India gained immensely by plummeting oil prices even as a combination of the spreading coronavirus and Opec discord with Russia over oil cutbacks hit market sentiment.
The tumbling Indian stock markets wiped off Rs7,00,000 crore of investor wealth even as crude prices plummeted to levels below $32 a barrel, giving India a windfall.
Both benchmarks North Sea Brent and US West Texas Intermediate crude futures slid as much as $14 to trade at $31.02 and $27.34 a barrel, respectively, before recovering some of their losses.
At current levels, India, which imports 80 per cent of its oil requirements is expected to save $52 billion in annual import bill, say reports.
Indian stock markets on Monday recorded their worst single-day fall in more than four years, tracking global markets lower, as panic over the economic fallout of the coronavirus outbreak intensified and oil prices plummeted.
The benchmark S&P BSE Sensex ended 5.17 per cent lower at 35,634.95 while the NSE Nifty 50 index closed 4.90 per cent down at 10,451.45, its worst daily decline since August 2015.
European markets suffered heavy losses in early trade, while MSCI’s broadest index of Asia-Pacific shares outside Japan lost 4.4 per cent in its worst day since August 2015.
Global trade and business activity reached a standstill as the number of people infected with the coronavirus topped 110,000 globally and the outbreak spread to more than 100 countries.
Falling oil prices, however, is expected to help boost economic growth in India, one of the world’s top oil importers, as well as several low-income countries that depend on imported oil.
State-run Oil and Natural Gas Corp and private sector oil giant Reliance Industries Ltd were the worst affected with the stocks dropping by nearly 16 per cent and 13 per cent, respectively.
The rupee also fell 0.13 per cent to 74.0562 against the dollar in early trade, hitting its lowest since October 2018.
Crude oil’s market collapse follows Saudi Arabia’s decision to raise production significantly after the collapse of OPEC’s supply cut agreement with Russia.