Indian shares slip on global woes; MSCI rejig spurs stock-specific volatility

Indian shares closed lower on Monday, Business Recorder reported, as costlier crude and worries over possible U.S. rate increases weighed on investor sentiment. The Nifty 50 slipped 0.39 per cent to 24,080.40 points, while the BSE Sensex shed 0.4 per cent. Over August, the two indexes had fallen 1.2 and 1.5 per cent respectively.

Global markets stayed subdued after renewed hostilities involving the U.S. and Iran drove crude prices upward. Borrowing costs in Germany and Japan also hit fresh multi-year highs as the odds of a near-term U.S. rate increase rose. Because India imports 85 per cent of its crude needs, a prolonged climb in oil costs could prompt higher interest rates there.

A new closing mechanism for stocks with futures and options, combined with an MSCI index rebalancing, caused sharp stock-specific swings. Reliance Industries, whose weighting was lowered, fell 0.8 per cent after its indicative price slipped 1.6 per cent during the closing auction. HDFC Bank dropped 1.6 per cent after its CEO, Sashidhar Jagdishan, said he would not seek reappointment when his term ends in late October. Eternal closed flat after an earlier 3 per cent decline, while mid-caps such as Laurus Labs, Adani Energy, SBI Card and Astral moved more, which analysts linked to larger order sizes.