Equity indicators dropped their initial gains for the second straight session on Thursday to close in the red as rising oil prices amid ongoing conflicts between Russia and Ukraine have eased risk appetite.
The price of crude oil has risen to 120 120 a barrel due to fears that Western countries will impose sanctions on Russia, which is about 10 percent of global oil production.
A weaker rupee and continued inflows of foreign funds have also weighed on sentiment, traders said.
The 30-share BSE Sensex started trading on a strong foot and jumped 527.72 points to reach a high of 55,996.62 in the morning trade. However, during the afternoon session it surrendered all its initial gains and ended 366.22 points or 0.66 percent lower at 55,102.68.
In a similar fashion, the broader NSE Nifty lost 107.90 points, or 0.65 per cent, to close at 16,498.05.
Ultratech Cement was the biggest drag among Sensex components, down 6.47 per cent, followed by Asian Paints, Dr Reddy’s Laboratories, Maruti Suzuki India, Hindustan Unilever Limited and ICICI Bank.
In contrast, Powergrid, Wipro, Tech Mahindra, HCL Tech, ITC, Tata Steel and Infosys were among the notable gainers, up 3.34 per cent.
According to Mitul Shah, head of research at Reliance Securities, “domestic equity markets have closed due to the deteriorating geopolitical situation due to the Russia-Ukraine crisis.
Binod Nair, head of research at Geojit Financial Services, said that with the release of strategic oil reserves in India and abroad, increased output from OPEC is expected to bring down crude oil prices in the future.
“In addition, the Indian market will keep an eye on the exit poll data of state elections while the global market will track the status of war development, BoE and Fed policy meetings from next week,” he noted.
Among sectors, BSE Auto fell the most at 2.24 per cent, followed by consumer goods and services, banking and capital goods, while utilities, power and oil and gas gained.
The BSE Midcap and Smallcap indices ended in mixed notes.
International oil benchmark Brent crude rose 2.75 percent to USD 116.03 a barrel.
Shares traded flat with gains in Hong Kong and Tokyo, where Shanghai was slightly lower.
U.S. stock exchanges closed in positive territory overnight session. European markets were mostly low in the afternoon session.
The rupee had lost 16 paise to close at 75.96 against the US dollar on Thursday.
Foreign institutional investors continued their sell-off in the Indian market as they offloaded shares worth Rs 4,338.94 crore on a net basis on Wednesday, according to exchange data.
Also read | Russia warns Ukraine: Moody’s downgrades Russia’s rating to ‘junk’ after Fitch sanctions
Latest business news