Shares of the Sensex and Nifty moved slightly lower on Tuesday as gains in energy and metal stocks offset losses in technology and pharmaceuticals, with investors expecting global concerns about volatile oil prices in the market.
The NSE Nifty 50 Index was up 0.27 per cent at 17,740 and the S&P BSE Sensex was up 0.26 per cent at 59,462 at 12:53.
Energy stocks rose 1.93 percent, while Indian oil and gas analyst Oil and Natural Gas Corp. rose 8.2 percent – the highest level since July 2019.
Oil prices hit an all-time high of at least three years, extending gains from the previous session after the world’s leading manufacturers decided to set a limit for raw materials.
While higher oil prices are expected to increase inflationary pressures, they will benefit crude producers such as ONGC.
“Crude prices are going up and the margins for ONGC are improving due to the recent rise in domestic prices,” said Sumit Pokarna, VP Research, Kotak Securities. He said the sector was relatively inefficient and Tuesday’s rally was a catch.
The Nifty’s IT and Pharma indices each fell 0.86 percent, falling sharply among the major benchmarks.
Tech Mahindra, HCL and MindTree led IT losses by 1.06 per cent to 1.7 per cent before the September-quarter revenue season.
Separately, the Reuters poll of economists expects that inflation will rise or accelerate, which risks further delaying India’s economic recovery. Prices have risen due to rising fuel prices, but the Reserve Bank of India is not expected to raise interest rates until April-June 2022.
Asian stocks fell sharply on Wall Street on Tuesday morning as investors worried about inflation due to supply chain disruptions and rising energy prices.