Indices bounce back; IT shares decline

Trading turned volatile as key equity indices bounced back from the day's low in mid-morning trade. At 11:23 IST, the barometer index, the S&P BSE Sensex, was up 28.19 points or 0.08% at 35,172.68. The Nifty 50 index was up 19.85 points or 0.19% at 10,602.35. Gains were capped due to weakness in IT shares.

Among secondary barometers, the BSE Mid-Cap index was up 0.60%. The BSE Small-Cap index was up 0.21%.

The market breadth, indicating the overall health of the market, was positive. On BSE, 1178 shares rose and 1006 shares fell. A total of 128 shares were unchanged.

Most IT shares declined after the rupee edged higher against the dollar. Tech Mahindra (down 3.86%), HCL Technologies (down 3.29%), Infosys (down 3.07%), TCS (down 2.77%), Wipro (down 1.75%), MphasiS (down 1.53%), Oracle Financial Services Software (down 1.3%) and MindTree (down 0.71%), edged lower. Hexaware Technologies (up 0.75%) and Persistent Systems (up 1.31%), edged higher.

In the foreign exchange market, the partially convertible rupee was hovering at 72.075, compared with its close of 72.67 during the previous trading session. Appreciation in rupee dents top line of IT firms as these companies derive most of their revenues in dollar terms.

Oil sector stocks were in demand. Among oil exploration and production companies, ONGC (up 1.34%), Oil India (up 1.62%) and Reliance Industries (up 0.22%), edged higher.

Among public sector oil marketing companies (PSU OMCs), BPCL (up 7.08%), HPCL (up 8.23%) and Indian Oil Corporation (up 6.90%), edged higher.

PSU OMCs jumped after crude oil futures declined. Lower crude oil prices could reduce under-recoveries of public sector oil marketing companies (PSU OMCs) on domestic sale of LPG and kerosene at controlled prices. The government has already freed pricing of petrol and diesel.

In the global commodities markets, Brent for January 2019 settlement was down 22 cents at $65.25 a barrel. The contract fell $4.65 a barrel or 6.63% to settle at $65.47 a barrel during the previous trading session.

India imports majority of its crude requirements and a decline in crude eases concerns on fiscal deficit, inflation and gives more room for the government to boost growth through spending on infrastructure.

Overseas, most Asian shares edged lower as investors worry about slowing global growth with crude oil prices sinking on worries about weakening world demand and oversupply.

US stocks closed mostly lower after a volatile session Tuesday as oil prices tumbled, dragging the energy sector sharply lower, and a resolution of the US-China trade war remained elusive.

On the US data front, the National Federation of Independent Business small-business optimism index declined 0.5 points to a seasonally adjusted 107.4 in October, a four-month low. Further, the US ran a $100 billion deficit in October, wider than the $63 billion deficit recorded in October 2017 as spending rose by double digits and receipts only increased by 7%, according to the Treasury Department.

In Europe, the United Kingdom and European Union agreed on the text for a Brexit divorce deal on Tuesday. Prime Minister Theresa May will present the draft withdrawal agreement to her senior ministers on Wednesday for discussion and then decide on the next steps.

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