Indices came off day's low; PSU OMCs tumble

Key indices came off day's low in morning trade with the Nifty regaining 12,250 level. Higher crude oil prices dented market sentiment. At 10:23 IST, the barometer index, the S&P BSE Sensex, was down 66.06 points or 0.16% at 41,560.58. The Nifty 50 index was down 23.2 points or 0.19% at 12,259.

The S&P BSE Mid-Cap index was up 0.09%. The S&P BSE Small-Cap index was up 0.46%. Both these indices outperformed the Sensex.

The market breadth, indicating the overall health of the market, was positive. On the BSE, 1134 shares rose and752 shares fell. A total of 125 shares were unchanged. In Nifty 50 index, 17 stocks advanced while 33 stocks declined.

Brent crude futures spurted on Friday after a US air strike killed key Iranian and Iraqi military personnel, raising concerns that escalating Middle East tensions may disrupt oil supplies. In the commodities market, Brent crude for March 2020 settlement was up by $2 a barrel, or 3%, to $68.24 per barrel.

India is heavily dependent on oil imports for satisfying its domestic demand. A high crude price directly maps into a high trade deficit and in turn a high current account deficit (CAD). Higher crude prices also leads to a spike in domestic inflation.

Buzzing Index:

Shares of three state-owned oil marketing companies declined amid firmness in crude oil prices. Bharat Petroleum Corporation (down 2.09%), Hindustan Petroleum Corporation (down 1.87%) and Indian Oil Corporation (down 0.12%) tumbled.

Higher crude oil prices could increase 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.

Meanwhile, crude oil explorers, ONGC (up 2.34%) and Oil India (up 1.27%), advanced. Higher crude oil prices would result in increase in realizations from crude sales for oil exploration firms.

Stocks in Spotlight:

IIFL Securities was locked in an upper circuit of 5% at Rs 47.15 after a well-known investor Rakesh Jhunjhunwala bought 27.85 lakh shares of IIFL Securities on Thursday at an average price of Rs 42.83 per share, according to BSE bulk deal data. The total value of the purchase is about Rs 12 crore.

NMDC fell 1.3% to Rs 129.5. The state-run firm hiked prices of iron ore and iron ore products. Prices of lump ore were hiked (65.53, 6-40mm) to Rs 2800 per ton from Rs 2600 per ton set in November 2019. Prices of fines were hiked to Rs 2,560 per ton from Rs 2,360 per ton.

TVS Motor Company extended its losing streak to second session post dismal December sales. TVS Motor Company's total sales tumbled 14.67% YoY to 2,31,571 units in December 2019. Domestic sales slumped 25.09% to 1,57,244 units in December 2019 from 2,09,906 units in December 2018.

Shares of TVS Motor Company were trading 1.5% lower at Rs 451.95.

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