WPI shock and crude keep rally in check
The Nifty 50 closed at 22,622.70, down 99.25 points or 0.44%, while the Sensex fell 251.89 points to end at 72,781.89
Equities retreated from recent gains on Wednesday as wholesale inflation figures surpassed expectations and crude oil prices remained above $107 per barrel, causing investors to remain cautious prior to upcoming US inflation data. The Nifty 50 ended at 22,622.70, down 99.25 points or 0.44 percent, while the Sensex slipped 251.89 points to close at 72,781.89.
Bank Nifty settled at 55,316, down 165.05 points or 0.30 percent. Vinod Nair, Head of Research at Geojit Investments, noted that a stronger-than-anticipated domestic Wholesale Price Index (WPI) print pushed bond yields higher, reigniting concerns about a tighter monetary policy and impacting automotive, private banks, and metals sectors.
Wholesale price inflation in India surged to 11.39 percent year-on-year in September, up from 9.92 percent in August, driven by increased fuel, food, and manufactured product prices. Retail inflation also rose to 5.54 percent, suggesting price pressures are expanding beyond consumers to producer and input costs, posing risk of margin pressure for companies unable to pass on higher expenses.
Brent crude oil stayed above $107 per barrel, with additional Gulf attacks and Iran's potential escalation of tanker strikes near the Strait of Hormuz maintaining supply risk premiums. MCX crude rose more than 1 percent and crossed the ₹9,000 mark. The International Energy Agency (IEA) warned that a Russian diesel supply arrangement was unlikely to significantly impact overall price levels.
Nifty IT gained 1.1 percent, continuing the buying momentum after HCLTech's better-than-expected quarterly results. Nifty FMCG rose 1.21 percent and Oil & Gas added 1 percent. Nifty Pharma was the weakest sector, declining 1.30 percent due to regulatory uncertainty surrounding medicine pricing following the Supreme Court's questioning of trade-margin controls.
Auto, metals, and real estate sectors also closed lower, dampening any recovery in the benchmarks. The Indian rupee extended its gains as the dollar fell below the ₹95 mark, aided by the Reserve Bank of India's recent steps to curb speculative activity and divert oil-related dollar demand from the spot market. Spot gold fell to around $4,140 an ounce and silver declined over 1 percent to $58.4.
Analysts expect the near-term direction to depend on today's Consumer Price Index (CPI) and Federal Reserve Chair Jerome Powell's remarks at the IMF meetings in Bangkok on Friday. A hotter CPI print could bolster the "higher-for-longer" case, lifting the dollar and yields, which would pressure metals.
Written by urgent.news from Hindu BusinessLine's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
