Among the Sensex stocks, Hero MotoCorp fell 4.4%, Axis Bank 3.75% while ICICI Bank, SBI, Bajaj Auto, Tech Mahindra, Tata Steel, Maruti, HDFC and Bharti Airtel declined between 2% and 3%.

Analysts say that a jump in oil prices could hurt the recovery in the economy after GDP growth for the June quarter fell to a six-year low of 5%.

 India’s current account and fiscal deficit could take a hit if oil prices continue to rise after the attack, RBI governor Shaktikanta Das had said on Monday.

Oil prices remained near 4-month highs today with the market remaining on tenterhooks over the threat of a military response to attacks on Saudi Arabian crude oil facilities that halved the kingdom’s output and prompted a price spike. Saudi Arabia is the world’s top oil exporter and has been the supplier of last resort for decades.

On Monday, the oil prices surged nearly 20% in intraday trading in response to the attacks, the biggest jump in almost 30 years, before closing nearly 15% higher at four-month highs.

“The sharp surge in crude oil prices has definitely changed sentiments as it has an adverse impact on Indian economy. Going forward, investors would keep a close watch on geo-political developments as any further escalation could take oil prices even higher and it would be harmful for Indian markets and economy,” said an expert. 

 Also on the radar is US Fed’s policy announcement tomorrow. However, Mishra says that commentary on growth and rate outlook would be a key reason to watch out for. On the domestic front, he adds, the recent announcements of new measures to boost economy are positive, but the expectations of GST rate cut are high, especially for the auto sector.

 “The GST meet is scheduled on September 20. Hence, given the current scenario, we expect the markets would stay volatile in the near term

 Oil marketers BPCL, Indian Oil and HPCL extended losses to a second day, shedding 2% to 3%.

 Trading companies MMTC Ltd and State Trading Corporation of India Ltd plunged today after trade minister Piyush Goyal today said the government will shut state-owned trading companies such as State Trading Corporation (STC), Project and Equipment Corporation (PEC) and MMTC one by one as “the government has no business of remaining in such businesses”.

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