Sensex plunges 232 points on oil surge, Donald Trump visa talk

The market was nervous as investors looked forward to the release of consumer price inflation, to be released on Tuesday. Wholesale inflation is due on Wednesday. Asian stocks fell after prices soared following a landmark deal by Russia and other non-OPEC producers to join the OPEC in capping output in a bid to curb oversupply.

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Government data on Friday showed that the index for industrial production (IIP) slipped into the negative zone again with a contraction of 1.9 per cent in October, mainly due to a sharp decline in production of capital goods and poor show of the manufacturing sector.

Infosys fell as much as 1 per cent while Wipro shed 0.72 per cent, but TCS inched up 0.58 per cent. Shares of the fuel retailers such as HPCL, BPCL and IOC faced selling pressure and slumped by up to 4.25 per cent. Asian Paints emerged as the top loser among the Sensex constituents by diving 3.33 per cent followed by Axis Bank at 2.56 per cent. Other big losers included Bajaj Auto 2.52 per cent, Hero MotoCorp (2.29 per cent), Tata Motors (2.05 per cent), M&M (1.77 per cent) and Maruti Suzuki (1.54 per cent). Mid-cap and small-cap indices fell 1.11 per cent and 0.73 per cent, respectively, as investors trimmed their exposure to book profits.

Hong Kong’s Hang Seng tumbled 1.44 per cent as investors look ahead to an expected US interest rate hike later this week. China Shanghai Composite Index fell 2.47 per cent while Japan’s Nikkei surged 0.84 per cent, helped by weakness in the yen against the American currency. London’s FTSE rose 0.22 per cent, Paris gained 0.17 per cent while Frankfurt’s DAX shed 0.17 per cent.

Vinod Nair, Head of Research, Geojit BNP Paribas Financial, said, “the market plunged due to a spurt in oil prices and its impact on India’s inflation band which has elevated the pressure on equities. Adding to this, the prospects for a US Fed rate hike is almost factored by the market but the focus remains on US economic outlook and inflation, though investors are likely to view the event in conjunction with the policy stance of the newly elected US president.”

According to an analyst, industrial production data which showed that slowdown had set in even before demonetisation, depressed the opening sentiment, while rising possibility of delay in GST rollout clouded the outlook further. Money was seen chasing oil explorers as well as beneficiaries of cashless drive, but value buying almost everywhere else was subdued with a slew of central banks scheduled for rate decisions in the days shortly ahead. “

“Indian markets started the week on a tepid note and continued to trade under pressure throughout the day. Data over the weekend showing a decline in October industrial production coupled with the an imminent rate hike by the US Federal Reserve, later this week, weighed on the investor sentiment,” Karthikraj Lakshmanan, Senior Fund Manager, BNP Paribas Mutual Fund said.