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India's key stock index drops 3 percent on worries about soaring oil prices

India's key stock index drops 3 percent on worries about soaring oil prices

Indian shares dropped sharply Monday on worries about soaring crude oil prices.
The Bombay Stock Exchange's benchmark Sensex index was down 473 points, or 3 percent, to 15,108.40 points in afternoon trading after earlier sagging as much as 4.4 percent.
At one point, the index slipped below the 15,000-mark for the first time since mid-March.
Heavy selling in blue chips in the power, banking, oil and gas sectors pulled the market down.
Crude oil prices surged late last week, with the July contract on the New York Mercantile Exchange jumping 8 percent Friday to US$138.54 a barrel, a record close. In Asian trading Monday, oil fell below US$137 a barrel.
"It's anybody's guess where the oil prices will go. Nobody can call the price," said Gul Tekchandani, a Mumbai-based investment adviser. "Clearly nobody will venture close to the market. The sentiment is negative."
On the broader National Stock Exchange, the 50-company S&P Nifty index fell 125 points or 2.7 percent to 4,500 points after declining 3.6 percent to 4,460.90 points in morning trade.
Oil & Natural Gas Corp. or ONGC, slipped 5.4 percent to 888 rupees. Automobile stocks declined, with Tata Motors Ltd. among the big losers, sinking 5.1 percent to 513 rupees, Mahindra & Mahindra Ltd. was off 3 percent at 564 rupees and Maruti Suzuki India Ltd. down 2.4 percent at 735 rupees.
Banking stocks also dropped with State Bank of India down 3.8 percent to 1,284 rupees, followed by HDFC Bank off 4.5 percent to 1,182 rupees and ICICI Bank Ltd. off 1.9 percent to 757 rupees.
Petrochemical company Reliance Industries Ltd. sank 2.6 percent to 2,181 rupees.
Last week, India cut government subsidies on gasoline, cooking gas and diesel fuel, effectively raising retail prices. The move triggered angry demonstrations in several parts of the country.
Gasoline prices were raised 5 rupees (US$0.13) a liter. In New Delhi, that meant an 11 percent increase to 50 rupees (US$1.20) a liter (US$4.56 a gallon). Fuel prices vary between states, which also impose their own taxes.