A sharp rise in global crude oil prices has started to weigh yet again on India’s stock market, which is trading near its all-time high. Brent crude, the global benchmark for oil that had crashed to around $50 a barrel in 2018 is back to $75.

Key stock indices Sensex and Nifty were roiled on Monday on fears that US may withdraw its waiver that it had given to some countries including India to import oil from Iran. The share price of Reliance Industries (RIL), that runs country’s largest oil refinery and has the highest weight in both key indices, fell by 2.76 per cent to close at ₹1,344.

The news also put pressure on rupee that fell to 69.67. Brent crude rose 2.24 per cent to $74 per barrel while the US crude index WTI crude rose 2.2 per cent to $65.5 per barrel.

Other heavy weight stocks ICICI Bank and HDFC Bank fell 2.54 per cent and 2.44 per cent respectively.

Brent crude price has gained more than 35 per cent in 2019 so far. Since India imports over 80 per cent of its oil a high bill for oil could hit the country’s current account deficit, a worry which is often at the top for the markets. Estimates of $80 per barrel of crude have yet again started doing the rounds. Also, the fact that the monthly equity derivative expiry falls this Thursday was resulting into some volatility as traders try to adjust their positions for the next month, experts said.

The NSE said it removed 34 stocks from its futures and options segment as per its criteria. It would further put pressure on markets as traders try to unwind their positions in the counters that will be excluded from the F&O.

Fear gauge hits 24

No new contracts in the 34 stocks, a complete list of which is available on NSE website, will be allowed from July month derivative series.

“As our markets halted its winning streak during the last week, the fear index rose to its three-year high amidst the general elections and rising crude oil prices. The India VIX climbed to above 24 levels today which indicates increasing concerns amongst market participants and is a sign of rising volatility in the market. The Nifty and Bank Nifty index have witnessed profit-booking in the last couple of sessions and a rise in the volatility index could lead to some roller-coaster rides in the short-term,” said Ruchi Jain, of Angel Broking.

However, foreign institutional investors continue to buy Indian stocks. According to BSE, they net bought ₹73.08 crore worth shares on Monday even as domestic institutions sold ₹68.16 crore worth shares.

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