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Stocks

Iraq tensions deal heavy blow to Indian oil stocks

SINGAPORE -- India's benchmark Sensex stock index saw its third-sharpest drop so far this year Friday, falling 348.04 points to 25,228.17, with state-run oil companies hit especially hard.

     The market opened on buying, thanks to such factors as the release Thursday night of figures showing stronger industrial production in April.

     But oil prices are soaring, and India relies on imports for 80% of its supply. Fears that this, combined with low rainfall expected for this year's monsoon season, may negatively affect inflation and the economy caused selling to dominate the market.

     State-run oil companies were hit especially hard. The largest, Indian Oil, sank 5% to 333.20 rupees ($6.09) and plunged 9% at one point to its lowest in about a month. Bharat Petroleum and Hindustan Petroleum temporarily slipped 7% and 9% as well.

     Crude oil futures have climbed as armed radical Islamists expand their sphere of control in the oil fields of northern Iraq. Concerns about an unstable supply and high prices cutting into profits sparked broader selling.

     India's state-run oil companies sell diesel, kerosene and liquefied petroleum gas at prices regulated by the government. These low prices have led to losses, weighing on earnings.

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