Indian equity benchmark indices ended Wednesday's session lower as investors remained cautious amid rising crude oil prices and mounting inflation concerns. The BSE Sensex closed at 72,781.89, falling 251.89 points, while the NSE Nifty50 settled at 22,622.70, down 99.25 points. During the closing auction session, the Sensex fell 251.89 points to 72,781.89, while the Nifty50 declined 99.25 points to 22,622.70. The selling pressure was primarily attributed to declines in financial and PSU banking stocks, with Shriram Finance, Bajaj Finance and BSE among the top losers in the Nifty50 index. The Bank Nifty settled at 55,316, down 165.05 points or 0.30%, while the Nifty Midcap 100 declined 0.08% and the Nifty Smallcap 100 fell 0.32%. As per The Hindu BusinessLine, "A hotter-than-expected domestic WPI print pushed bond yields higher, reviving concerns over a tighter monetary policy trajectory and weighing on automobiles, private banks and metals."
India's wholesale inflation accelerated to a 30-month high of 11.4% in September, up from 9.9% in August, according to provisional data released by the Ministry of Commerce and Industry. The all-commodities index rose to 112.5 in September from 110.8 in August, driven by a broad-based pick-up in prices of food, fuel and manufactured goods. The goods output producer price index (PPI) also rose to 112.5 in September, taking the PPI inflation rate to 11.4% from 9.81% in August. This represents the highest level of wholesale inflation since the current 2022-23 series began, with pressure building across the board rather than in any single corner of the economy. The final WPI for July remained unchanged at an index level of 110.0 with annual inflation also unchanged at 9.78%, as reported by the Ministry of Commerce and Industry. As per The Times of India, retail inflation also rose to 5.54%, indicating that price pressures are broadening beyond consumers to producer and input costs, raising the risk of margin compression for companies unable to pass on higher expenses.
Fuel and power inflation rose to 25.9% in September from 22.9% in August, as crude petroleum and natural gas inflation surged to 57.32% from 34.41% in the previous month. Coal and lignite inflation also rose to 9.31% from 1.57%, while mineral oils inflation moved up to 40.02% from 38.48%. Fuel and power prices overall rose to an index level of 110.5 in September from 108.3 in August, according to the official data. The surge in fuel and power inflation comes after a moderation from May through June, primarily led by the crude petroleum and natural gas category, which had eased from 61.51% in May before the massive uptick in September. The major contributors to wholesale inflation during September included mineral oils, food articles, crude petroleum and natural gas, coal and lignite, basic metals, chemicals and chemical products, textiles, rubber and plastic products and electrical equipment. As per The Times of India, fuel and power prices rose amid uncertainty surrounding key maritime chokepoints due to renewed hostilities in West Asia.
Inflation in manufactured products, which account for nearly two-thirds of the WPI basket, rose to 9.8% from 8.4% in August, with acceleration being particularly sharp in basic metals (17%), chemicals and chemical products (16.7%), textiles and rubber products (13.7%) and electrical equipment (12%). For primary articles, inflation rose to 8.67% in September, the highest in the new series, from 7.76% in August. Within the group, food inflation jumped to a 21-month high of 8.14% from 5.67% in August, while minerals inflation rose to 9.51% from 8.24%, which more than offset the moderation in non-food inflation to 10.28% from 14.79% in August. The manufactured products rate, which carries a weight of 63.1%, rose to 9.76% from 8.37% — the highest in the current 2022-23 series. Within manufactured products, textiles, wearing apparel, chemicals and chemical products, basic metals and electrical equipment witnessed a hardening in prices during the month, with computer, electronic and optical products rising to 4% after having contracted for several months. The WPI Food Index recorded annual inflation of 8.66% in September compared with 7.05% in August, with the major contributors including mineral oils, food articles, crude petroleum and natural gas, coal and lignite, basic metals, chemicals and chemical products, textiles, rubber and plastic products and electrical equipment.
Brent crude held above $107 a barrel, with fresh Gulf attacks and reports that Tehran plans to escalate tanker strikes near the Strait of Hormuz sustaining the supply-risk premium. The rise in oil prices has implications for India, a major crude importer, as it can increase import costs and add to inflationary pressures. Higher energy and fertiliser costs can also feed into food prices and manufacturing expenses. MCX crude rose over 1%, crossing the ₹9,000 mark, as per The Hindu BusinessLine. CareEdge chief economist Rajani Sinha said India's crude basket and spot brent crude prices are trading well above brent futures, indicating tightness in the physical supply of crude. "While retail fuel prices have remained unchanged, oil marketing companies have raised bulk diesel prices, which are now nearly ₹50-60 per litre higher than retail prices. Persistently elevated crude prices could increase freight, agricultural and irrigation and transportation costs, which could indirectly feed into the retail inflation," she added. The IEA cautioned that a Russian diesel supply arrangement was unlikely to materially alter the overall balance, limiting any downside pressure on prices. Provisional exchange data showed that foreign institutional investors (FIIs) sold Indian equities worth ₹1,305.13 crore on October 13, while domestic institutional investors (DIIs) purchased shares worth ₹2,439.24 crore. The contrasting flows highlighted continued domestic institutional support amid overseas selling.
Nifty IT gained 1.1% and Nifty FMCG rose 1.21%, extending buying that followed HCLTech's better-than-expected quarterly results. Oil & Gas added 1%, while Nifty Pharma was the weakest sector, falling 1.30% amid regulatory uncertainty around medicine pricing after the Supreme Court questioned the scope of trade-margin controls. Auto, metals and realty also ended lower, limiting any recovery in the benchmarks. The Indian rupee extended its gains as the dollar slipped below the ₹95 mark, supported by the RBI's recent measures to limit speculative activity and redirect oil-related dollar demand away from the spot market. Spot gold eased to around $4,140 an ounce and silver fell over 1% to $58.4. Looking ahead, markets will take their cue from tonight's US CPI print, followed by UK GDP, US PPI and retail sales on Thursday. On the earnings front, Nestlé India, Wipro, Tech Mahindra, Jio Financial Services and Polycab are scheduled to report second-quarter results Thursday. As per The Times of India, ICRA expects WPI inflation to rise further to 12% in October 2026, with higher food inflation, persistent global energy and commodity prices, and an adverse base effect contributing to the increase.
