September 17, 2019 / 4:49 AM / a month ago

Indian shares dip as crude surge seen hurting economy

* NSE, BSE indexes down 0.3% each

* Indiabulls Housing falls on report of tighter RBI scrutiny

Sept 17 (Reuters) - Indian shares edged lower for a second straight session on Tuesday on fears that a surge in crude prices following attacks on Saudi oil facilities could hurt the economy further.

Energy stocks were down in early trading, even as oil prices shed some of their massive gains on Tuesday after the United States flagged the possible release of crude reserves.

The broader NSE index was down 0.28% at 10,972.45 as of 0419 GMT, while the benchmark BSE index was 0.3% lower at 37,013.09. The rupee weakened 0.22% to 71.76 against the dollar.

Investors in other Asian markets were also on the sidelines ahead of an expected interest rate cut from the U.S. Federal Reserve on Wednesday.

With the threat of military action over the attacks keeping crude prices elevated, emerging markets such as India - the world’s third-biggest importer of oil - will remain under pressure.

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

“The jump in crude could affect recovery in the economy, which is hurting from a growth slowdown,” said AK Prabhakar, head of research at IDBI Capital in Mumbai.

Oil marketers extended losses to a second day, with Indian Oil Corporation Ltd and Bharat Petroleum Corporation Ltd shedding 1.4%-2.1%.

Indiabulls Housing Finance Ltd slid 3.4% on a report that the central bank had intensified its checks on the mortgage lender and Lakshmi Vilas Bank, which plan to merge, after fresh accusations of wrongdoing and the sudden exit of the bank’s chief executive officer. Lakshmi Vilas Bank shares fell 4.4%.

Trading companies MMTC Ltd and State Trading Corporation of India Ltd plunged between 17% and 18% after a newspaper reported that the government was planning to shut down the companies.

The Nifty IT index, which tracks software companies, fell 0.7%.

Meanwhile, miner Vedanta Ltd climbed 2.5% to its highest in nearly seven weeks, and was the top gainer on both indexes. (Reporting by Chris Thomas in Bengaluru Editing by Saumyadeb Chakrabarty)

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