Indian Shares Hit Near Six-Month Low as US-Iran Deadlock Lifts Oil Prices

Indian equities fell to near six-month lows on Monday, September 28, as another rise in crude oil prices added to pressure on a market already coming off seven consecutive weeks of losses. 

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The Nifty 50 was down 1.16% at 22,871.40 at 10 am, while the BSE Sensex fell 1.18% to 73,022.60. Selling was spread across the market, with all 16 major sectoral indices trading lower. 

The weakness came as Brent crude futures climbed 2.3% to around $106.7 a barrel after the latest developments in the US-Iran conflict raised fresh concerns over oil supplies. 

US-Iran deadlock pushes crude higher 

Crude prices rose on Monday following US President Donald Trump’s rejection of Iran’s offer to re-open the Strait of Hormuz and cease hostilities. 

On the other hand, Iran continued over the weekend saying that only diplomacy could solve its differences with the US and Israel. 

The continuing deadlock brought supply risks surrounding the Strait of Hormuz back into focus. For India, the world’s third-largest crude oil importer, an extended period of elevated oil prices carries implications for inflation, the country’s import bill and costs faced by companies. 

Banks and financial stocks lead market decline 

The financial stocks have been one of the significant laggards in early trade on Monday. Nifty Financial Services Index and Nifty Bank Index fell 1.6% each. 

HDFC Bank witnessed a decline of 1.8%, ICICI Bank was down 1.7%. Reliance Industries also remained under pressure and was down 1.4%. 

Weakness was not confined to large-cap stocks. The broader small-cap and mid-cap indices slipped around 1.1% each. 

The latest decline extends a difficult stretch for domestic equities. The Nifty 50 and Sensex have now fallen for seven consecutive weeks, losing nearly 6% over the period. The run ranks among the longest weekly losing streaks recorded by the benchmarks. 

Omaxe falls after regulatory action 

Among individual stocks, Omaxe declined 3.3% after India’s markets regulator barred the company from accessing the securities market and dealing in securities for three months. 

The action was linked to non-compliance with minimum public shareholding requirements. 

A handful of stocks moved against the broader market trend. Allied Blenders & Distillers gained 2%, while Borosil rose 3%. 

The wider market, however, remained firmly under pressure in morning trade as investors assessed the renewed rise in crude oil prices and the continuing uncertainty surrounding the US-Iran conflict.