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IT stocks buck weak trend

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Key benchmark indices languished in the negative terrain in afternoon trade. At 13:25 IST, the barometer index, the S&P Sensex, was down 139.49 points or 0.45% at 30,519.28. The 50 index was down 63.95 points or 0.67% at 9,461.80. Weak global stocks played the spoilsport.

Shares of power generation and power distribution companies edged lower. IT stocks bucked weak trend. Today's slide was led by index heavyweights ITC, HDFC and Reliance Industries (RIL).

Key benchmark indices saw a gap-down opening following weak global cues as concerns over President Donald Trump's administration spooked investors. Key indices languished in the negative terrain later during the session.

The S&P Mid-Cap index was down 1.2%. The S&P Small-Cap index was down 0.96%. The fall in both these indices was higher than the Sensex's decline in percentage terms.

The broad market depicted weakness. There were over two losers against every gainer on BSE. 1,773 shares declined and 775 shares rose. A total of 149 shares were unchanged.

The dropped 82.94 points or 0.27% at the day's high of 30,575.83 in afternoon trade. The index fell 222.21 points or 0.72% at the day's low of 30,436.56 in early trade, its lowest level since 16 May 2017. The shed 36.65 points or 0.38% at the day's high of 9,489.10 in afternoon trade. The index fell 80.50 points or 0.84% at the day's low of 9,445.25 in early trade, its lowest level since 16 May 2017.

IT stocks bucked weak trend as investors accumulated beaten down stocks after recent selling on weak rupee. Tech Mahindra (up 1.46%), Oracle Financial Services Software (up 0.36%), HCL Technologies (up 1.62%), TCS (up 3.97%), Infosys (up 1.63%), and Wipro (up 4.14%) edged higher. A weak rupee boosts revenue of IT firms in rupee terms as the sector derives a lion's share of revenue from exports.

Shares of power generation and power distribution companies edged lower. Torrent Power (down 1.8%), GVK Power & Infrastructure (down 2.08%), NHPC (down 0.97%), Tata Power Company (down 1.11%), NTPC (down 0.75%), Adani Power (down 2.27%), Power Grid Corporation of India (down 0.12%), Reliance Infrastructure (down 2.49%) and Reliance Power (down 0.95%) declined.

Shares of state run coal mining major Coal India rose 0.4% to Rs 277.60. The stock had hit high of Rs 278.50 and low of Rs 274.80 in intraday trade.

Meanwhile, the Cabinet Committee on Economic Affairs, chaired by the Prime Minister Narendra Modi, yesterday, 17 May 2017, approved the signing of fuel supply agreement (FSA) with the letter of assurance (LoA) holders. Allocation of linkages for power sector shall be based on auction of linkages or through power purchase agreement (PPA) based on competitive bidding of tariffs except for the state and the central power generating companies and the exceptions provided in Tariff Policy, 2016. Coal drawal will be permitted against valid long term PPAs and to be concluded medium term PPAs.

The approved framework ensures that all projects with linkages are supplied coal as per their entitlement. This will ensure the rights of coal supplies for FSA holders and signing of FSA with LoA holders. The policy ensures fading away of the existing LoA-FSA regime and introduction of a new more transparent coal allocation policy for power sector, 2017-SHAKTI (Scheme for Harnessing and Allocating Koyala (Coal) Transparently in India)

Overseas, European and Asian stocks edged lower as fears over the fallout from turmoil in Washington prompted investors to unload risky assets such as equities. In US, the Nasdaq yesterday, 17 May 2017 saw its worst one-day decline since the day after U.K.'s vote to exit from the European Union rattled markets, as turmoil in Washington cast doubt on President Donald Trump's pro-growth agenda that had helped to drive stocks to records.

On data front, Japan's economy picked up speed in the first three months of 2017. Gross domestic product beat forecasts and rise 2.2% on an annualized basis from the previous three months, according to preliminary figures released.

Political uncertainty sent the S&P 500 index down 43.64 points, or 1.8%, to 2,357.03. The Dow sank 372.82 points, or 1.8%, to finish at 20,606.93. The Nasdaq Composite Index dropped 158.63 points, or 2.6%, to end at 6,011.24.

The administration is facing scrutiny about whether the president asked the former head of the FBI to drop an investigation, as well as questions about his handling of secret intelligence. The Justice Department named a special counsel to oversee the FBI's investigation of Russia's efforts to influence the 2016 election.

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, May 18 2017. 13:21 IST