India Stocks: Indian shares slip as high oil prices fuel inflation worries

Bharat Petroleum

Today 05:26

Updates for morning trade
By Bharath Rajeswaran and Vivek Kumar M
Oct 22 (Reuters) - Indian shares declined on Thursday, extending losses from the previous two sessions, as an escalating Middle East war kept oil above $110 per barrel, stoking inflation concerns for the world's third-largest importer of crude.
The benchmark Nifty 50 .NSEI fell 0.73% to 22,647.90, and the Sensex .BSESN shed 0.49% to 73,343.98, as of 9:50 a.m. IST (0420 GMT).
Fifteen of the 16 major sectors logged losses. The broader small-caps .NIFSMCP100 and mid-caps .NIFMDCP100 dropped 1.2% each.
Brent crude futures LCOc1 were up 1.7% at $110.7 per barrel as more attacks in Saudi Arabia by Yemen's Houthis  prompted the United States to order some diplomats and family members to leave its missions in the kingdom.
Members of India's rate-setting panel indicated that further rate hikes may be needed to curb inflation, minutes of the committee's latest policy meeting released on Wednesday showed.
"Global weakness and persistent concerns over inflation and interest rates are keeping traders defensive," said Deepesh Sarawagi, technical research analyst at Choice Broking.
"Earnings-led moves will determine whether the Nifty finds support at lower levels or extends its recent decline."
Among stocks, heavyweights HDFC Bank HDBK.NS and Reliance Industries RELI.NS fell 1.6% and 1%, respectively. 
Oil-marketing companies, paint makers and tyre makers declined on higher crude prices.
Mahindra & Mahindra Financial Services MMFS.NS slid 6% with multiple brokerages flagging pressure from mounting funding costs and risks from insurance distribution reforms.
Nestle India NEST.NS dipped 3%, while Abbott India ABOT.NS and  Zydus Wellness ZYDS.NS dropped 1.4% and 2%, respectively, after the Food Safety and Standards Authority of India (FSSAI) issued notices saying promotional claims of some of their products breached rules.
An Abbott spokesperson said the company was neither involved in nor aware of the social media content cited in the regulator's notice until it received the FSSAI notice and did not endorse the claims in it and had shared this with the regulator. 
Nestle said the regulator's communication reiterated earlier concerns over product labels and that it had submitted a detailed response. Zydus Wellness did not respond to Reuters request for comment.

 (Reporting by Vivek Kumar M and Bharath Rajeswaran; Editing by Mrigank Dhaniwala and Jochelle Mendonca)
 ((VivekKumar.M@thomsonreuters.com;))