3:50AM New York – Mumbai shares fall sharply on a surge in crude oil prices and steep decline in the U.S and European markets

Mumbai stocks fell sharply in the morning trading and by mid-day dropped nearly 616 or 4.3% to 13,806. The Sensex index fell at the opening after the crude oil rose to $140 a barrel in international market.

Banks, autos and cement stocks dropped Mahindra & Mahindra and Tata Motors plunged more than 6%. State Bank of India and ICICI Bank fell 3%.

Reliance Industries will begin producing gas from its offshore exploration location in Krishna Godavari basin by September. The largest oil company in India is expected to pump 25 million cubic meters a day and increase production to 40 million cubic meters a day.

International markets in Europe, U.S. and south America fell sharply. The indexes Nasdaq, S&P 500 and Dow dropped nearly 3% and FTSE 100 index declined 2.6% on Wednesday.

In regional trading this morning, Nikkei 225 index in Japan dropped 2.01% to 13,544, in Hong Kong Hang Seng index fell 1.8% to 22,058 and in Australia ASX 200 dropped 1.3% to 5,237.

European market averages are trading lower at the opening led by a decline technology and manufacturing stocks.

Crude oil futures rose another $2 in Asian trading, above $141 a barrel after comments from the Libya suggested that oil price may rise to $150 a barrel in the near term.