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Indices turn range bound; IT stocks in demand

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Key benchmarks continued trading with modest losses in mid-morning trade. The Nifty hovered around the 12,250 level. Weakness in other Asian shares and surge in crude oil prices triggered selling in domestic stock market.

At 11:20 IST, the barometer index, the S&P BSE Sensex, was down 111.48 points or 0.27% at 41,515.16. The Nifty 50 index was down 34.75 points or 0.28% at 12,247.45.

The S&P BSE Mid-Cap index was down 0.13%. The S&P BSE Small-Cap index was up 0.4%, outperforming the main stock indices.

The market breadth, indicating the overall health of the market, remained positive. On the BSE, 1166 shares rose and923 shares fell. A total of 144 shares were unchanged. In Nifty 50 index, 13 stocks advanced while 37 stocks declined.

 

Buzzing Index:

IT stocks bucked trend on weak rupee. The Nifty IT index rose 1.65% at 15,968.35. Zensar Technologies (up 3.38%), NIIT Technologies (up 3.45%), HCL Technologies (up 2.31%), TCS (up 1.86%), Hexaware Technologies (up 1.39%), Tech Mahindra (up 1.37%), Wipro (up 1.25%) and MindTree (up 0.94%) advanced.

IT major Infosys rose 1.42%. The company will declare Q3 results on 10 January 2019.

In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 71.6900, compared with its close of 71.3825 during the previous trading session. A weak rupee boosts revenues of IT firms in rupee terms as the sector derives a lion's share of revenue from exports.

Stocks in Spotlight:

RITES rose 1.51% to Rs 305 after the company secured project management consultancy work worth Rs 99.94 crore. The project consists four-laning of national highway in Bangladesh. RITES is a lead partner in the joint venture arrangement and will receive $10.88 million (Rs 77.57 crore) out of the total consultancy fee of $14.01 million (Rs 99.94 crore).

State owned telecom service provider MTNL was locked in an upper circuit of 5% at Rs 9.9 after the media reported that MTNL has started the process to monetize assets worth Rs 23,000 crore. The move aims to turn the debt ridden company into a profitable company.

Shares of JSW Energy traded 1.15% higher at Rs 70.35. JSW Energy on Thursday entered into an agreement with Jaiprakash Power Ventures (JPVL) to restructure the principal outstanding amount of Rs 751.77 crore owed by JPVL.

Crude Oil:

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. In the commodities market, Brent crude for March 2020 settlement was up by $2 a barrel, or 3%, to $68.24 per barrel.

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 leads to a spike in domestic inflation.

Foreign Markets:

Most Asian shares declined amid escalating Middle East tensions. US stock market closed at record highs on the first trading day of 2020 after a move by China's central bank aimed at stimulating the country's economy.

On economic front, the number of people applying for first-time jobless benefits in the week ended 28 December slipped to 222,000. The US IHS Markit manufacturing purchasing managers final index for December slipped to 52.4 below the 52.6 reading notched in November

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First Published: Jan 03 2020 | 11:21 AM IST

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