Stock market on Tuesday witnessed selling pressure as investors fretted over rising global oil prices ahead of inflation numbers.
The Sensex closed at 33,227.99, down 227.80 points, or 0.68 per cent. The index had rallied 858.61 points in the previous three sessions. The broader Nifty settled below the key 10,300-level, down 82.10 points, or 0.80 per cent, at 10,240.15.
Global Brent crude oil prices jumped above the $ 65 a barrel for the first time since 2015, which could spoil any chance of rate reduction by the Reserve Bank, traders said. “With few cues to push ahead, the caution ahead of key macroeconomic release weighed on prices. Asian peers also offered little support with dollar’s firmness ahead of key major central banks’ meetings. With pre-Budget talks under way, markets are also weighing the likelihood of the government levying taxes on long-term capital gains,” said Anand James, chief market strategist, Geojit Financial Services.
Anticipating weak inflation numbers, slated for release after market hours, investors pressed for sales. Other Asian shares also turned weak. Retail inflation hit a 15-month high of 4.88 per cent in November due to costlier fuel, vegetables and eggs, as per data released by the Central Statistics Office (CSO). “Investors are not going to like the inflation numbers,” said an analyst.
The US Federal Reserve, which is scheduled to issue an interest rate policy update on Wednesday, kicks off its meeting. It is expected to lift rates by 0.25 per cent.
Realty, power and banking came under selling pressure. Losses in oil marketers such as HPCL, BPCL and IOC stocks too weighed. Coal India tanked the most, losing 2.45 per cent, followed by Cipla which was down 2.17 per cent. Other major losers were Hero MotoCorp, TCS, Tata Steel, ITC and L&T.
Dr Reddy’s advanced the most by 2.83 per cent after the company said it has received Establishment Inspection Report (EIR) from the USFDA for its Hyderabad facility. On the sectoral front, telecom fell by the widest margin of 2.12 per cent. The BSE mid-cap and small-cap indices retreated by up to 1.01 per cent.
Karthikraj Lakshmanan, Senior Fund Manager, BNP Paribas Mutual Fund, said, “weakness in Asian stocks and subdued trading on European bourses weighed on sentiment in the domestic bourses. Investors largely remained skittish in anticipation of some macro and micro developments in various pockets of the world. While in the west, investors look ahead to Fed and ECB meetings, closer home worries of bad loans impacting the earnings of banks hit the investor sentiment.”