By Rama Venkat
BENGALURU (Reuters) – Indian shares extended their losses on Tuesday as a steep rise in oil prices fanned fears of runaway inflation and slowing economic growth.
With oil prices already hitting their highest since 2008, Moscow warned a Western ban on Russian oil imports could only more than double the price to $300 a barrel.
India is the world’s third-largest importer of crude oil, and rising prices push up the country’s trade and current account deficit, while hurting its currency and fuelling inflation.
HDFC Bank cut its economic growth forecast for India to 7.5-7.7% for financial year 2023 from 8.2% earlier, citing the uncertain geopolitical situation.
The blue-chip NSE Nifty 50 index was down 0.3% at 15,814.95, as of 0513 GMT, and the S&P BSE Sensex fell 0.2% to 52,737.33. If losses hold, the indexes would mark their fifth straight session of declines.
Both indexes briefly turned positive in early session on cues that the ruling Bharatiya Janata Party (BJP) might retain control of India’s most populous state, Uttar Pradesh, but the mood quickly turned sour as investors assessed the economic fallout from the Russia-Ukraine crisis.
“With exit polls giving a supportive indication to the BJP some sort of positive sentiment is spreading through the markets,” said Prashanth Tapse, vice president of research at Mehta Equities.
Tapse, however, said geopolitical tensions, a spike in crude and commodity prices, and worries over inflation were currently the dominant factors weighing on markets.
After the third attempt by Russia and Ukraine to ease the bloodshed at talks in Belarus, a Ukrainian negotiator said although small progress on agreeing logistics for the evacuation of civilians had been made, things remained largely unchanged.
The Nifty’s bank index, financial services index, private sector bank index and auto index were down over 1% each.
Among gainers, Nifty’s IT index and energy index rose nearly 2% and 0.3%, respectively.
(The story refiles to remove reference to “concerns” in paragraph 6.)
(Reporting by Rama Venkat in Bengaluru; Editing by Subhranshu Sahu and Anil D’Silva)
