Oil Impact: TCS pips Reliance Industries in market cap, becomes biggest listed entity

Tata Consultancy Services (TCS) became the most valued company in terms of market capitalisation on March 9 after a steep fall in crude prices pushed Reliance Industries to the number 2 slot as Indian markets remained firmly in a bear embrace.

 Its top rank, however, didn’t help the stock price of the country's largest IT company. TCS was trading 5.52 percent down at Rs 2,000.90 on the BSE, with a market capitalisation of Rs 7,50,814.66 crore, at the time of writing this copy.

 The oil-to-retail giant Reliance Industries, the first company to cross Rs 10 lakh crore in market capitalisation, saw the erosion of more than Rs 2.7 lakh crore of the market cap from its record highs touched in December 2019.

 The stock was quoting at Rs 1,151.55, down Rs 118.50, or 9.33 percent, with a market cap of Rs 7,29,998.35 crore, as a fall in oil prices impacts its earnings.

 International benchmark Brent crude futures crashed more than 30 percent on March 9, the biggest single-day fall since 1991. The price crashed after Organization of the Petroleum Exporting Countries (OPEC) failed to strike a deal with its allies on production cuts and as a result, Saudi Arabia started a price war with Russia by reducing the price by $6-8 a barrel.

 Saudi Arabia also plans to step up production in April in a market already battling a demand crunch as the coronavirus outbreak spreads.

Brent crude futures traded at $32.88 a barrel, down 27.37 percent or $12.39, the biggest percentage fall since January 27, 1991, the period of first Gulf War. It was trading at the lowest since February 12, 2016.

US oil prices also corrected by 30 percent or $12.32, to $28.96 a barrel.

Saudi Arabia, the world's biggest oil exporter, is attempting to punish Russia, the world's second-largest producer, for refusing production cuts proposed by the OPEC, reports Reuters.

The oil price war and rising coronavirus fears hit market sentiment globally. The BSE Sensex was down 1,598.97 points or 4.26 percent to 35,977.65 and the Nifty50 lost 443.90 points or 4.04 percent to 10,545.60, while Asian counterparts were down between 2.5-7.3 percent.