Shares declined further in mid-afternoon trade. The Nifty slipped below its 50 days simple moving average placed at 12,013.27. Sentiment was hit by Middle East tensions, rising crude oil prices and the rupee slipping below the 72-mark.
At 14:29 IST, the barometer index, the S&P BSE Sensex tumbled 797.07 points or 1.92% at 40,667.54. The Nifty 50 index was down 239 points or 1.95% at 11,987.65.
Selling was wide spread. The S&P BSE Mid-Cap index was down 2.34% while the S&P BSE Small-Cap index was down 2.12%. Both these indices underperformed the BSE Sensex.
The market breadth was titled in the favour of bears. On the BSE, 493 shares rose and 1931 shares fell. A total of 181 shares were unchanged. In Nifty 50 index, 2 stocks advanced while 48 stocks declined.
Stocks in Spotlight:
Future Retail slipped 0.46% to Rs 333. Amazon India reportedly entered into long-term business agreements with Future Group for expanding the reach of the latter's retail stores and consumer brands through its online marketplace. The development comes after Amazon had agreed to buy 49% stake in Future Coupons that in turn holds stake in Future Retail (FRL) last year.
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Tata Motors fell 1.94% to Rs 187.35. Jaguar Land Rover (JLR) total December U.S. sales reached 13,801 units, slightly down from December 2018. For the calendar year, Jaguar Land Rover achieved 125,787 units, up 3% compared to the previous record of 122,626 units in 2018 and establishing a new all-time U.S. sales record for the combined brands.
Bharat Forge, which manufactures class 8 trucks, shed 0.11% to Rs 486. Preliminary North America Class 8 net orders in December 2019 were 20,000 units, up 14% from November and down just 6.5% from year-ago December, as the industry transitions to much easier year-over-year comparisons.
Numbers to Track:
Market players are fleeing riskier assets like equities in favor of safer alternatives like gold and bonds after a U.S. airstrike last week killed Iran's top military commander, Qasem Soleimani, in Iraq. The attack has heightened already-volatile relations between Washington and Tehran.
MCX Gold futures for 5 February 2019 settlement advanced 1.96% to Rs 40,897.
The yield on 10-year benchmark federal paper fell to 6.554% at 14:16 IST compared with 6.510% in the previous trading session.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was trading at 72.05, compared with its previous closing low of 71.80.
In the commodities market, Brent crude for March 2020 settlement was up $1.50 a barrel, or 2.18% at $70.10 per barrel. The contract has hit its day high at Rs 70.72, its highest intraday level since 28 May 2019.
The contract rose $2.35 or 3.5% to settle at $68.60 a barrel on Friday, 3 January 2020.
Brent crude futures spurted on Friday after a US air strike killed key Iranian and Iraqi military personnel, raising concerns that escalating Middle East tensions may disrupt oil supplies.
India is heavily dependent on oil imports for satisfying its domestic demand. A high crude price directly maps into a high trade deficit and in turn a high current account deficit (CAD). Higher crude prices also lead to a spike in domestic inflation.
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