Key benchmark indices weakened once again in mid-morning trade after trimming intraday losses. At 11:19 IST, the barometer index, the S&P BSE Sensex was down 190.90 points or 0.71% at 26,829.76. The Nifty 50 index was currently down 50 points or 0.6% at 8,223.05. The Sensex was hovering below the psychologically important 27,000 mark 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.
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 24 cents at $52.75 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, 1,141 shares rose and 947 shares declined. A total of 142 shares were unchanged. The BSE Mid-Cap index was currently up 0.04%. The BSE Small-Cap index was currently up 0.28%. Both these indices outperformed the Sensex.
Shares of oil exploration and production (E&P) gained as crude oil prices rose. Cairn India (up 3.55%), Oil India (up 1.97%), Reliance Industries (RIL) (up 1.76%) and ONGC (up 1.53%) rose. Higher crude oil prices will result in higher realization from crude sales for oil exploration firms.
Shares of public sector oil marketing companies (PSU OMCs) also gained. Indian Oil Corporation (IOCL) (up 0.42%) and HPCL (up 0.47%) rose.
BPCL rose 1.47% after the Reserve Bank of India (RBI) raised the ceiling on investment in the company's shares by foreign institutional investors (FIIs) to 49% of the company's equity from earlier 24%. It may be recalled that BPCL last week got shareholders' nod for raising the ceiling on investment by FIIs in the company's equity.
Shares of power generation and power distribution companies gained. Torrent Power (up 3%), NHPC (up 0.01%), NTPC (up 1.99%), Tata Power Company (up 1.39%), Power Grid Corporation of India (up 0.59%), Reliance Infrastructure (up 0.16%) and Reliance Power (up 0.01%) gained. Adani Power fell 0.65%.
Infosys lost 3.34% after chief operating officer (COO) UB Pravin Rao was quoted by the media as saying that the company would face volatility over the next few quarters, due to weaker spending from sectors such as energy and insurance. Rao, however, added that the company was still on track to meet its full-year constant currency revenue growth guidance of 11.5%-13.5% for the year ending 31 March 2017 (FY 2017), reports suggested. Rao reportedly said that the management expects some short-term quarterly bumps going ahead. In the last couple of weeks, the results from retail in both US and Europe have not been good, Rao reportedly said. Rao also said that the company was facing a slowdown with its enterprise resource planning (ERP) and business process outsourcing (BPO) businesses, adding that the company was working to turn around those businesses, as per reports.
Meanwhile, shares of Infosys turned ex-dividend today, 9 June 2016, for final dividend of Rs 14.25 per share for the year ended 31 March 2016 (FY 2016).
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