A range bound movement was witnessed as key benchmark indices languished in negative zone in morning trade. At 10:16 IST, the barometer index, the S&P BSE Sensex, was down 34.84 points or 0.13% at 26,362.87. The Nifty 50 index was currently down 9.30 points or 0.11% at 8,079.30. The broad market depicted strength. There were more than three gainers against every loser on BSE. 1,373 shares rose and 452 shares declined. A total of 109 shares were unchanged. The BSE Mid-Cap index was currently up 0.44%. The BSE Small-Cap index was currently up 1%. Both these indices outperformed the Sensex.
The Sensex lost 98.84 points or 0.37% at the day's low of 26,298.87 in morning trade. The barometer index rose 41.13 points or 0.15% at the day's high of 26,438.84 in early trade, its highest level since 23 June 2016. The Nifty index lost 49.25 points or 0.6% at the day's low of 8,039.35 in morning trade. The index rose 12.15 points or 0.15% at the day's high of 8,100.75 in early trade, its highest level since 23 June 2016.
In overseas stock markets, Asian stocks extended losses registered during the previous trading session triggered by the UK voting to leave the European Union (EU) in a referendum on 23 June 2016 dubbed "Brexit". Investors fear that Britain's exit from the EU could trigger slowdown in UK and European economies. Investors fear that Brexit could stoke the anti-establishment mood in Europe and even talk of disintegration of the union. Japanese stocks bucked the weak trend in Asian markets after warnings from Japanese officials that they may intervene in currency markets to stabilize the yen. The Nikkei 225 Average was currently up 1.75%. The safe-haven yen surged against the dollar on 24 June 2016 after the UK voted to leave the European Union in a referendum on 23 June 2016. A stronger yen hurts the competitiveness of Japanese exporters.
A statement from the European Commission after a meeting at Brussels, Belgium between Martin Schulz, President of the European Parliament, Donald Tusk, President of the European Council and Mark Rutte, Holder of the Presidency of the Council of the European Union (EU) on 24 June 2016 stated that the union of the remaining 27 member states of the EU will continue after British people voted in favour of United Kingdom leaving the EU. The EU stands ready to launch negotiations swiftly with the UK regarding the terms and conditions of UK's withdrawal from the EU. The statement further mentioned that the EU now expects the UK government to give effect to this decision of the British people as soon as possible. Any delay would unnecessarily prolong uncertainty. The EU hopes that the UK becomes a close partner of the EU in the future.
The Governor of UK's central bank Bank of England Mark Carney said in a statement on 24 June 2016 that there will be a period of uncertainty and adjustment after people of the UK voted for the UK to leave the European Union. It will take some time for the UK to establish new relationships with Europe and the rest of the world. Some market and economic volatility can be expected as this process unfolds. Carney said that the Bank of England stands ready to provide more than 250b billion of additional funds through its normal facilities to support the functioning of markets. The Bank of England also stands ready to provide substantial liquidity in foreign currency, if required. A few months ago, the Bank of England judged that the risks around the referendum were the most significant, near-term domestic risks to financial stability. To mitigate them, the Bank of England has put in place extensive contingency plans, Carney said.
US stocks plunged during the previous trading session on Friday, 24 June 2016, after UK citizens voted to end the country's membership in the European Uniona historic rejection of Europe's political order. The US Federal Reserve said in a statement on 24 June 2016 that it is carefully monitoring developments in global financial markets, in cooperation with other central banks, following the results of the UK referendum on membership in the European Union. The Federal Reserve is prepared to provide dollar liquidity through its existing swap lines with central banks, as necessary, to address pressures in global funding markets, which could have adverse implications for the US economy.
IT stocks extended losses registered during the previous trading session triggered by the UK voting to leave in the European Union in a referendum. TCS (down 2.5%), Wipro (down 0.93%), Tech Mahindra (down 0.98%), Persistent Systems (down 0.12%), HCL Technologies (down 0.96%) and Oracle Financial Services Software (down 0.82%) edged lower. The UK is the second biggest IT outsourcing market after the United States.
Index heavyweight and software major Infosys was off 1.55% at Rs 1,176. The stock hit a high of Rs 1,179 and a low of Rs 1,173.50 so far during the day.
Cement stocks edged higher on renewed buying. ACC (up 1.85%), Ambuja Cements (up 1.29%), UltraTech Cement (up 1.18%) and Shree Cement (up 1.21%) rose.
Grasim Industries was up 1.14%. Grasim has exposure to cement sector through its holding in UltraTech Cement.
L&T was up 0.71% at Rs 1,443.75 after the company said its construction division has secured orders worth Rs 2416 crore across various business segments in this month so far. L&T said that the building and factories division won orders worth Rs 1165 crore, power transmission and distribution business bagged orders worth Rs 1120 crore in the domestic and international markets and its smart world and communication business won orders worth Rs 131 crore. The announcement was made during market hours today, 27 June 2016.
Aban Offshore rose 3.49% at Rs 206.25 after the company said that its step down subsidiary won a contract from ONGC for the deployment of the drillship Aban Abraham for a firm period of 2 years. The expected revenue from this deployment is estimated at $87 million (equivalent to Rs 592 crore). The deployment is expected to commence during the fourth quarter of calendar year 2016. The announcement was made after market hours on Friday, 24 June 2016.
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