Key indices skid on surging oil prices

Mumbai: Indian markets were caught in a global selloff on Wednesday as hardening crude oil prices and supply chain bottlenecks stoked fears of rising inflation crimping economic recovery around the world.

A depreciating rupee, which plunged 54 paise against the US dollar, added to the woes. Snapping its two-day winning run, the 30-share BSE Sensex slumped 555.15 points or 0.93 per cent to close at 59,189.73. Similarly, the broader NSE Nifty tumbled 176.30 points or 0.99 per cent to 17,646.

"Weak global markets, which resulted in profit booking in metals and IT stocks, led domestic indices to trade in red, trimming its early gains. Spike in crude prices is spooking the Indian market, while inflation is affecting US bond yields. RBI commenced its three-day MPC meeting in which the central bank is expected to keep rates unchanged, however, it is likely to announce measures to gradually pump out liquidity from the economy," said Vinod Nair, head (research) at Geojit Financial Services.

S Hariharan, head (sales trading), Emkay Global Financial Services, adds: "The global backdrop is worrisome with surging energy prices, slowing demand conditions and a global supply chain crunch across basic materials. Should global central banks respond to rising inflation expectations by paring bond purchases and tightening monetary conditions that could act as a trigger for sudden re-pricing of risk assets across the board."

Foreign institutional investors (FIIs) were net sellers in the capital market on Tuesday as they offloaded shares worth Rs1,915.08 crore, as per exchange data.