Broad market depicts strength

Key benchmark indices traded near the flat line in morning trade. At 10:17 IST, the barometer index, the S&P BSE Sensex, was down 14.01 points or 0.06% at 24,811.03. The 50-unit Nifty 50 index was currently off 6.90 points or 0.09% at 7,556.95. The broad market depicted strength. There were more than two gainers against every loser on BSE. 1,448 shares rose and 628 shares fell. A total of 133 shares were unchanged. The BSE Mid-Cap index was currently up 0.36%. The BSE Small-Cap index was currently up 0.55%. Both these indices outperformed the Sensex.

In overseas stock markets, most shares in Asia edged higher as the Chinese yuan stabilized for the third straight day. US stocks eked out small gains yesterday, 11 January 2016, after dipping in and out of negative territory as a deepening rout in oil prices hit the energy sector on the heels of the worst weekly start ever to a new year.

Shares of oil exploration and production companies edged lower as crude oil prices declined sharply. ONGC (down 1.86%), Cairn India (down 1.84%) and Oil India (down 1.49%) edged lower. Fall in crude oil prices would result in lower realizations from crude sales for oil exploration firms.

Index heavyweight Reliance Industries (RIL) was up 0.28% at Rs 1,054.45. The stock hit a high of Rs 1,060.90 and a low of Rs 1,048.55 so far during the day.

Shares of public sector oil marketing companies edged higher as crude oil prices declined. Indian Oil Corporation (up 1.50%), BPCL (up 0.65%) and HPCL (up 0.57%) edged higher. Decline in crude oil prices could reduce under-recoveries of public sector oil marketing companies (PSU OMCs) on domestic sale of LPG and kerosene at government controlled prices. However, a weakness in rupee against the dollar will restrict the benefit of falling global crude oil prices to that extent. A weak rupee raises the cost of imports. The government has already freed pricing of petrol and diesel.

Brent crude oil futures edged lower on a stronger dollar and worries over Chinese demand. Brent for February settlement was currently off 38 cents cents at $31.17 a barrel. The contract lost $2 a barrel or 5.96% to settle at $31.55 a barrel during the previous trading session.

In the foreign exchange market, the partially convertible rupee was currently hovering at 66.87, compared with its close of 66.81 during the previous trading session.

Most capital goods shares edged higher. Bharat Electronics (up 2.36%), ABB India (up 2.30%), Bharat Heavy Electricals (up 1.74%), Siemens (up 1.26%), BEML (up 1.11%), Punj Lloyd (up 0.91%), Jindal Saw (up 0.73%), AIA Engineering (up 0.68%), Lakshmi Machine Works (up 0.62%), Suzlon Energy (up 0.47%), Havells India (up 0.25%), Crompton Greaves (up 0.23%), SKF India (up 0.16%), Pipavav Defence and Offshore Engineering Company (up 0.12%) and Praj Industries (up 0.11%), edged higher. ALSTOM India (down 0.35%), Alstom T&D India (down 0.61%) and Thermax (down 1.09%), edged lower.

L&T was up 1.75% at Rs 1,195.40. The company announced during trading hours today, 12 January 2016, that its construction division has won orders worth Rs 1247 crore in the buildings & factories and power transmission & distribution segments.

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