Sectoral Snapshot Today: IT, Energy, FMCG Stocks Lead Losses As Crude Oil Tops $110

Mumbai, October 22: Sectoral indices across the Indian equity market ended largely lower on Thursday as crude oil prices climbed above $110 per barrel amid escalating tensions in the Middle East, intensifying concerns over inflation and corporate profitability. Information technology (IT), energy and fast-moving consumer goods (FMCG) stocks were among the worst-performing sectors, while selling in heavyweight shares and broader-market stocks added to the pressure on benchmark indices.

Thirteen of the 16 major sectoral indices ended in the red. The weakness came as the Nifty 50 fell 123.70 points, or 0.54%, to close at 22,687.65, while the Sensex declined 460.30 points, or 0.62%, to settle at 73,249.39.

IT, Energy and FMCG Stocks Bear the Brunt

IT, energy and FMCG were the worst-performing sectors by percentage terms among the major sectoral indices. Higher crude prices have raised concerns over input costs and inflation, while uncertainty surrounding the global economic outlook has added to investor caution.

The rise in oil prices is particularly significant for India, which imports most of its crude requirements. A sustained increase in energy costs could put pressure on corporate margins and consumer spending, while complicating the inflation outlook and the Reserve Bank of India’s policy decisions.

Nestle India, Abbott India and Zydus Wellness declined after receiving notices from India’s food safety regulator over product-related claims. Nestle India fell 2.8%, Abbott India dropped 1.3% and Zydus Wellness declined 3.4%.

Among energy stocks, refining giant Reliance fell 2%. Among fuel retailers, HPCL fell 1.9% and BPCL declined 0.4% while IOC rose 1%. Among upstream players, ONGC declined 0.3% while OIL rose 0.6%.

Oil-Sensitive Stocks and Heavyweight Shares Under Pressure

Oil-marketing companies, paint manufacturers and tyre makers faced pressure as elevated crude prices threatened to raise costs. Airline IndiGo fell 0.9% while tyre firm MRF declined 1.7%. Indigo Paints, however, rose 1.2% bucking the trend.

Companies that rely heavily on petroleum-based inputs could face margin challenges if they are unable to pass on higher costs to consumers.

In the world of finance, Mahindra & Mahindra Financial Services dropped 3.3% after brokerages flagged concerns over rising funding costs and risks linked to changes in insurance distribution rules.

eMudhra Plunges; Broader Markets Weaken

Cybersecurity firm eMudhra plunged 20%, taking its losses over two sessions to 36%, after the Indian Computer Emergency Response Team issued an advisory stating that some of the company’s intermediate digital certificates had been compromised.

The weakness extended to midcap and smallcap stocks, with the Nifty Midcap index falling around 0.9% and the Nifty Smallcap index declining about 1.1%. The broader-market sell-off suggested that investor caution extended beyond large-cap stocks.

Outlook: Crude Oil, Inflation in Focus

Market sentiment remained vulnerable to further developments in the Middle East, particularly any disruption to crude supplies. Analysts also cautioned that some of the recent decline could reflect profit-booking after the market’s strong gains in the previous week, rather than a deterioration in earnings expectations.

Investors will continue to monitor oil prices, inflation signals, foreign fund flows and company earnings for clues on the market’s near-term direction.

Source:

• NSE