Indian shares swing to gains after volatile closing auction; Mideast cloud lingers
Indian shares edged higher on Thursday after a volatile closing auction session (CAS), even as an escalating Middle East conflict and a jump in Brent crude prices above $102 per barrel kept investors jittery. Indicative closing levels for benchmarks Nifty 50 and BSE Sensex briefly jumped over 1% higher during the CAS, compared with a slight loss after the end of normal trading at 3:15 p.m. IST.…
Indian stocks climbed on Thursday following a turbulent closing auction session, despite growing Middle East tensions and a surge in Brent oil prices above $102 per barrel. The Nifty 50 and BSE Sensex briefly surged over 1% higher during the auction, contrasting with a modest decline after regular trading hours. The Nifty 50 closed at 23,477.8, a 0.2% gain, while the BSE Sensex added 0.19%, reaching 74,902.59.
The volatility was anticipated, especially for the Sensex, due to the expiry of its weekly derivatives contracts. Introduced in early August, the Closing Auction Session has intensified last-minute fluctuations in Indian equities, given the limited liquidity in this period. The primary indices remained relatively stable throughout the regular trading day.
Brent crude oil's ascent to $102/barrel heightened concerns about inflation and growth in India, which relies heavily on imported oil. Iran announced it had attacked ten vessels near the Strait of Hormuz after the U.S. sank five Iranian oil tankers, marking the most significant shipping assaults in the ongoing six-month conflict.
The Nifty and Sensex have experienced declines of 2.5% and 2.7%, respectively, thus far in September, with six out of the eight sessions closing lower this month. Eight of the 16 major sectors recorded declines on Thursday, with small- and mid-cap shares shedding 0.1% and 0.4%, respectively. Analyst V K Vijayakumar of Geojit Investment noted that technically, the market remains susceptible to further correction, and fundamental macro trends are deteriorating.
Higher oil prices have left investors apprehensive ahead of U.S. inflation data, which could provide insights into the Federal Reserve's forthcoming policy decision, expected next week. The U.S. producer price index data is anticipated later in the day, while the consumer price inflation report is slated for Friday. Oil and Natural Gas Corporation (ONGC) rose 1.4%, bolstered by higher oil prices that enhance revenues and profit margins for upstream oil producers.
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