The Indian stock market is poised for a volatile week, influenced by the Reserve Bank of India's monetary policy decision, crucial global macroeconomic data, and the escalating geopolitical tensions in West Asia, according to market analysts.
Indian benchmark indices, Sensex and Nifty, recorded their fifth consecutive day of losses, driven by investor caution over rising oil prices due to West Asia tensions and renewed concerns regarding US trade tariffs.
India's purchase of Russian oil has risen to 2 million barrels per day in August, as refiners continue to prioritise economic considerations in their sourcing decisions. As much as 38 per cent out of an estimated 5.2 million barrels per day of crude oil imported in the first half of August came from Russia, according to global real-time data and analytics provider Kpler.
India's crude oil import bill has jumped by over 19 per cent to $5.615 billion in the first four months of the current fiscal as opposed to $4.731 billion in the same period the previous year.
Foreign Portfolio Investors (FPIs) withdrew Rs 49,340 crore (USD 5.16 billion) from Indian equities in June, driven by global risk aversion, a preference for developed markets, soaring US bond yields, and stretched domestic valuations, bringing total withdrawals to Rs 2.7 lakh crore so far in 2026.
India's crude oil imports jumped by 23.3 per cent in July this year on increased demand for oil products, a senior petroleum ministry official said.
The Indian rupee rebounded against the US dollar following intervention by the Reserve Bank of India, amidst ongoing concerns about foreign capital outflows, rising crude oil prices, and geopolitical instability.
Russia's state-owned oil firm Rosneft has agreed to supply up to 500,000 barrels per day (bpd) of crude oil to Indian upstream oil and gas major Reliance Industries (RIL) in the largest-ever energy deal between the two countries, Reuters reported on Thursday. The 10-year agreement amounts to 0.5 per cent of global oil supply and is valued at roughly $13 billion per year at current prices, it said.
The government has to take a call on reducing or retaining the excise rate.
India is the 4th largest oil consumer after the US, China and Japan.
The Confederation of Indian Industry (CII) has urged the Indian government to gradually restore the Rs 10-per-litre cut in special additional excise duty on petrol and diesel over six to nine months. This move aims to relieve pressure on government finances as crude oil prices stabilise, without significantly impacting consumer sentiment.
India has substantially increased its crude oil imports from the US, with the country's share in India's crude basket hitting a record 14.3 per cent in December, commerce ministry data showed.
Reserve Bank of India (RBI) Governor Sanjay Malhotra stated that preventing second-round effects of supply shocks, where inflation expectations rise due to prolonged disruptions, is the primary role of monetary policy. He also defended the RBI's foreign exchange market interventions, asserting it did not commit to an 'indefensible peg'.
Calling such reports baseless, Finance Minister Nirmala Sitharaman said there was no such move under consideration.
India's exports to the US contracted 8.6 per cent to $6.3 billion in October, while imports rose 13.9 per cent to $4.5 billion leading to a trade surplus of $1.8 billion during the month.
The government on Thursday restored liquefied petroleum gas (LPG) supplies to commercial consumers such as hotels, restaurants and other businesses to pre-crisis levels, and lifted sector-specific restrictions imposed during the recent West Asia conflict, in a sign that energy supply concerns are easing as global markets stabilise.
West Asia conflict triggers sharp sell-off in Indian markets, with realty, banking and auto stocks leading losses amid energy shock fears.
India has condemned the escalating attacks on commercial shipping in West Asia, particularly after a Thai-flagged vessel en route to India's Kandla Port was targeted in the Strait of Hormuz. The attacks have disrupted global oil and gas supplies, impacting India's energy imports.
Russian President Vladimir Putin's visit to India this week aims to secure energy supplies, stabilise defence deliveries and ensure bilateral trade continues smoothly despite strong Western sanctions, GTRI said on Tuesday.
Sensex and Nifty post steepest weekly loss in over a year, falling nearly 3 per cent.
The Reserve Bank of India (RBI) has opted to keep its key interest rates unchanged at 5.25%, anticipating a global economic recovery following a ceasefire in the US/Israel-Iran conflict, despite ongoing inflationary pressures and currency fluctuations.
Sanctioning Russian oil would have led to a sharp surge in oil prices to above $80 per barrel levels, which would impact pump prices in the US ahead of midterm elections next year.
India's import of discounted crude oil from the Russian Federation hit an all-time high in May, with state-run refiner IOC becoming the biggest importer of Russian oil, relegating Reliance Industries to the second place, trade and shipping data show. Indian imports of Russian oil, accounting for over 46 per cent of its total crude oil imports in May, have grown after strong backing by New Delhi, with state-run refiners powering imports of discounted crude. Discounts on Russian oil average around $10 a barrel, said an official from a state-run refiner. IOC's May purchases rose by 64 per cent on the month, and accounted for half of its total crude imports last month, ship tracking data show.
India's import of cheap Russian oil scaled another record in May and is now more than the combined oil bought from Saudi Arabia, Iraq, UAE and the US, industry data showed. India took 1.96 million barrels a day from Russia in May, 15 per cent more than the previous high in April, according to data from energy cargo tracker Vortexa. Russia now makes up for nearly 42 per cent of all crude oil India imported in May.
The Reserve Bank of India (RBI) has kept its key lending rate, the repo rate, unchanged at 5.25 per cent for the second consecutive time, citing concerns over rising energy prices, supply disruptions from the West Asia crisis, and potential inflationary pressures.
Reliance Industries Ltd has consistently remained compliant with international sanctions and is expected to adhere to upcoming measures on Russian oil, analysts said, estimating that oil sourced from Russia contributes just 2.1 per cent to its consolidated EBITDA. Reliance operates the world's largest single location refining complex, with more than half of the capacity exclusively dedicated for exports.
The Sri Lankan government attributes the sharp depreciation of the rupee against the US dollar to the ongoing conflict in West Asia, citing increased costs for essential imports like gas, fertiliser, and oil.
In the present hyper-connected world, there are many domestic and global factors that affect financial markets. Of them, the most powerful and often least predictable are geopolitical events, which often boil down to one diplomatic headline.
Markets face risk of a prolonged bear phase as oil shocks and geopolitical tensions test inflation, growth and investor confidence globally, points out Debashis Basu.
The government has sharply reduced excise duty on petrol to 3 and diesel to zero, offering major relief to consumers. Here's how the price cut will impact fuel rates and inflation.
Maharashtra Chief Minister Devendra Fadnavis rode a motorcycle to work following Prime Minister Modi's appeal to cut down fuel consumption amid the ongoing conflict in West Asia.
The Indian government is dealing with the matter having in mind the national interests of this country in the first place, he said.
A senior Russian diplomat has called the US pressure on India for its procurement of Russian crude oil "unjustified," expressing confidence in continued energy cooperation between India and Russia despite external pressures.
Oil producers cartel OPEC's share in India's oil imports fell to an all-time low of 46 per cent in April as purchases of cheaper Russian oil peaked, industry data showed. Organization of the Petroleum Exporting Countries (OPEC) nations, mainly in the Middle East and Africa, had a 72 per cent share of all crude oil India imported in April 2022. This share slid to 46 per cent in April 2023, according to energy cargo tracker Vortexa.
On the 30-share index, Maruti was the biggest loser, shedding 3.60 per cent. Other major laggards were Yes Bank, IndusInd Bank, Tata Steel, Hero MotoCorp and NTPC -- ending up to 2.33 per cent lower.
'The situation globally is quite challenging, but we have the confidence and courage of conviction that we will come out winners even in this challenging time.'
'Investors shouldn't let fear dictate their decisions. The most important step is simply to begin investing.'
The stubbornly high global crude oil prices are opening up a can of worms to heightened inflation risks and likely to disrupt government's fiscal maths along with deteriorating global financial conditions.
With India making it clear that the US doesn't have enough spare capacity for crude oil, Washington, DC, now wants India to sign fixed-term liquefied natural gas (LNG) contracts with American producers, multiple sources in the know said.
