Key facts
- Indian equities experienced losses as Brent crude oil prices exceeded $114 per barrel.
- The Sensex and Nifty 50 indices both opened lower.
- IT stocks were particularly affected, dropping by 1.1%.
- Concerns over Middle East tensions and potential supply disruptions fueled the oil price surge.
- India's imports of Middle Eastern crude rose to 2.8 million barrels per day in September.
Indian equities experienced a downturn at the start of the week, with both the Sensex and Nifty 50 indices registering losses, largely attributed to the surge in oil prices. Brent crude traded above $114 per barrel, fueling concerns over supply disruptions stemming from escalating Middle East tensions.
Investor sentiment in India, the world's third-largest crude importer, turned cautious. IT stocks were notably impacted, shedding 1.1%. G Chokkalingam, founder and head of research at Equinomic Research, noted that domestic equities are likely to remain volatile with a short-term downward bias. He warned that unresolved Middle East conflicts could reignite global inflation, restrain economic growth, and negatively affect stock markets worldwide.
Despite ongoing geopolitical risks, India's imports of Middle Eastern crude increased to 2.8 million barrels per day in September, raising the region's share of total imports to 54% from 32% in August. This rise was facilitated by Indian refiners acquiring spot cargoes, with Gulf producers managing to increase volumes through ship-to-ship transfers in the Gulf of Oman. Russia remained India's top crude supplier, though its imports decreased by 14% from August to 1.8 million barrels per day, reducing its share of India's total oil imports to 33.5% from 46.6%.