A bout of volatility was witnessed as key benchmark indices lost ground once again after trimming losses in morning trade. At 10:16 IST, the barometer index, the S&P BSE Sensex, was off 63.93 points or 0.24% at 26,840.18. The 50-unit CNX Nifty was off 17.70 points or 0.22% at 8,125.90. The market breadth indicating the overall health of the market was positive. On BSE, 1,108 shares rose and 758 shares declined. A total of 75 shares were unchanged. The BSE Mid-Cap index was up 0.09%. The BSE Small-Cap index was up 0.35%. Both these indices outperformed the Sensex.
The sensex lost 116.45 points or 0.43% at the day's low of 26,787.66 in intraday trade, its lowest level since 8 October 2015. The Nifty fell 32.20 points or 0.39% at the day's low of 8,111.40 in intraday trade, its lowest level since 8 October 2015.
In overseas stock markets, stocks in Indonesia and Japan led losses for Asian markets after weak Chinese trade data for September 2015. US stocks eked out small gains yesterday, 12 October 2015, amid caution ahead of the earnings season.
Closer home, the latest data showed acceleration in consumer price inflation in September 2015, mainly due to increase in vegetable prices. Another data showed that a surge in production of two items contributed to more than half of the 6.4% increase in industrial production in August 2015. Inflation based on the consumer price index (CPI) increased to 4.4% in September 2015 from with 3.7% in August 2015. The core CPI inflation rose to 4.1% in September 2015 from 3.9% in August 2015.
Growth in industrial production (IIP) hit its highest level in almost three years on the back a surge in the output of the manufacturing sector. Gems and jewellery and rubber insulated cables contributed to more than half of the 6.4% increase in industrial production in August 2015.
Shares of public sector oil marketing companies (PSU OMCs) edged higher after sharp decline in global crude oil prices yesterday, 12 October 2015. BPCL (up 1.28%), HPCL (up 0.91%) and Indian Oil Corporation (up 0.31%) edged higher.
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Decline in crude oil prices could reduce under-recoveries of PSU OMCs on domestic sale of LPG and kerosene at government controlled prices. However, a weakness in rupee against the dollar will restrict the benefit of falling global crude oil prices to that extent. A weak rupee raises the cost of imports. The government has already decontrolled pricing of petrol and diesel.
In global commodities markets, Brent for November settlement was currently up 38 cents at $50.24 a barrel. The contract had slumped $2.79 a barrel or 5.29% to settle at $49.86 a barrel during the previous trading session. The Brent November contract is to expire on 15 October 2015. Brent for December settlement was currently up 40 cents at $50.65 a barrel.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 64.91, compared with closing of 64.755 during the previous trading session.
Shares of oil exploration and production (E&P) firms edged lower after sharp decline in global crude oil prices yesterday, 12 October 2015. ONGC (down 2.79%), Cairn India (down 0.86%) and Reliance Industries (down 0.17%) declined. Oil India (up 0.17%) gained. Lower crude oil prices will decrease realizations from crude sales for oil exploration firms.
Mahindra & Mahindra (M&M) rose 0.23% at Rs 1,278.50. The stock hit a high of RS 1,280.75 and a low of Rs 1,273.80 so far during the day. The company during market hours today, 13 October 2015, said that it has been assigned BBB- long term corporate credit rating with a stable outlook by Standard & Poor's Ratings Service (S&P). The ratings reflects the company's leading market position in tractor and utility vehicle (UV) segments, strong financial ratios, and financial flexibility arising out of significant investments in group companies. This rating action of S&P is based on M&M's conservative leverage policies, healthy cash flow generation and the market leading position in Indian tractor and UV industries, risk mitigation through presence in various businesses with a pan-India footprint and a good mix of rural and urban customers.
Infosys lost 1.79% at Rs 1,102.45, with the stock extending previous trading session's decline triggered by the company lowering its full year revenue growth guidance in dollar terms at the time of announcement of Q2 September 2015 results. The stock had fallen 3.88% to settle at Rs 1,122.50 yesterday, 12 October 2015.
Infosys now expects its revenue to grow 6.4%-8.4% in dollar terms for the year ending 31 March 2016 (FY 2016). At the time of announcing Q1 June 2015 results, Infosys had forecast revenue growth of 7.2%-9.2% in dollar terms for FY 2016. The revenue growth guidance for FY 2016 has been kept unchanged at 10%-12% in constant currency terms.
Shilpi Cable Technologies rose 0.52% at Rs 68.15 after the company said its board of directors will meet today, 13 October 2015, to consider and approve the preferential allotment of 1.5 crore convertible warrants to Shilpi Cables, a promoter group company at an exercise price of Rs 60 each. The announcement was made after market hours yesterday, 12 October 2015.
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