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India’s benchmark stock index fell as a surge in crude oil prices above $75 coincided with the expiry of this month’s derivative contract.
The S&P BSE Sensex slipped 0.8 percent to 38.730.86 in Mumbai, while the NSE Nifty 50 Index declined by 0.7 percent. Both measures swung from earlier gains of at least 0.5 percent.
India imports almost 80 percent of its oil requirement and a higher price may strain the nation’s fiscal and trade accounts, causing a drag on the economy and some company earnings. Brent crude prices climbed 1.3 percent to $75.55.
Eight out of the nine Nifty companies that have reported earnings so far have either beaten or matched estimates, according to data compiled by Bloomberg. Maruti Suzuki India Ltd. declined 1.6 percent despite posting net income that beat analyst estimates. The country’s largest passenger car maker said it will phase out all diesel cars from April 2020.
Investors will “remain selective” as earnings are coming in positive while crude oil prices are volatile, Deven Choksey, managing director of K.R. Choksey Shares & Securities Pvt., said by phone. “From derivative point, as much as 34 stocks will be going out from future and options segment after June expiry,” Rahul Mishra, assistant vice president at Mumbai-based Emkay Global Financial Services said in a note. “During the month, information technology and auto sectors have performed well with a monthly gain of 4%-5%. Earning season is going on and we have election result in the coming month which will keep market busy, investors are advised to pick stocks selectively.”
Sixteen of the the 19 sector indexes compiled by BSE Ltd. declined, led by a gauge of telecom firms. Reliance Industries contributed the most to the index decline, decreasing 1.1 percent. Tata Steel had the largest drop, falling 2.7 percentTata Consultancy provided the biggest boost to the index, advancing 0.5 percent. Bharti Airtel had the biggest gain, rising 1.2 percent
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