Sensex dips over 100 points; WPI inflation at 6.01%

Benchmark indices are once again reeling under selling pressure post the announcement of WPI inflation numbers.

May WPI inflation at 6.01% vs 5.2% m-o-m, highest level since Dec 2013. Core inflation stands at 3.8% in May vs 3.4% in April. May food inflation at 9.5% vs 8.64% in April.

By 12:15, the Sensex was lower by 104 points at 25,124 levels and the Nifty declined 39 points at 7,503.

The main losers on the Sensex at this hour include Axis Bank, L&T, M&M, RIL and Tata Steel.

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Updated at 11:00

Markets have recovered from day’s low and are trading marginally lower supported by buying among IT shares.

By 11:00, the Sensex was lower by 23 points at 25,205 levels and the Nifty declined 9 points at 7,533.

The main gainers on the Sensex are GAIL, TCS, Bajaj Auto, Infosys and Sterlite.

Shares in Tata Consultancy Services gain after the company kept its outlook on first-quarter margins and revenue unchanged on Friday.


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Updated at 10:10

Benchmark indices have extended losses and are trading lower by over 0.5% weighed down by capital goods and financial shares.

By 10:10, the Sensex was lower by 103 points at 25,125 levels and the Nifty declined 43 points at 7,499.

The broader markets are under performing the benchmark indices- BSE Midcap and Smallcap indices have declined by nearly 2%.

The market breadth on BSE remains dismal with 1,457 shares declining and 529 shares advancing.  

Meanwhile, the monsoon is making slow progress across the country, even as millions of farmers eagerly wait for the first showers. The progress of rains is expected to be slow over the next few days and it is expected to spread over central and eastern India only after Tuesday.

On the macro front, the government will announce data on inflation based on the wholesale price index (WPI) for May 2014 at 12:00 noon today.

Foreign portfolio investors (FPIs) bought shares worth a net Rs 1,099.92 crore on Friday, as per provisional data from the stock exchanges.

GLOBAL MARKETS

Asian shares got off on the back foot on Monday, as crude extended gains and tested nine-month highs on fears the insurgency in Iraq could worsen and affect oil exports.

Sunni insurgents seized a mainly ethnic Turkmen city in northwestern Iraq on Sunday, while the United States boosted security for its diplomatic staff in Baghdad said some staff had evacuated the embassy.

Brent rose about 0.6% to $113.20 per barrel, after touching $114.69 on Friday, its highest since September. Brent added more than $4 last week. U.S. crude rose about 0.5 percent to $107.43, approaching Friday's nine-month high of $107.68.

On Wall Street on Friday, stocks edged higher, but ended with modest losses for the week.

MSCI's broadest index of Asia-Pacific shares outside Japan was slightly lower in early trade, moving away from a three-year high hit a week ago.

Japan's Nikkei stock average dipped 0.4%, as the yen crept slightly higher, getting a safe-haven lift from investors' rising risk aversion.

CRUDE

Crude prices rose to nine-month highs in Asian trade today as investors kept a wary eye on the worsening crisis in Iraq, where insurgents were advancing on the capital Baghdad.

US benchmark West Texas Intermediate for July delivery jumped 35 cents to $107.26 a barrel in late-morning trade, while Brent crude for August gained 44 cents to $112.90.

RUPEE

The rupee weakened to 60 to a dollar on Monday, its lowest in more than a month, as strong demand for the greenback from oil marketing companies weighed after global crude prices surged to nine-month highs on Friday.

At 9:34 a.m., the rupee was at 59.9850/99 after hitting 60.00, a level last seen on May 12. The pair had closed at 59.76/77 on Friday.

Traders expect the rupee to weaken further during the session as concerns persisted that an insurgency in Iraq could disrupt oil exports from the second-largest OPEC producer.

SECTORAL INDICES

BSE Power index has slumped by almost 3% followed by counters like Capital Goods, Realty, Metal, Banks, Oil & Gas, Consumer Durables and Auto, all declining between 1-2%. However, BSE IT and TECk have gained by 1%.

MOVERS & SHAKERS

The main losers on the Sensex are Tata Power, L&T, Coal India, M&M, BHEL, Axis Bank, ONGC, SBI and Tata Steel, all falling between 2-3%.

On the gaining side, TCS, Sun Pharma, Bajaj Auto, Infosys and ITC have gained between 1-2%.

Idea Cellular is trading higher by over 1% at Rs 137 in otherwise weak market, after the Reserve Bank of India (RBI) announced that foreign institutional investors (FIIs) can now purchase up to 49% stake in telecom operator. The FII limit in the company was 24% earlier.

Titagarh Wagons is trading higher by 2% at Rs 288 after the company said it has bagged a contract for rehabilitation of 56 coaches (7 rakes) from the Kolkata Metro Railway.

Shares of mid-and small-cap companies continued to remain under pressure on Monday, falling by up to 9% second day in a row on surging oil prices on concerns of supply disruption due to rising violence in Iraq. Investors are worried that high oil prices and a weak rupee could add to inflationary pressures.

Jaiprakash Power, Jaypee Infratech, State Bank of Travancore, GMR Infrastructure, Union Bank of India, JSW Energy from mid-cap and Sterlite Technologies, MTNL, United Bank of India, Patel Engineering, Nava Bharat Ventures and Brigade Enterprises from small-cap index are down more than 5% each.