Mumbai: India’s benchmark stock index plunged the most since September 2013, led by energy companies, as Asian equities extended a global selloff amid a slump in oil prices.
Reliance Industries Ltd, owner of the world’s largest refining complex, dropped to a 10-month low. Oil & Natural Gas Corp. was the worst performer on the S&P BSE Sensex. Hindalco Industries Ltd fell for a second day, sending a gauge of metal companies to its biggest drop since December 16.
The Sensex lost 3.1 percent to 26,987.46 at the close, the worst performer in Asia. The tumble pushed up the cost of using options to protect against losses to a six-month high as 49 of 50 stocks on the CNX Nifty Index slid. While the fall in oil to below $50 has cut energy costs for India, the rout signals a weak global economy, according to Ambit Investment Advisors Pvt. The nation imports about 80 percent of its crude needs.
“The concern on global growth has overtaken the positives that India’s economy gets from lower oil prices,” Vaibhav Sanghavi, managing director of Ambit Investment, said by phone from Mumbai. “The market is reacting to global worries.”
The India VIX Index soared 23 percent to 17.42, the most since August 2013, while the gauges for small and medium-sized companies compiled by the BSE Ltd. tumbled 3 percent each.
Reliance declined 4.5 percent to its lowest price since March 6 on concern the oil’s rout may lead to inventory losses at the refiner, depressing its third-quarter earnings. ONG plunged 5.7 percent, the most since June 26. The S&P BSE India Oil & Gas Index lost 4.2 percent, the most among the 13 sectoral indexes compiled by the BSE. “The large-cap energy companies would be significantly hit by inventory losses and depressing product prices,” Nipun Mehta, the founder of Blue Ocean Capital Pvt said.
Hindalco fell 2.2 percent, while Sesa Sterlite Ltd, a copper producer, tumbled 4.9 percent. Tata Motors Ltd, owner of Jaguar Land Rover, had the steepest drop in three months. The Sensex rallied 30 percent in 2014, the most among the world’s 20 biggest markets after China. Bloomberg
