Key benchmark indices remained weak in early afternoon trade. At 12:19 IST, the barometer index, the S&P BSE Sensex was down 183.39 points or 0.68% at 26,837.27. The Nifty 50 index was currently down 49.80 points or 0.6% at 8,223.25. The Sensex remained below the psychologically important 27,000 mark so far during the day after sliding below that mark in early trade. The market sentiment was affected adversely on worries that the recent gains in crude oil prices could adversely impact India's fiscal deficit situation and increase fuel price inflation as India imports about 80% of its crude requirements. Weakness in Asian stocks also dampened sentiment.
In global commodities markets, crude oil prices firmed up buoyed by a fall in US crude inventories, a weaker dollar and strong demand. Brent for August settlement was currently up 21 cents at $52.72 a barrel. The contract had risen $1.07 a barrel or 2.08% to settle at $52.51 a barrel during the previous trading session.
In overseas markets, most Asian stocks declined as investors weigh risks amid the Federal Reserve's cautious stance about tightening rates. Data showed that China's consumer inflation rose less than forecast in May as pressure from high food prices eased, while producer prices recovered more than forecast. The consumer price index (CPI) rose 2% in May, compared with a 2.3% increase in April. The producer price index (PPI) fell 2.8% in May, easing from a 3.4% drop in April, and rose 0.5% month-on-month. US stocks rose yesterday, 8 June 2016 with Dow Jones Industrial Average rising above 18,000 for the first time since April as a weaker dollar lifted some commodity-related shares.
Closer home, the market breadth indicating the overall health of the market was positive. On BSE, 1,231 shares rose and 1,022 shares declined. A total of 165 shares were unchanged. The BSE Mid-Cap index was currently up 0.04%. The BSE Small-Cap index was currently up 0.39%. Both these indices outperformed the Sensex.
Dr Reddy's Laboratories (DRL) fell 1.9% after reports that the US Consumer Product Safety Commission (US CPSC), a federal regulatory body, has pleaded to the US Department of Justice, seeking civil penalty against the company charging that the drug maker had violated provisions related to child resistant packaging in at least five prescription drugs.
The US CPSC, which is tasked with protecting children and families from risks of injuries or death associated with consumer products, had taken issue with DRL's compliance norms that required special packaging for child resistant blister packs for products sold in the US over several years. As part of its review on 6 June 2016, US CPSC voted 4-1 against DRL for not reporting the risks as per provisions of Consumer Product Safety Act and the Poison Prevention Packaging Act (PPPA), reports added. As part of its probe that kick-started in 2012, the US CPSC asserted that from 2008 to 2012, DRL sold prescription drugs having unit dose packaging that failed to comply with the US CPSC's special child resistant packaging regulations and also failed to issue general certificates of conformance, reports informed.
Of the global sales of $2.33 billion for financial year ended 31 March 2016, DRL drew $1.16 billion from its North American operations, of which the US accounted for the lion's share, as per reports. Meanwhile, DRL firmly disagreed with the US CPSC's allegations adding that the company's US subsidiary has reaffirmed its commitment to full cooperation with the US government and defended itself against allegations that it failed to comply with applicable special packaging and reporting requirements, reports suggested. DRL believes that it has complied with all applicable requirements of the Consumer Product Safety Act, including applicable packaging and reporting requirements, reports further informed.
Realty stocks rose. DLF (up 0.33%), D B Realty (up 0.51%), Sobha (up 0.33%), Unitech (up 0.52%), NBCC (up 0.08%), Housing Development & Infrastructure (HDIL) (up 1.03%), and Oberoi Realty (up 1.59%) edged higher. Indiabulls Real Estate (down 0.3%) and Godrej Properties (down 0.06%) declined.
Metal & mining stocks gained as copper prices rose in global commodity markets. JSW Steel (up 0.68%), Bhushan Steel (up 0.13%), Hindustan Copper (up 11.47%), Vedanta (up 3.18%), Hindalco Industries (up 2.29%), Hindustan Zinc (up 2.59%), Jindal Steel & Power (up 0.62%), Tata Steel (up 1.08%), Steel Authority of India (Sail) (up 6.43%), National Aluminum Company (up 2.52%) and NMDC (up 0.94%) gained.
High Grade Copper for July 2016 delivery was currently up 0.7% at $2.076 per pound on the COMEX.
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