Indian stocks slip at open as crude rally and price pressures weigh

what happened

According to Reuters, Indian equity benchmarks opened lower on Friday after recent gains. The Nifty 50 fell 0.35% to 25,209.85 and the Sensex slipped 0.09% to 81,833.78 at 9:15 a.m. IST. All 16 major sectors were in the red, while small-caps and mid-caps dropped 0.2% and 0.3%.

Retail inflation in India rose to 6.09% in October, above the Reserve Bank of India's 6% upper tolerance limit, and higher food prices fueled bets on further monetary tightening. Brent traded near $95.5 a barrel, up from $92 at Thursday's Indian market close, as attacks on Saudi energy facilities and shipping risks in the Strait of Hormuz weighed on supply.

Foreign investors remained net buyers, purchasing a net 78.31 billion ($832.71 million) of Indian equities on Thursday, their ninth straight session of buying. November inflows have reached $8 billion, the largest monthly total since December 2020.

why it matters

Two forces are pulling in opposite directions. Costlier crude adds to India's import bill and inflation, raising the risk of tighter policy, while steady foreign inflows continue to cushion the benchmarks.

market impact

Indian stocks: costlier oil and inflation pressure the indexes, while capital inflows partly offset it

• ▲Brent pressure up — attacks on Saudi facilities and shipping risks in Hormuz constrain supply
• ▼Nifty 50 pressure down — rising inflation and expectations of tighter monetary policy weigh on sentiment

tags

instruments