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Indices rise as crude tumbles, financials move higher

By Reuters

  • 06 Jul 2022
Credit: Reuters

Markets rose on Wednesday, as gains in top non-banking financial company Bajaj Finance after a strong quarterly performance boosted financial stocks, while easing inflation worries on a slump in crude oil prices also supported sentiment.

Nifty rose 0.42% to around 15,880, while Sensex was up 0.52% at around 53,410 in early trade.

Crude oil prices tumbled 9% on Tuesday, hit by worries of demand destruction, which could bring down inflation for India, the world's third-largest importer.

"Headline worries still remain the same with regards to a possible recession and high inflation. The markets are positive only on the back of cooling of crude prices," said Prashanth Tapse, vice-president (research), Mehta Equities.

Market is expecting crude prices to fall below $100 per barrel in case of a recession in global economy, which will substantially bring down domestic inflation, he said.

Interest rates and inflation worries have weighed on Nifty and Sensex, with the indices falling over 8% so far this year.

Nifty Finance rose 0.8%, while Bajaj Finance gained 3.2% after reporting strong June- quarter numbers.

Bajaj Finance was the top mover and boost in the blue-chip Nifty.

Shares of domestic explorers Oil & Natural Gas Corp, Oil India and Gail India fell between 2.6% and 6.3%.

Oil explorers have also come under pressure after the government imposed a windfall tax on oil producers.

Investors are also keeping an eye on the Indian rupee, which hit multiple record lows recently on concerns over the country's widening current account deficit.

Elsewhere, Asian stocks slipped and the dollar stood by a two-decade high against the euro on deepening fears that the continent is leading the world into recession.

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