Sensex falls 251 points to 72,781 as wholesale inflation climbs to 11.39% in September

The rising rate of wholesale inflation weighed on Indian stock markets on Wednesday (October 14). The market swung through the day, and the Bombay Stock Exchange's Sensex finally closed 251 points lower at 72,781. The National Stock Exchange's Nifty ended 99 points down at 22,622.

Shares of banking, financial services, pharma and realty sectors saw selling pressure. IT shares, on the other hand, gave the market some support.

Inflation based on the wholesale price index rose to 11.39 per cent in September, from 9.92 per cent in August. Higher prices of fuel, power, food items and manufactured goods have added to the inflationary pressure. These figures affected investor sentiment.

After a sharp rally on Tuesday, the market opened on a mixed note on Wednesday. The Sensex opened at 73,050 and the Nifty began trading around 22,716. Gains in IT shares kept the market somewhat positive in the early session. After noon, however, selling in financial and other key sectors increased and the main indices slid. At about 1.30 pm the Sensex had dropped to 72,654 and the Nifty had gone below 22,600. The market then tried to recover somewhat.

Shares of some large IT companies stayed strong amid the fall. Infosys rose about 2.51 per cent, Tech Mahindra gained 2.20 per cent and TCS 1.54 per cent. Shares of Hindustan Unilever, NTPC, Reliance Industries and HCL Tech also supported the market.

Shares of Bajaj Finserv, Bajaj Finance, Mahindra & Mahindra and IndiGo fell by roughly 1.50 to 2.55 per cent. Eternal, Adani Ports, ICICI Bank, Sun Pharma, Larsen & Toubro and Titan also saw selling pressure.

Pressure continued on banking and financial services shares. Bank Nifty fell about 0.30 per cent, while the Nifty Financial Services index was down 1.11 per cent. Indices for metal, pharma, private banks, realty, healthcare and cement also closed lower. Some indices for IT, FMCG, oil and gas, media, chemicals and public sector banks traded positive.

In the international market, crude oil has risen to about $107 a barrel. There are fears that the conflict between Yemen's Houthi rebels and Saudi Arabia could affect oil supply, raising volatility in global markets. India imports crude oil in large quantities, so rising oil prices could affect the country's economy and companies' production costs.

Selling by foreign portfolio investors continues. On Tuesday they were net sellers of shares worth about Rs 1,305 crore, the 13th straight trading session. Domestic institutional investors, meanwhile, made net purchases of about Rs 2,439 crore, which eased the impact of foreign selling somewhat.

The direction of the market ahead may depend on companies' September quarter results, the inflation situation, crude oil prices and the stance of foreign investors. Investors are watching the results of companies in IT, banking, automobile and financial services in particular. Given the volatility, it will be important for investors to consider company performance, risk and market conditions while making decisions.