IT, oil exploration stocks in demand

A bout of volatility was witnessed in early afternoon trade as the key benchmark indices regained strength soon after trimming intraday gains. At 12:27 IST, the barometer index, the S&P BSE Sensex, was up 80.63 points or 0.23% at 34,412.31. The Nifty 50 index was up 31.40 points or 0.3% at 10,557.60. Positive Asian stocks boosted sentiment on the domestic bourses.

IT stocks rose as the rupee hit a fresh seven-month low against the US dollar. Shares of oil exploration and production companies rose while state-run oil marketing companies dropped after Brent crude moved near $74 per barrel mark.

Key indices resumed uptrend after taking a one-day pause yesterday, 18 April 2018 on positive Asian stocks. Indices hovered in near day's high in morning trade. Stocks held firm in mid-morning trade.

Stocks had corrected yesterday, 18 April 2018 after rising in past nine consecutive sessions. On that day, the barometer index, the S&P BSE Sensex, fell 63.38 points or 0.18% at 34,331.68 while the Nifty 50 index fell 22.50 points or 0.21% at 10,526.20. The Sensex had jumped 1,375.99 points, or 4.17% in prior nine trading sessions to settle at 34,395.06 on 17 April 2018, from its low of 33,019.07 on 4 April 2018.

Coming back to today's trade, the S&P BSE Mid-Cap index was up 0.43%. The S&P BSE Small-Cap index was up 0.4%. Both these indices outperformed the Sensex.

The market breadth, indicating the overall health of the market, was positive. On the BSE, 1,294 shares rose and 1,102 shares fell. A total of 138 shares were unchanged.

IT stocks rose as the rupee hit a fresh seven-month low against the US dollar after international crude oil prices surged. The partially convertible rupee was hovering at 65.77 versus yesterday's close of 65.66. A weak rupee boosts revenue of IT firms in rupee terms as the sector derives a lion's share of revenue from exports.

HCL Technologies (up 1.83%), Oracle Financial Services Software (up 1.18%), Tech Mahindra (up 1.42%), L&T Infotech (up 0.16%), MindTree (up 2.7%), Hexaware Technologies (up 0.05%) rose. Infosys (up 0.57%) and Wipro (down 0.15%) fell.

TCS gained 1.7% ahead of its Q4 March 2018 results today, 19 April 2018.

Shares of oil exploration and production (E&P) companies rose after Brent crude moved near $74 per barrel mark. Higher crude oil prices will result in higher realization from crude sales for oil exploration firms.

Reliance Industries (up 0.31%), ONGC (up 1.38%) and Oil India (up 2.73%) edged higher.

Shares of the state-run oil marketing companies dropped after Brent crude moved near $74 per barrel mark. Higher crude oil prices could increase under-recoveries of public-sector undertaking 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.

HPCL (down 4.39%), BPCL (down 5.04%) and Indian Oil Corporation (IOCL) (down 3.3%) declined.

In the global commodities markets, Brent for June 2018 settlement was up 35 cents at $73.83 a barrel. The contract spurted $1.90 a barrel, or 2.65% to settle at $73.48 a barrel during the previous trading session on 18 April 2018.

Overseas, Asian stocks rose, building on gains a day earlier, with oil prices at 3-year highs helping to boost sentiment for the region's equities.

In US, the Dow industrials ended lower yesterday, 18 April 2018 as IBM's shares got walloped; however, gains in shares of energy-related firms helped the broader market post modest gains. Wall Street showed a muted reaction to the release of the Beige Book report, which underscored that economic activity remained at a modest to moderate pace in March and early April.

The Fed's Beige Book showed that economic activity remained at a modest to moderate pace, though nine of the 12 regional banks expressed concerns about trade tariffs, centered on the tit-for-tat spat between Beijing and Washington.

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