Indian Markets End Lower as Fuel Price Hike Hits OMC Stocks

Indian markets reversed early gains on Friday after the government raised petrol and diesel prices by ₹3 per litre, triggering selling in oil marketing company stocks. Rising crude oil prices and a record fall in the rupee also weighed on investor sentiment through the session.

Domestic equities closed marginally lower on 15 May after a volatile trading day that saw benchmark indices surrender morning gains amid concerns over inflationary pressure and higher energy costs.

Early Gains Fade

The 30-share BSE Sensex settled at 75,237.99, while the Nifty 50 ended slightly lower at 23,643.50. Markets had opened in the green tracking overnight gains in US equities, but sentiment weakened steadily during the afternoon trade.

Traders pointed to rising global crude prices and the government’s decision to increase fuel rates as the key triggers behind the reversal.

The petrol and diesel price hike came into effect on Friday, marking the first increase in retail fuel prices in more than four years.

OMC Stocks Under Pressure

Shares of oil marketing companies witnessed heavy selling after the announcement. Investors appeared concerned over the possible impact on fuel demand, inflation and broader consumption trends.

The Nifty Oil & Gas index declined 1.64%, emerging among the worst-performing sectoral indices of the day.

Broader weakness was also visible in metal and banking counters. Nifty Metal and PSU Bank indices closed lower alongside oil & gas stocks, while media shares bucked the trend. The Nifty Media index rose nearly 2%, supported by stock-specific buying.

Market participants said concerns over imported inflation resurfaced as crude oil prices climbed sharply in the international market.

Brent Crude Climbs

Global benchmark Brent crude surged 3.65% to around $109.6 per barrel, adding pressure on emerging markets including India.

The rise came despite comments from US President Donald Trump suggesting that Xi Jinping was willing to help maintain stability in the Strait of Hormuz.

In an interview with Fox News, Trump said the Chinese President had expressed interest in helping efforts aimed at keeping the crucial oil shipping route open amid ongoing tensions involving Iran.

China remains one of the largest buyers of Iranian crude oil, making the Strait of Hormuz strategically important for Beijing as well.

Still, commodity traders remained cautious as geopolitical uncertainties in West Asia continued to push oil prices higher.

Rupee Hits Record Low

Currency markets added to investor worries during Friday’s session.

The Indian rupee slipped below the 96-per-dollar mark for the first time, touching a record low of 96.07 against the US dollar in intraday trade.

Dealers said sustained dollar demand from importers and rising crude prices contributed to the sharp depreciation. A weaker rupee generally increases India’s import bill, particularly for energy purchases, and can add further pressure on inflation.

The currency movement also kept foreign institutional investors cautious, although provisional data showed FIIs remained net buyers in equities worth ₹188 crore on Friday.

Asian Markets Weak

Most Asian markets closed lower as investors tracked oil prices and global risk sentiment.

South Korea’s KOSPI index fell more than 3%, while Japan’s Nikkei and Hong Kong’s Hang Seng also ended in negative territory.

Overnight, US markets had finished marginally higher, with the Dow Jones, Nasdaq and S&P 500 posting modest gains. However, the positive cues failed to support Indian equities through the latter half of Friday’s session.

Focus Shifts To Inflation

Analysts said market participants will now closely monitor the impact of higher fuel prices on retail inflation, transport costs and corporate margins over the coming weeks.

Attention is also expected to remain on crude oil movements and currency stability, especially as global geopolitical tensions continue to influence commodity markets.

For domestic investors, the sharp move in oil prices and the rupee’s historic fall below 96 per dollar are likely to remain key market triggers in the near term.