Key benchmark indices were trading lower in early trade. At 9:23 IST, the barometer index, the S&P BSE Sensex, was down 77.58 points or 0.29% at 26,548.33. The Nifty 50 index was down 33.50 points or 0.41% at 8,136.70.
Investors' sentiment took a hit after the Reserve Bank of India (RBI) governor Raghuram Rajan on Saturday, 18 June 2016, announced that he will not pursue a second term as the RBI chief. Rajan finishes his term on 4 September 2016. He was appointed RBI Governor by the previous UPA government in September 2013 for a three-year term, which can be extended.
The broad market depicted weakness. There were more than two losers against every gainer on BSE. 847 shares fell and 408 shares rose. A total of 54 shares were unchanged. The BSE Mid-Cap index was currently down 0.43%. The BSE Small-Cap index was currently down 0.31%. The decline in both these indices was higher than the Sensex's decline in percentage terms.
In the overseas market, most Asian stocks rose today, 20 June 2016, as rising expectations of Britain voting to remain in the European Union lifted risk sentiment. Three British opinion polls ahead of the EU membership referendum on 23 June 2016 showed the 'Remain' camp recovering some momentum, although the overall picture remained one of an evenly split electorate. US stocks fell on Friday, 17 June 2016, as investors continued to fret over the possibility that the UK may leave the European Union on top of lingering concerns about the Federal Reserve's reluctance to raise interest rates.
The UK government holds a referendum on Thursday, 23 June 2016, on whether the country should remain a member of the European Union (EU). The Organization for Economic Cooperation and Development (OECD) has warned that Britain's leaving the EU -- the so-called Brexit -- could send shocks through global financial markets. The OECD said on 1 June 2016 that a United Kingdom vote to leave the EU would trigger negative economic effects on the UK, other European countries and the rest of the world. Brexit would lead to economic uncertainty and hinder trade growth, with global effects being even stronger if the British withdrawal from the EU triggers volatility in financial markets, the OECD said. By 2030, post-Brexit UK GDP could be over 5% lower than if the country remained in the European Union, the OECD said.
BPCL (down 0.21%) and Indian Oil Corporation (IOCL) (down 0.31%), edged lower. Oil India was up 0.46%. An Indian consortium, led by IOCL, Oil India and Bharat PetroResources (BPRL), a 100% subsidiary of BPCL, signed the definitive agreement to acquire up to 23.9% shares from Russia's Rosneft Oil Company (Rosneft), which is the owner of Vankor and North Vankor Field licences. The acquisition is subject to relevant Board, Government and regulatory approvals and is expected to close by September 2016.
Presently Rosneft Oil Company holds 85% shares while ONGC Videsh Ltd (through its subsidiary) holds 15% shares in JSC Vankorneft. Vankor field, located in East Siberia, is Russia's second largest field by production and accounts for around 4% of Russian production and currently producing oil at a level of approximately 422,000 barrels of oil per day (BOPD). It is the largest of the fields, discovered and commissioned in Russia during the last twenty five years and is located in the North of Eastern Siberia in Turukhansk District of the Krasnoyarsk Territory 142 km away from Igarka town. The recoverable resources of the Vankor field as of 1 January 2016 stood at 361 million tonnes of oil and condensate and 138 bcm of gas. With the closure of the Vankor deal, IndianOiI's equity oil portfolio will go up by 1.6 MMT per annum.
Cement shares fell across the board. ACC (down 0.37%), UltraTech Cement (down 0.49%) and Ambuja Cements (down 0.25%), edged lower.
Grasim Industries was down 0.06%. Grasim has exposure to cement sector through its holding in UltraTech Cement.
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