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PSU OMCs gain after sharp slide in crude oil price

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Last Updated : Jan 10 2017 | 11:47 AM IST

The two key benchmark indices hovered firm in positive terrain in mid-morning trade. At 11:18 IST, the barometer index, the S&P BSE Sensex, was up 119.88 points or 0.45% at 26,846.43. The Nifty 50 index was up 31.15 points or 0.38% at 8,267.20. The BSE Mid-Cap index was up 0.38%, underperforming the Sensex. The BSE Small-Cap index was up 0.59%, outperforming the Sensex.

The market breadth, indicating the overall health of the market was strong. On the BSE, 1,495 shares rose and 863 shares declined. A total of 111 shares were unchanged.

Shares of public sector oil marketing companies (PSU OMCs) edged higher as global crude oil prices registered sharp decline yesterday, 9 January 2017. BPCL (up 2.63%), HPCL (up 2.83%) and Indian Oil Corporation (IOCL) (up 1.69%) advanced. Lower crude oil prices could decrease under-recoveries of PSU OMCs on domestic sale of LPG and kerosene at controlled prices. The government has already freed pricing of petrol and diesel.

In global commodities markets, Brent for March 2017 settlement was up 13 cents at $55.07 a barrel. The contract had tumbled $2.16 a barrel or 3.78% to settle at $54.94 a barrel during previous trading session on fears that record Iraqi crude exports and growing US output could undermine Organization of the Petroleum Exporting Countries' (OPEC) efforts to reduce supply.

Shares of oil exploration & production (E&P) firms also gained. Oil India (up 1.17%), Cairn India (up 0.76%), Reliance Industries (up 0.96%) and ONGC (up 0.83%) edged higher.

Realty stocks were mixed. Godrej Properties (up 1.66%), D B Realty (up 1.31%), Oberoi Realty (up 1.22%), Sobha (up 0.57%) and Housing Development & Infrastructure (up 0.08%) edged higher. Unitech (down 1.08%), DLF (down 0.28%), Indiabulls Real Estate (down 0.31%) and Prestige Estates Projects (down 0.2%) edged lower.

Overseas, Asian stocks were mixed amid lacklustre closing on the Wall Street and sharp slide in oil prices overnight. In mainland China, the Shanghai Composite was down 0.16%. In Hong Kong, the Hang Seng was up 0.51%.

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Among economic data, growth in China's consumer price index (CPI), the main gauge of inflation, increased 2.1% from a year ago in December, slightly down from November's 2.3% rise, the National Bureau of Statistics (NBS) said today, 10 January 2017.

Meanwhile, China's producer price index (PPI), which measures costs for goods at the factory gate, reached a five-year high in December, official data showed today, 10 January 2017. The reading rose 5.5% year on year, the highest reading since September 2011, according to NBS. On a month-to-month basis, it increased 1.6%.

In the US, major stock indices closed mixed yesterday, 9 January 2017, with and utilities lagging, as investors geared up for the start of earnings season and digested falling oil prices. The Nasdaq composite hit a new all-time closing high.

Meanwhile, Atlanta Federal Reserve bank president Dennis Lockhart said yesterday, 9 January 2017 that recovery from the economic crisis is largely done, and officials should now turn to addressing longer-term issues like how to boost productivity. The economy is near full employment, inflation is close to the Fed's 2% goal, and the US appears locked in for steady growth of around 2% annually, Lockhart said.

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First Published: Jan 10 2017 | 11:11 AM IST

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