Nifty slips 0.44% on oil and inflation as the average stock rises and Fear & Greed leaves extreme fear

Oil and inflation capped the rally. Nifty opened flat at 22,716, tracking slightly weaker global markets and a 2% overnight rise in oil. After a volatile start it held 22,680-22,750 through the morning, with recovery attempts at 10:30 AM and noon both fading. Selling built up and took the index below 22,700 by 12:45 PM, then a sharp drop of nearly 150 points around 1 PM reached an intraday low near 22,560 by 1:15 PM. Buyers pulled it back toward 22,650 by 1:45 PM, but the recovery did not hold and Nifty spent the last hour between 22,600 and 22,630, closing at 22,622.70 and giving up Tuesday's gains.

• Why inflation matters for the market right now: A week after the RBI raised rates and said the next move can only be a hike or a pause, wholesale inflation of 11.39% — led by fuel — strengthens the case for caution. In the US, hotter inflation and a firmer dollar add pressure on emerging-market currencies and flows.

• Defensives and oil producers held up: FMCG (+1.2%), IT (+1.1%) and Oil & Gas (+1.0%) rose, while rate-sensitive financials (-1.1%), Auto and Realty (-0.9% each) fell. Pharma (-1.3%) and Healthcare (-1.2%) were the weakest.

• Options turned more cautious: The put-call ratio fell from 1.27 to 0.91 and implied volatility rose from 12.6% to 13.1%. Options imply a 22,337-22,888 range into the October 19 expiry; the 20-day moving average at 22,858 is the first hurdle.

• Commodities: oil up, precious metals down: By 19:04 IST MCX crude was up 1.6% (₹9,029) and 6.2% over five sessions; gold fell 1.2% (₹1,46,715) and silver 2.8%. Iron ore futures fell toward four-year lows on weaker Chinese demand.

• Valuations unchanged: Nifty 50 trades at 19.3x trailing earnings, lower than on 99% of days since April 2021; Smallcap 250 at 34.4x, higher than on 90% of days.

• US inflation at 3.7%: September CPI accelerated from 3.4% and beat the 3.6% expected, driven by energy: gasoline up 34.2% and fuel oil up 74.2% year-on-year.

• Dollar at its strongest since April 2025: The dollar index rose as much as 0.5% to 102.72 as the inflation print reinforced expectations of further Federal Reserve tightening.

• China's exports jump 36%: September exports rose 36.3% year-on-year against 25.5% expected, and imports 31%, on strong demand for semiconductors and green technology.

• Japan invests in US chip plants: Japan will invest up to $21 billion in two semiconductor factories in New York operated by GlobalFoundries, as part of its $550 billion US investment commitment.

• Crude around $95: Per the AMR, improving shipments through the Strait of Hormuz and higher Saudi output offset concerns over renewed attacks in the Middle East.

• Wholesale inflation at 11.39%: September WPI rose from 9.92% on higher food, fuel and manufactured-goods prices; fuel and power inflation reached 25.85%.

• Distribution commissions under pressure: Brajesh Kumar Singh, MD and CEO, quoted in the AMR, said proposed caps on insurance distribution commissions would cut the firm's bancassurance earnings by about ₹150 crore in life insurance, with fee income across mutual fund and wealth distribution reduced by roughly ₹200 crore. IRDAI's consultation on insurance distribution closes for feedback on October 25.

• Tata Technologies grows revenue 28%: Q2 net profit rose 4% to ₹171 crore while revenue jumped 28% to ₹1,699 crore, led by its services business.

• Thirteen straight sessions: Foreign investors sold a provisional ₹1,857 crore, extending net selling to 13 sessions, per the AMR. The last three days are among the smallest of the run.

• Domestic buying exceeded it again: DIIs bought ₹2,670 crore, more than the foreign selling for the second session in a row. Both of the last two foreign figures are provisional and may be revised.

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