Indian equities fell nearly 1.3 per cent after crude oil prices hit a near nine-month high due to increased tensions between the US and Iran. At 9.50 am, the benchmark Sensex was down 1.17 per cent or 485.38 points at 40979.23 points, while the Nifty fell 1.18 per cent or 144.45 points to 1082.20. In early deals on Monday, Brent crude advanced 2.7 per cent, hitting a nine-month high. Prices have gained nearly 7per cent so far this year.
India imports nearly 80 per cent of its crude oil consumption. Tensions in West Asia could threaten global oil supplies, push prices higher leading to a jump in India’s import bill. Additionally, India is yet to develop significant oil reserves although refiners have 15-30days of usable inventories. The geopolitical turmoil could put pressure on the development of domestic oil and gas fields and increase demand for the blending of biofuels, analysts said.
Shares of oil marketing companies fell, with Hindustan Petroleum Corp Ltd down 2.1 per cent, Bharat Petroleum Corp 1 per cent, Indian Oil Corp Ltd 1 per cent.
Read EquityPandit’s Nifty Outlook for the Week