Key benchmark indices extended initial losses and hit fresh intraday low in morning trade. At 10:19 IST, the barometer index, the S&P BSE Sensex was down 168.01 points or 0.62% at 26,852.65. The Nifty 50 index was currently down 45.35 points or 0.55% at 8,227.70. The Sensex was hovering below the psychologically important 27,000 mark after sliding below that mark in early trade. The market sentiment was affected adversely on worries that the recent gains in crude oil prices could adversely impact India's fiscal deficit situation and increase fuel price inflation as India imports about 80% of its crude requirements.
The Sensex dropped 211.57 points or 0.78% at the day's low of 26,809.09 in morning trade, its lowest level since 6 June 2016. The index fell 25.75 points or 0.09% at the day's high of 26,994.91 at the onset of the trading session. The Nifty fell 57.10 points or 0.69% at the day's low of 8,215.95 in morning trade, its lowest level since 6 June 2016. The index rose 0.3 points at the day's high of 8,273.35 at the onset of the trading session.
In global commodities markets, crude oil prices firmed up buoyed by a fall in US crude inventories, a weaker dollar and strong demand. Brent for August settlement was currently up 23 cents at $52.74 a barrel. The contract had risen $1.07 a barrel or 2.08% to settle at $52.51 a barrel during the previous trading session.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 66.5825, compared with closing of 66.65 during the previous trading session.
In overseas markets, Asian stocks were mixed. China's consumer inflation rose less than forecast in May as pressure from high food prices eased, while producer prices recovered more than forecast. The consumer price index (CPI) rose 2.0% in May, compared with a 2.3% increase in April. The producer price index (PPI) fell 2.8% in May, easing from a 3.4% drop in April, and rose 0.5% month-on-month. US stocks rose yesterday, 8 June 2016 with Dow Jones Industrial Average rising above 18,000 for the first time since April as a weaker dollar lifted some commodity-related shares. However, firmness in rupee against the dollar will reduce the impact of higher oil prices to that extent. A firm rupee will reduce cost of crude oil imports.
Closer home, the market breadth indicating the overall health of the market was positive. On BSE, 944 shares rose and 910 shares declined. A total of 110 shares were unchanged. The BSE Mid-Cap index was currently up 0.04%. The BSE Small-Cap index was currently up 0.05%. Both these indices outperformed the Sensex.
IT stocks declined on firm rupee. TCS (down 0.27%) and Tech Mahindra (down 0.44%) dropped. A firm rupee adversely affects operating profit margins of IT firms as the sector derives a lion's share of revenue from exports.
Index heavyweight Infosys shed 2.63% as the sock turned ex-dividend today, 9 June 2016 for final dividend of Rs 14.25 per share for the year ended 31 March 2016 (FY 2016).
Wipro fell 0.15%. The company announced a partnership with Mountain View based Authentise Inc, a leading provider of 3D printing technologies and consulting services. This strategic partnership between Wipro and Authentise will enable adoption of additive manufacturing among the global 2,000 companies, Wipro said in a statement. The announcement was made after market hours yesterday, 8 June 2016.
HCL Technologies rose 0.62% after the company announced that it has signed partnerships with two leading automotive solution providers to expand its offerings for the fast-growing smart vehicle ecosystem. Working to enhance HCL's existing Smart Mobility and Vehicle Engineering Services, alliances with Movimento and Rightware will bring invaluable services to HCL's clients, the company said in a statement.
Movimento is a leading provider of over-the-air (OTA) update solutions for automotive solution providers. The partnership between Movimento and HCL will offer automotive lifecycle management, updates and support for on-and off-board software, the company said. The company's partnership with Rightware, a leader in advanced user interface (UI) technology for automotive applications, will enable HCL to help automotive solution providers and Tier-1 manufacturers with all aspects of advanced UI creation, including design, development, systems integration, deployment and support, HCL Technologies said in a statement. The announcement was made after market hours yesterday, 8 June 2016.
Telecom stocks gained. Bharti Airtel (up 0.41%), Tata Teleservices (Maharashtra) (up 0.48%) and Reliance Communications (up 0.3%) gained. Idea Cellular fell 0.1%.
Shares of Bharti Infratel rose 0.45%. Bharti Infratel is a provider of tower and related infrastructure and is a unit of Bharti Airtel.
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