Oil Above $104 Drags Sensex Down 1,000 Points as HPCL, BPCL and IndiGo Lead the Losers

The single biggest number for Indian equities on Thursday was not on Dalal Street. It was on the Intercontinental Exchange, where Brent crude climbed as much as 3.9% to a day's high of $104.09 a barrel as fears over supply from West Asia intensified. For a country that imports most of its oil, that move did the damage.

By 2 pm the BSE Sensex was down 1,063 points, or 1.46%, at 71,575.16, and the Nifty 50 had shed 359 points, or 1.59%, to 22,243.60. That left the Nifty only about 60 points above its 52-week low of 22,182.55. The session had started on a mildly weak note, with the Nifty opening at 22,599, which turned out to be its high. Losses deepened through the morning and accelerated after midday as crude kept rising.

Oil marketers take the first hit

The clearest casualties were companies whose costs rise directly with crude. Around 1:15 pm, Hindustan Petroleum was down 4.04%, Bharat Petroleum 3.72% and Indian Oil 2.85%. When crude rises faster than pump prices can be adjusted, refining and marketing margins shrink, and investors start to worry about how much cash these state-run companies will have left for dividends.

The selling spread to other crude-sensitive names. InterGlobe Aviation, which runs IndiGo, fell because jet fuel is an airline's largest cost, and paint makers such as Asian Paints slipped because many of their raw materials are oil derivatives. Oil-sensitive stocks as a group fell by up to 5%. The Nifty Energy index was down 2.77% and the Nifty Oil & Gas index 2.62% in early afternoon trade.

Why oil is climbing

Traders are pricing in the risk of a wider conflict. Renewed attacks on shipping in the Gulf and the Strait of Hormuz have added to supply worries, and a hurricane has raised concerns about US offshore output. Reports this week that the US military has been told to prepare for possible renewed operations against Iran have kept the risk premium high.

A tighter RBI adds to the pressure

The oil shock landed a day after the Reserve Bank of India raised the repo rate by 25 basis points to 5.50%, its first hike since February 2023, and shifted its stance to calibrated tightening. The central bank flagged that CPI inflation, at 4.82% in August, has stayed above its 4% target for three straight months. Costlier crude feeds directly into that inflation worry, which is why the market is treating the two events as one problem rather than two. Persistent selling by foreign institutional investors and high global bond yields have added to the gloom.

Signs of nervousness, and a few exceptions

The India VIX, the market's gauge of expected volatility, jumped 6.5% to 14.80 around noon. Broader markets also weakened, with the Nifty Midcap and Smallcap indices down roughly 0.9% and 1.1% in the afternoon. Auto stocks such as Bharat Forge, Bosch and Tube Investments were among the heavier losers, and realty names including Lodha Developers and Phoenix Mills were under pressure.

There were pockets of strength. IT shares such as Infosys and HCLTech gained ahead of quarterly results from TCS. Fino Payments Bank rallied about 17% after a September business update showing its CASA base had grown to 1.91 crore accounts.

What to watch

Crude is now the variable that matters most. If Brent holds above $104, pressure on oil marketers, airlines and the rupee is likely to persist, and the case for further RBI tightening grows. A pullback in oil would give the Nifty room to defend its 52-week low.

This is an original summary based on public reporting. See our editorial policy for how we source, write, and correct our stories.