Higher oil price erases India equity gain on economy, stoking earnings concern
Singapore
INDIAN equities reversed gains as oil continued rising for a third day, stoking concerns about an impact on the economy and profits at some companies. The third-biggest economy in Asia imports almost 80 per cent of its oil requirement.
The benchmark S&P BSE Sensex dropped 0.1 per cent to 38,609.32 just before 3pm in Mumbai, erasing an advance of as much as 0.5 per cent earlier in the day. The NSE Nifty 50 Index dropped less than 0.1 per cent to 11,590.15.
The India NSE Volatility Index rose a sixth day, staying at its highest level since February 2016. Rising oil - Brent for June settlement climbed 0.7 per cent to US$74.52 a barrel on the London-based ICE Futures Europe exchange - added to anxiety over the outcome of ongoing general elections.
Sushant Kumar, an equity fund manager at Raay Global Investments, said: "Oil inching toward US$75 a barrel is discomforting for investors in Indian assets as it fuels concerns of a strain on the nation's fiscal and trade accounts and a fall in its currency.
"This, combined with the ongoing elections and speculation about the outcome on May 23, are the major overhangs on the sentiment."
Twelve of the 19 sector indexes compiled by BSE Ltd retreated, led by a gauge of automobile and auto-component makers.
Maruti Suzuki India's 3.6 per cent decline was the steepest among Nifty members. The nation's biggest carmaker is expected to report a 6 per cent fall in its January-to-March earnings from a year earlier this week, according to data from Bloomberg.
Twenty-one of the 31 Sensex members and 28 of the 50 Nifty companies gained. BLOOMBERG
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