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regular-article-logo Monday, 04 March 2024

Crude oil prices hit three-month low, but no stock rally as investors hold positions

Broking circles said the markets were more swayed by what US Fed chair Jerome Powell had to say at a conference in Washington DC. Last week, Powell sounded dovish while announcing a status quo in rates, which suggested the US central bank is almost finished with its rate hikes

Our Special Correspondent Mumbai Published 09.11.23, 10:52 AM
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Crude oil prices plunged to their three-month lows on Wednesday, but there was no stock rally as investors preferred to consolidate their positions amid lacklustre corporate earnings and persistent foreign portfolio outflows.

The 30-share BSE Sensex notched up a gain of only 33.21 points or 0.05 per cent to settle at 64975.61 with energy stocks witnessing some buying from the fall in crude prices.

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Broking circles said the markets were more swayed by what US Fed chair Jerome Powell had to say at a conference in Washington DC. Last week, Powell sounded dovish while announcing a status quo in rates, which suggested the US central bank is almost finished with its rate hikes.

Benchmark Brent crude fell below the $81 mark intra-day to $80.53 per barrel after dropping to a low of $80.23. On Tuesday, it had closed at $81.61.

The oil markets reacted to reports of a substantial rise in US crude inventories and mixed Chinese economic data that pointed to muted demand for oil.

Data released by The American Petroleum Institute (API) on Tuesday showed stocks rising nearly 12 million barrels during the week ended November 3.

On the other hand, Chinese exports fell for the sixth consecutive month by 6.4 per cent, much more than market expectations.

However, lower crude did not lead to a runaway rally in stocks.

The 30-share BSE Sensex opened at 65101.95 and hit a high of 65124 during the day after which it closed at 64975.61.

On the NSE, the broader Nifty rose 36.80 points or 0.19 per cent to close at 19443.50

Among the Sensex firms, Asian Paints, Titan, Larsen & Toubro, JSW Steel, ITC, Hindustan Unilever, Maruti and Reliance Industries were the major gainers, rising up to 1.96 per cent. The losers were led by ICICI Bank which fell up to 1.44 per cent.

Market circles said investors were still coming to terms with India Inc’s scorecard which in many cases did not meet their expectations.

Even as valuation concerns remain in some pockets, FPIs continued to be in the sell mode. So far in this month, they have sold stocks worth nearly Rs 3,500 crore following net sales of Rs 24,548 crore in the preceding month.

“Domestic equities remained range-bound amid mixed global cues. After witnessing recovery in the last week, the market is now in a consolidation mode and we expect a slow and steady upmove till the festivity,” Siddhartha Khemka, head — retail research, Motilal Oswal Financial Services, said.

In the broader market on Friday, the BSE midcap gauge rose 0.78 per cent, while the smallcap index gained 0.60 per cent.

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