Indian shares slip on elevated crude, Ambani's Jio IPO sees strong demand
Indian shares fell on Wednesday as higher crude oil prices kept investors wary, while the IPO of billionaire Mukesh Ambani’s Jio Platforms was fully subscribed within hours of launch. The benchmark Nifty 50 fell 0.34% to 22,811.35, and the Sensex lost 0.19% to 73,709.69. They had risen about 1% in early trading. Jio Platforms’ $3.2 billion IPO was fully subscribed within two hours of public…
Indian stocks declined on Wednesday due to rising crude oil prices, which caused concern among investors. The benchmark Nifty 50 fell by 0.34% to 22,811.35, while the Sensex dropped by 0.19% to 73,709.69. Both indices had gained about 1% at the beginning of the trading day. Jio Platforms' IPO, valued at $3.2 billion, was fully subscribed within just two hours of its public bidding opening.
This sale, the first from Mukesh Ambani's Reliance in two decades, attracted significant investor interest due to the company's strong reputation and status as a well-known brand in India. Kranthi Bathini, an equity strategy director at WealthMills Securities, noted that the IPO's overwhelming response was a result of Reliance's solid background and the widespread recognition of Jio.
Brent crude futures increased by 1.5%, reaching over $110 per barrel, as Middle East supply concerns and reduced US inventories contributed to the price rise. With elevated crude prices and high US bond yields, the market is likely to face further pressure in the short term, according to VK Vijayakumar, Geojit Financial Services' chief investment strategist.
As higher oil prices are a burden for India, which largely imports its crude, they strain the nation's fiscal deficit and affect corporate profits. Apart from the information technology sector, all major sectors experienced declines. Small and mid-cap shares dropped by 2.4% and 1.6%, respectively. Major sector stocks, including financials, lost 1.2%.
Bajaj Finance, India's largest non-bank lender, suffered a 3.3% decline after expressing early concerns about stress in loans secured by gold. Stocks in the auto and metals industries also experienced losses, with auto shares falling by 1.5% and metals stocks dropping 1.7%. The IT index, however, rose by 2.9%. Jefferies suggested that steady earnings and worsening global sentiment on AI capital expenditures could lead to a re-rating for some IT stocks.
L&T Technology Services recorded a 10.5% increase following a rise in revenue and profit for the September quarter.
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