Key indices edge lower in early trade

Key benchmark indices edged lower in early trade tracking weakness in Asian stocks and overnight decline on Wall Street. At 9:21 IST, the barometer index, the S&P BSE Sensex was down 94.67 points or 0.37% at 25,304.98. The Nifty 50 index was currently down 32.40 points or 0.42% at 7,726.40.

The Reserve Bank of India (RBI) will announce the First Bi-monthly Monetary Policy Statement, 2016-17 at 11:00 IST today, 5 April 2016. Market expectations are that the RBI will cut its benchmark lending rate viz. the repo rate by atleast 25 basis points today, 5 April 2016, with the government sticking to its fiscal deficit target for year 2016-17 in the Union Budget 2016-17 on 29 February 2016. The government's announcement of a reduction in interest rates on small savings schemes for Q1 June 2016 and dovish comments from US Federal Reserve Chairwoman Janet Yellen have reinforced market expectations of a rate cut from the RBI. In a speech in New York on 29 March 2016, Yellen stressed a need for a cautious stance on interest-rate increases in the backdrop of global economic slowdown.

In overseas stock markets, Japanese stocks led decline in Asian markets. In Japan, the Nikkei 225 Average was currently off 1.55%. US stocks closed lower yesterday, 4 April 2016, as pressure from a decline in oil prices mostly offset gains in health care stocks.

Closer home, the market breadth indicating the overall health of the market was weak. On BSE, 605 shares fell and 358 shares rose. A total of 57 shares were unchanged. The BSE Mid-Cap index was currently off 0.23%. The BSE Small-Cap index was currently off 0.24%. The losses for both these indices were lower in percentage terms than those for the Sensex.

Shares of public sector oil marketing companies (PSU OMCs) rose after announcing a hike in petrol and diesel prices. BPCL (up 2.06%), HPCL (up 1.92%) and Indian Oil Corporation (IOCL) (up 1.99%) edged higher. IOCL yesterday, 4 April 2016, announced an increase in the price of petrol and diesel with effect from the midnight of 4/5 April 2016. Petrol price was hiked by Rs 2.19 per litre and diesel price was raised by 98 paise a litre at Delhi (including state levies) with corresponding price revision in other states. After the latest revision, petrol in Delhi costs Rs 61.87 per litre and diesel costs Rs 49.31 a litre.

In the global commodities markets, Brent for June settlement was currently down 14 cents at $37.55 a barrel. The contract had declined 98 cents or 2.53% to settle at $37.69 a barrel during the previous trading session. Decline in crude oil prices could reduce under-recoveries of PSU OMCs on domestic sale of LPG and kerosene at government controlled prices. The government has already decontrolled pricing of petrol and diesel.

Power Grid Corporation of India (PGCIL) rose 0.58% at Rs 139.40 after the company announced that its board at its meeting held on 2 April 2016 approved eight proposals involving an outlay of Rs 3322.60 crore. The announcement was made after market hours yesterday, 4 April 2016.

Adani Enterprises was up 0.37% at Rs 80.75 after the company said that its coal mine project in Australia won mining lease. Welcoming the approval, the company said that the granting of a mining lease helps deliver the company certainty with respect to timelines, while moving to the next phase of the project, subject to the resolution of legal challenges by politically-motivated activists. Adani said it will continue to finalise second-tier approvals with the clear aim of commencing construction in calendar year 2017. In the coming months, Adani and its partners will provide additional detail regarding the next steps for the logistics and labour requirements of the project, it said. The announcement was made after trading hours yesterday, 4 April 2016.

Adani Group initiated the Carmichael coal project in 2010 with plans to develop a coal mine and a rail link with Abbot Point port, but the project soon ran into opposition from environmentalists. In February 2016, Adani Group had secured the approval of the Queensland government for the $16.5 billion Carmichael mine project in the state's Galilee Basin, amid protests from environmental activists in Australia.

Powered by Capital Market - Live News