Weak oil prices drag markets; Nifty ends below 7,400

Financials were the top losers while oil shares also declined amid weak crude oil prices

Benchmark share indices extended losses for the third straight session dragged by financials while oil shares slipped after global crude oil prices resumed their downward trend.

The S&P BSE Sensex ended down 316 points at 24,223 and the Nifty ended down 94 points at 7,362.

In the broader market, the BSE Midcap and Smallcap indices were down 1.3% -2.2% each. Market breadth was weak with 2084 losers and 578 gainers on the BSE.

"Global crude oil prices have lost their $30 a barrel support. Further, locally there are no positive surprises from the third quarter earnings while in the overseas markets global oil majors have reported weak earnings. Secondly, domestic institutional investors which were buyers have turned sellers on account of redemtion pressures," said Alex Mathews, Head of Research, Geojit BNP Paribas Financial Services.

The rupee breached the 68-mark and was trading 10 paise lower at 68.08 against the dollar at the Interbank Foreign Exchange, on demand from importers and banks. The  weakness in domestic equities also weighed on sentiment.

ECONOMY

Growth in India’s services activity rose at its fastest pace in 19 months in January as demand picked up, a business survey showed today. The Nikkei/Markit Services Purchasing Managers' Index (PMI) surged to 54.3 in January from December's 53.6, marking a seventh month above the 50-level that separates growth from contraction.

SECTORS & STOCKS

In the financial pack, HDFC, HDFC Bank,ICICI Bank, SBI and Axis Bank ended down 1.1%-3.1% each.

Auto stocks ended lower. M&M, Tata Motors, Hero MotoCorp ended down 0.2%-2.8%.

Energy shares eased after global oil prices resumed its downward trend. ONGC, RIL ended down between 1.7%-2.1% each.

Metal shares ended lower after global commodity prices eased. Tata Steel, Vedanta and Hindalco ended down 2-5% each.

Sun Pharma ended marginally higher. The company launched the generic version of Novartis’ anti-leukemia drug Gleevec after receiving US Food and Drugs Administration (FDA)’s approval in December last year.

Lupin ended marginally lower. The company said it has secured the right to sell the generic version of Glumetza following a settlement with Santarus Inc in 2012, which owned the drug then.

Recent approvals for the two new drug applications (NDAs) from the US FDA by Dr Reddy's Laboratories have evoked considerable interest among the analysts over the long term prospects of the company's US sales performance. However, the stock ended down 1.2%.

Coal India ended marginally lower. Coal India is likely to buy back shares worth at least 25 billion rupees ($368 million) from the government, as the finance ministry looks to state firms for cash ahead of the budget, said a media report.

DLF pared early gains to end flat. The company posted 24% rise in its consolidated net profit at Rs 164 crore for the December 2015 quarter against Rs 132 crore in the year-ago period on the back of higher sales and one-time gain from stake sale deal with Singapore’s GIC.

Among other shares, Crompton Greaves slumped 22% after it posted a consolidated net loss of Rs 107 crore for the quarter ended December 31, 2015 compared to a net profit of Rs 274.29 crore for the corresponding quarter in the previous year.

Tata Communications ended down 5.8% after the company reported 91% drop in consolidated net profit for the quarter ended December 2015 at Rs 6.86 crore compared with Rs 175.63 crore in the same quarter last fiscal.

Vakrangee ended 2.8% higher, extending its over 7% gain in past two trading sessions on the BSE, after the company announced that its Corporate Agency has tied up with Tata AIG General Insurance Company, a joint venture between Tata Group and American International Group (AIG).

GLOBAL MARKETS

Asian markets ended lower on Wednesday as rising crude oil weighed on sentiment. Japanese share were the top losers. The benchmark Nikkei ended down 3.2% while China's Shanghai Composite ended marginally lower. Hong Kong shares eased with energy shares leading the decline amid lower crude oil prices. The Hang Seng ended down 2.4% while Straits Times ended down 1.2%

European shares were trading lower after sluggish earnings from major corporates dented sentiment. The CAC-40, DAX and FTSE were down 0.7%-1% each.