Key indices settled with small losses after rangebound trade as caution prevailed in global markets ahead of key global events of elections in the UK and the European Central Bank's monetary policy review. The barometer index, the S&P BSE Sensex shed 47.67 points or 0.15% at 31,223.61, as per the provisional closing data. The Nifty 50 index declined 17.80 points or 0.18% at 9,646.10, as per the provisional closing data.
Indices edged higher in early trade tracking steady Asian stocks. Stocks soon slipped into the red and largely languished in negative zone near the flat line later during the session.
Among other indices, the S&P BSE Mid-Cap index provisionally rose 0.21%. The S&P BSE Small-Cap index provisionally advanced 0.3%. Both these indices outperformed the Sensex.
The breadth, indicating the overall health of the market, turned negative from positive in late trade. On the BSE, 1,351 shares fell and 1,330 shares rose. A total of 175 shares were unchanged.
The total turnover on BSE amounted to Rs 7642.60 crore, higher than turnover of Rs 3517.38 crore registered during the previous trading session.
The Sensex gained 83.23 points or 0.26% at the day's high of 31,354.51 in early trade, its highest level since 6 June 2017. The index fell 77.51 points or 0.24% at the day's low of 31,193.77 in late trade. The Nifty gained 24.80 points or 0.25% at the day's high of 9,688.70 in early trade, its highest level since 6 June 2017. The index fell 22.40 points or 0.23% at the day's low of 9,641.50 in late trade.
IT stocks extended previous session's sharp losses on concerns over pricing pressure. HCL Technologies (down 1.4%), TCS (down 3.57%), Tech Mahindra (down 0.51%) and Wipro (down 0.06%) edged lower.
Infosys dropped 0.59% after the company clarified after market hours yesterday, 7 June 2017, that the news reports on pricing cuts seen by the IT industry being attributed to the Infosys chief operating officer (COO) are incorrect.
His comments have been misrepresented. The comments made in the media interview refer to cost take out efforts by clients towards reducing their program investments in the 'run' side of business, to reinvest them in newer technologies or the 'change' side of business. Cost take outs by clients do not necessarily translate into an impact on vendor pricing.
There are enough levers available to meet the client demand on cost take-outs without necessarily impacting the pricing. Infosys commentary on pricing is no different from what it had shared with the market earlier. Infosys reiterated that it is not seeing anything new on pricing. This has also been clarified in the webcast of the Morgan Stanley India Summit, the company said.
The clarification was issued after a media report quoted Infosys' COO Pravin Rao saying that the company's clients were asking for 20-30% cut in prices for projects.
Deep Industries slumped 10.98% after the company said it has received the show cause notice from ONGC pertaining to certain allegations made in respect of ongoing contracts. The company has sought various documents from ONGC based on which allegations are made. ONGC's response is still awaited on the same.
Deep Industries clarified that it is pioneer company in Indian oil & gas services business for last three decades and maintains highest level of integrity in its business conduct while serving clients across varied services both in public and private space.
The company said it believes that the allegations made in show cause notice are baseless. It is in process of replying to show cause notice and contesting all the allegations made therein. The announcement was made during trading hours today, 8 June 2017.
Overseas, European stocks edged higher as UK voting began and European Central Bank's (ECB) monetary policy takes center stage. Asian stocks were mixed ahead of a number of news events with global implications.
German industrial production growth beat forecasts in April as manufacturing output rose for the fourth straight month, underpinning expectations of robust economic growth in the second quarter. Industrial output in Europe's largest economy increased by 0.8% from March, adjusted for seasonal swings and calendar effects.
The voting for the general elections in the UK began. The ECB will hold its latest meeting later in the day and James Comey, the former director of the Federal Bureau of Investigation, will testify on Capitol Hill.
Among global macro data, China's May exports rose 8.7% from a year earlier, while imports expanded 14.8%, both beating expectations, official data showed. That left the country with a trade surplus of $40.81 billion for the month, the General Administration of Customs said.
Japan's economy grew at a slower pace than initially estimated in the first quarter. The nation's gross domestic product, the broadest measure of economic activity, grew at an annualized pace of 1.0% from the previous three months, according to government data.
In the US, banks and other financial companies led stocks slightly higher yesterday, 7 June 2017, snapping a two-day losing streak for the market.
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