Indian stock markets fell sharply today after oil prices surged overnight to their highest since mid-2015, raising concerns about the inflation outlook. Oil prices rose 3.5 per cent on Monday, the highest since early July 2015, amid political upheaval in Saudi Arabia while the US rig count fell and markets continued to tighten. The rise in oil prices is seen as likely to prevent the Reserve Bank of India from cutting interest rates anytime soon, even as economic growth has slowed to a three-year low - removing a potential trigger for markets.
Dilip Bhat, Joint Managing Director at Prabhudas Lilladher Pvt Ltd, said the broader NSE Nifty would likely struggle to gain much without more positive news on corporate earnings or the economy.
"From here on, if it (NSE index) has to move beyond 10,500 level and show sustainable rally, it will require solid support from corporate earnings as well as economic recovery in third and fourth quarters," Bhat said.
The Sensex fell 360 points to end at 33,370 while Nifty settled at 10,350. Meanwhile, the rupee weakened to as much as 65.03 per dollar from its close of 64.68.
Banking, metal and energy stocks led the decline. SBI, Reliance Industries and ONGC fell between 2.5 per cent and 3.5 per cent.
IT stocks, however, climbed with the BSE IT index rising over 2 per cent. Infosys rose nearly 3 per cent while HCL Tech rose 3.75 per cent. (With Agency Inputs)