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Hike in Oil Price, Inflationary Fears Subdue Indian Equity Indices

The index toppers were Yes Bank, Vedanta, Tata Motors, NTPC and Mahindra & Mahindra.

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High crude oil prices and fears of a rise in core inflation subdued the key Indian equity indices on Friday.

According to market observes, crude oil at $67 per barrel and caution over a likely rise in core inflation pointed out in the Reserve Bank of India (RBI)’s latest minutes of the monetary policy committee meet kept investors away.

The S&P BSE Sensex closed 26.87 points or 0.07 per cent lower at 35,871.48, while the broader NSE Nifty50 ended flat at 10,791.65.

crude oil, equity, inflationary
The S&P BSE Sensex closed 26.87 points or 0.07 per cent lower at 35,871.48, while the broader NSE Nifty50 ended flat at 10,791.65. VOA

“Market turned range-bound after the release of RBI minutes which hints at elevated core inflation and threat of global growth slowdown,” said Vinod Nair, Head of Research, Geojit Financial Services.

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“Inflow of domestic funds to market remains positive, while tepid reaction from FIIs and lack of major triggers are impacting investors’ sentiments.”

The index toppers were Yes Bank, Vedanta, Tata Motors, NTPC and Mahindra & Mahindra, and the laggards were Kotak Mahindra Bank, HDFC Bank, Reliance Industries, IndusInd Bank and Bajaj Finance. (IANS)

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Lower Production of Crude Oil, Fertilisers Decelerates India’s April Core Sector Growth

The core sector index carries 40.27 per cent weightage of the items included in the index of industrial production

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Crude Oil, Fertilisers, India's, April
The index of eight core industries had risen 4.7 per cent in April 2018. Pixabay

Lower production of crude oil and fertilisers decelerated the output pace of India’s eight major industries in April to 2.6 per cent, official data showed on Friday.

According to the Ministry of Commerce and Industry data, the index of eight core industries had risen 4.7 per cent in April 2018. On a sequential basis, the core sector grew by 4.9 in March this year.

The core sector index carries 40.27 per cent weightage of the items included in the index of industrial production (IIP).

“The combined Index of Eight Core Industries stood at 127.5 in April, 2019, which was 2.6 per cent higher as compared to the index of April, 2018. Its cumulative growth during April to March, 2018-19 was 4.3 per cent,” the Ministry said in a statement.

Crude Oil, Fertilisers, India's, April
Lower production of crude oil and fertilisers decelerated the output pace of India’s eight major industries. Pixabay

On sector-specific basis, the output of refinery products, which has the highest weightage of 28.03, grew 4.3 per cent in April 2019 compared to the corresponding month of the last fiscal.

Electricity generation, which has the second highest weightage of 19.85, increased by 5.8 per cent.

Steel production, the third most important component with a weightage of 17.91, was up by 1.5 per cent during the month under review, whereas coal mining, with a 10.33 weightage, was higher by 2.8 per cent.

On the other hand, extraction of crude oil, which has a weightage of 8.98, declined by (-) 6.9 per cent during the month under consideration.

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The sub-index for natural gas output, with a weightage of 6.87, inched-lower by (-) 0.8 per cent.

Cement production, which has a weightage of 5.37, rose by 0.8 per cent in the month under review.

Fertiliser manufacturing, which has the least weightage of only 2.62, declined by (-) 4.4 per cent in April.

Crude Oil, Fertilisers, India's, April
On sector-specific basis, the output of refinery products, which has the highest weightage of 28.03. Pixabay

“Except electricity and to some extent refinery products and coal, all other segments of core sector have performed poorly in April 2019,” said Sunil Kumar Sinha, Director — Public Finance and Principal Economist India Ratings & Research (Fitch Group).

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“The government capex spending is the key driver of growth for core infrastructure industries because private corporate investment is down and out. With new union government in place India Ratings (Ind-Ra) believes much of the future performance of these core infrastructure industries would depend on what is there in store for them in the full budget which is expected to be presented in the month of July 2019.” (IANS)