Sensex, Nifty slip into red amid inflation concerns; Orient Electric, BPCL & IGL down up to 5%; BCG up 10%

Indian equity benchmarks slipped in early trade on Monday after opening higher in a highly volatile session. Inflation concerns soured investor sentiment on a sharp rise in crude oil prices after Saudi Arabia and other oil exporting countries announced a surprise production cut. Oil prices surged today as Brent oil futures jumped $4.30 or 5.38 per cent to $84.19 a barrel, while US crude climbed $4.17 or 5.51 per cent to $79.84. On the global front, Asian shares were mixed.

"The strongest headwind is the sharp 5 per cent spike in Brent crude caused by the unexpected output cut by OPEC+. This will make inflation management tough for the RBI  and therefore a 25 bps (basis points) rate hike by the MPC on April 6 is a given now," V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

India is an oil-importing country and a rise in crude oil prices is a negative as the commodity constitutes a significant share of the country's import bill.

"On April 4, there will be a holiday due to Mahavir Jayanti. The meeting's outcome will be announced by RBI Governor Shaktikanata Das on April 6 (weekly expiry), and Dalal Street will be watching for comments on inflation and growth. It will also be interesting to see if the central bank hints at a pause or continues to raise rates in order to keep inflation under control," Deven Mehata, Equity Research Analyst, Choice Broking.

The 30-share BSE Sensex fell 108 points or 0.18 per cent to 58,883 in the early trade, while the broader NSE Nifty moved 18 points or 0.11 per cent lower to trade at 17,341.

Mid- and small-cap shares were positive as Nifty Midcap 100 rose 0.19 per cent and small-cap climbed 0.57 per cent.

Five out of the 15 sector gauges -- compiled by the National Stock Exchange -- were trading in the red. Sub-indexes Nifty FMCG, Nifty IT and Nifty Metal were underperforming the NSE platform by falling as much as 0.65 per cent, 0.61 per cent and 0.35 per cent, respectively.

On the stock-specific front, BPCL was the top Nifty gainer as the stock tanked 4.21 per cent to Rs 329.80. Orient Electric, Adani Enterprises, Hindustan Unilever, Nestle India and Tech Mahindra were also among the losers. Shares of Orient Electric were trading 4.57 per cent lower.

The overall market breadth was weak as 2,058 shares were declining while 577 were advancing on BSE.

On the 30-share BSE index, Infosys, HUL, ICICI Bank, Reliance Industries, TCS, HDFC and Asain Paints were among the top laggards. Further, ITC, Nestle India and Tech Mahindra deepened the fall.

In contrast, Maruti Suzuki India, Bharti Airtel, L&T, Kotak Mahindra Bank and M&M were trading in the green. Also, shares of Brightcom Group extended their surge for the second session today. The stock rose 10 per cent to hit its upper price band of Rs 16.10.

Sensex had jumped jumped 1,031 points or 1.78 per cent to close at 58,992 on Friday; while Nifty had moved 279 points or 1.63 per cent higher to settle at 17,360.

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