Market languished in the negative zone in mid-afternoon trade with modest losses. At 14:15 IST, the barometer index, the S&P BSE Sensex was down 226.95 points or 0.75% at 29,899.26. The Nifty 50 index declined 64.75 points or 0.69% at 9,295.15.
Key indices opened the session on a weaker note amid initial volatility on subdued global cues. Indices further extended slide as the day's trade progressed. Weakness in European indices also added to the dull market mood. Profit booking materialised after Nifty scaled record closing high in the previous session.
The Sensex was trading below the psychological 30,000 level after alternately moving above and below that level so far. It had settled above that level during the previous trading session.
Among other indices, the BSE Mid-Cap index fell 1%. The decline in this index was higher than the Sensex's slide in percentage terms. The BSE Small-Cap index lost 0.75%, matching the Sensex's slide in percentage terms.
The broad market depicted weakness. There were more than two losers against every gainer on BSE. 2,009 shares fell and 721 shares rose. A total of 128 shares were unchanged.
Aviation stocks surged amid slump in global crude oil prices during the previous trading session. SpiceJet (up 4.58%), Jet Airways (India) (up 2.41%) and InterGlobe Aviation (up 1.19%) edged higher.
Lower crude oil prices benefit aviation firms as jet fuel prices, which typically constitute about 50% of airlines' operating costs, are directly linked to international crude oil prices.
However, a weakness in rupee against the dollar will raise routine expenses for carriers. A weak rupee impacts aviation sector adversely as almost a third of operational expenses of aviation firms are denominated in dollars. Among the payments made in dollars include, rentals of leased aircraft, maintenance, spare parts and salary paid out to foreign crew.
In the foreign exchange market, the partially convertible rupee was hovering at 64.2975, compared with its close of 64.1775 during the previous trading session.
Oil exploration and production (E&P) stocks declined amid slump in crude oil prices. Oil India (down 2.65%) and Reliance Industries (down 1.38%) edged lower. Cairn India was unchanged at Rs 285.40. Lower crude oil prices could result in lower realizations from crude sales for oil E&P firms.
In global commodities markets, Brent crude oil futures for July settlement were up 39 cents at $48.77 a barrel. The contract had dropped $2.41 a barrel or 4.74% to settle at $48.38 a barrel during previous trading session on concerns of oversupply. Oil prices had slipped, driven by speculation the world's supply glut will take longer to eradicate than markets had forecast.
ONGC fell 2.46%. ONGC Videsh, a 100% subsidiary of ONGC announced that it has encountered exciting result in its well Mariposa-1 which is under drilling in CPO-5 block of Colombia. ONGC Videsh is the operator of the block and holds 70% participating interest and Amerisur Resources holds the remaining 30%. The announcement was made after market hours yesterday, 4 May 2017.
Stocks of public sector oil marketing companies (PSU OMCs) also dropped. HPCL (down 1.36%), BPCL (down 1.01%) and IOCL (down 0.54%) edged lower.
Wockhardt fell 3.34% after the company reported consolidated net loss of Rs 174.72 crore in Q4 March 2017, sharply higher than net loss of Rs 5.38 crore in Q4 March 2016. Total income fell 10.53% to Rs 919.82 crore in Q4 March 2017 over Q4 March 2016. The result was announced after market hours yesterday, 4 May 2017.
Among macro developments, a press release issued by the government after market hours yesterday, 4 May 2017 stated that eight states have passed the State Goods and Services Tax (SGST) Act in their respective State Assembly in less than a month's time. The states include Telangana, Bihar, Rajasthan, Jharkhand, Chhattisgarh, Uttarakhand, Madhya Pradesh and Haryana.
The next GST Council meeting is scheduled to be held at Srinagar, J&K on 18 and 19 May 2017. The central government has already informed that GST will be rolled-out from 1 July 2017.
Overseas, European stocks edged lower as tumbling oil prices weighed on investor sentiment. European Central Bank (ECB) President Mario Draghi reportedly stated yesterday, 4 May 2017 that the European Union is being wrongly held responsible for decisions that belong to individual countries.
Draghi has warned that Europe risks losing some of its status as a global power unless it pursues more economic and political integration.
Asian stocks witnessed a mixed trend. US stocks closed almost flat yesterday, 4 May 2017, as energy stocks put a lid on the broader market amid slide in crude oil prices.
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