Indian shares kick off week with 1% fall as oil prices climb

Indian shares ended nearly 1 per cent lower on Monday after making sizeable gains the previous week, weighed down by losses in bank stocks, while a surge in oil prices stoked inflation fears.

The blue-chip NSE Nifty 50 index (.NSEI) closed 0.98 per cent lower at 17,117.60, while the benchmark S&P BSE Sensex (.BSESN) lost 0.99 per cent to end at 57,292.49. The market was closed on Friday for a holiday.

Both the indexes added about 4 per cent last week, helped by a pullback in oil prices, further easing of Covid-19 curbs in the country and hopes for progress in Russia-Ukraine peace talks.

However, oil prices on Monday rose above $110 a barrel amid tight supplies and as European Union nations consider joining the United States in a Russian oil embargo.

A jump in oil prices is a setback for India, the world’s third biggest consumer and importer of oil. The government has not hiked domestic prices so far.

Investor sentiment was also soured after global markets slipped as the Russia-Ukraine conflict dragged on with little progress in peace talks.

In Mumbai trading, the Nifty Bank Index (.NSEBANK) fell 1.13 per cent after two consecutive sessions of gains, while the Nifty Auto Index (.NIFTYAUTO) lost 1.21 per cent.

However, Maruti Suzuki (MRTI.NS) rose as much as 3.2 per cent, though it gave up most of the gains. The company’s majority-owner Suzuki Motor (7269.T) unveiled plans to invest $1.37 billion in its India factory to make electric vehicles and batteries.

Japanese Prime Minister Fumio Kishida also announced plans to invest $42 billion in India over five years.

The Nifty Pharma Index (.NIPHARM) gained as much as 1.50 per cent earlier in the day after 19 Indian generic drugmakers, including Sun Pharma (SUN.NS) and Cipla (CIPL.NS), received a license to make cheap versions of Pfizer Inc’s highly effective COVID-19 antiviral pill.