Indian shares weighed down by spiralling global oil prices while bonds staged a corrective bounce on Monday after the weekend's slide as an anticipated oil price hike did not materialise and the finance minister assured the market that it need not worry about interest rates.
The Mumbai Stock Exchange benchmark index pared losses to end just 0.01 percent lower at 5,102.37 points.
"Crude oil prices fell slightly during the day and that helped drag the index up from lows," said Bharat Shah, a director at Vikram Kenia Securities.
"Oil remains the major concern for now," he added. Monday's close was the lowest since July 28.
But Tata Iron and Steel Company Ltd, India's second-biggest steel maker which makes up 3 percent of the index, rose 4 percent to 266.15 rupees on news it will buy the steel business of Singapore's NatSteel Ltd for $286 million.
The key 10-year bond yield closed at 6.5693 percent, down from 6.6244 percent on Saturday, when the yield jumped 10 basis points after a top central banker warned banks to limit their government bond exposures.
"The market had fallen very sharply in thin trade on Saturday, and bounced back this morning," said S. Ananthnarayan, vice president at Kotak Mahindra Capital Company.
Bond traders said the relief rally could have been triggered by oil companies not hiking petrol and diesel prices as expected, despite surging global crude prices.
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