Key benchmark indices continued to languish in negative zone in early afternoon trade. At 12:15 IST, the barometer index, the S&P BSE Sensex, was down 246.91 points or 0.85% at 28,798.37. The Nifty 50 index was currently down 81.15 points or 0.91% at 8,871.35. The Sensex was currently trading below the psychologically important 29,000 level after falling below that level in early trade. Weakness in global stocks weighed on sentiment on the domestic bourses.
The market breadth indicating the overall health of the market was weak. On BSE, 1,475 shares declined and 921 shares rose. A total of 156 shares were unchanged. The BSE Mid-Cap index was currently down 0.64%. The BSE Small-Cap index was currently down 0.37%. The losses for both these indices were lower than the Sensex's decline in percentage terms.
In overseas stock markets, Asian stocks edged lower after the European Central Bank (ECB) decided not to extend the deadline of its bond-buying program after the conclusion of its monetary policy meeting yesterday, 8 September 2016. Also, reports on earthquake in North Korea possibly due to an explosion from a nuclear test in that nation weighed on sentiment. US stocks closed lower yesterday, 8 September 2016, as the outcome of ECB's latest monetary policy meeting suggested that central banks have little left to spur up demand.
Stocks of oil exploration and production (E&P) firms edged higher as crude oil prices surged during the previous trading session. Cairn India (up 0.35%) and ONGC (up 1.3%) gained. Oil India (down 0.87%) edged lower. Higher crude oil prices would result in higher realization from crude sales for oil exploration firms.
Index heavyweight Reliance Industries was up 0.99% at Rs 1,042.45. The stock hit a high of Rs 1,049.65 and a low of Rs 1,030.20 so far during the day.
Stocks of public-sector oil marketing companies (PSU OMCs) also rose. BPCL (up 0.45%), HPCL (up 0.2%) and Indian Oil Corporation (up 0.1%) edged higher.
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Aviation stocks declined after surge in crude oil prices yesterday, 8 September 2016. SpiceJet (down 3.98%), Jet Airways (India) (down 0.94%) and InterGlobe Aviation (down 0.37%) edged lower. Higher crude oil prices hurt aviation firms as jet fuel prices, which typically constitute about 50% of airlines' operating costs, are directly linked to international crude oil prices.
In the global commodities markets, Brent crude oil futures for November settlement was currently down 42 cents at $49.57 a barrel. The contract had surged $2.01 a barrel or 4.18% to settle at $49.99 a barrel during the previous trading session after data showed a surprisingly huge weekly drop in US crude stock piles.
Index heavyweight and housing finance major HDFC was down 2.64% at Rs 1,399.45. The stock hit a high of Rs 1,437.35 and a low of Rs 1,398 so far during the day.
IDBI Bank rose 4.7% at Rs 79.15 on reports that Asian Development Bank (ADB) has held talks with the government to acquire stake in the state-run bank. According to media reports, multilateral agency ADB has held talks with the government to acquire stake in IDBI Bank as negotiations with World Bank arm International Financial Corporation (IFC) have slowed down. ADB, along with IFC and Commonwealth Development Corporation (CDC) were in the fray to buy into IDBI Bank, where the government is open to cutting its stake below 51%, something it can't do in other state-run lenders, given restrictions imposed by the law, reports suggested. ADB is expected to acquire 10-15% stake in the bank, reports added. The government is looking to reduce its stake in IDBI Bank as part of a strategy to rework its functioning as it is seen to have fallen short of expectations, reports suggested. The Government of India currently holds 73.98% stake in IDBI Bank (as per the shareholding pattern as on 30 June 2016).
Hindustan Composites jumped 14.81% at Rs 1,522.40 after net profit rose 94.79% to Rs 12.35 crore on 41.82% rise in net sales to Rs 51.07 crore in Q1 June 2016 over Q1 June 2015. The result was announced after market hours yesterday, 8 September 2016.
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