The movement for the two key benchmark indices remained confined to a narrow range in early afternoon trade. At 12:15 IST, the barometer index, the S&P BSE Sensex was up 54.42 points or 0.21% at 26,457.38. The Nifty 50 index was currently up 19.55 points or 0.24% at 8,114.25. The broad market depicted strength. There were nearly two gainers against every loser on the BSE. 1,480 shares rose and 772 shares declined. A total of 155 shares were unchanged. The BSE Mid-Cap index was currently up 0.4%. The BSE Small-Cap index was currently up 0.78%. Both these indices outperformed the Sensex.
In overseas stock markets, most Asian stocks edged higher in an indication that markets were stabilizing in the wake of the UK's vote last week to leave the European Union (EU). Chinese stocks witnessed a mixed trend. In mainland China, the Shanghai Composite was currently up 0.36%. In Hong Kong, the Hang Seng index was currently off 0.59%. Trading in US index futures indicated a recovery for US stocks from a recent selloff triggered by the UK's decision to leave the European Union. Trading in US index futures indicated that the Dow Jones Industrial Average could gain 143 points at the opening bell today, 28 June 2016.
US stocks registered heavy losses for the second trading session in a row yesterday, 27 June 2016, as investors continued to dump assets perceived as risky in the wake of the UK's vote last week to leave the European Union. Activity in the US services sector remained subdued in June, according to preliminary data released yesterday, 27 June 2016. In a report, market research group Markit said that its flash services purchasing managers' index (PMI) remained unchanged at 51.3 in June.
Meanwhile, global credit rating agency Standard & Poor's Global Ratings yesterday, 27 June 2016, lowered its long-term foreign and local currency sovereign credit ratings on the United Kingdom to 'AA' from 'AAA' after Britain last week voted to leave the European Union in a historic referendum known as Brexit. S&P said that Brexit will weaken the predictability, stability, and effectiveness of policymaking in the UK and affect its economy, GDP growth, and fiscal and external balances. S&P said that the downgrade also reflects the risks of a marked deterioration of external financing conditions in light of the UK's extremely elevated level of gross external financing requirements. The vote for "remain" in Scotland and Northern Ireland also creates wider constitutional issues for the country as a whole. The outlook on the long-term rating is negative. The negative outlook reflects the risk to economic prospects, fiscal and external performance, and the role of sterling as a reserve currency, as well as risks to the constitutional and economic integrity of the UK if there is another referendum on Scottish independence, S&P said in a statement.
Metal and mining stocks edged higher as copper prices rose in global commodities markets. Jindal Steel & Power (up 2.43%), Hindustan Copper (up 1.77%), Hindustan Zinc (up 1.46%), JSW Steel (up 1.33%), Steel Authority of India (up 0.94%), NMDC (up 0.94%), Vedanta (up 0.61%) and Tata Steel (up 0.39%) edged higher. Hindalco Industries (down 0.21%) and National Aluminium Company (down 0.36%) edged lower.
High Grade Copper for September 2016 delivery was currently up 1.69% at $2.1615 per pound on the COMEX.
IT stocks extended recent losses triggered by concerns that losses for the British pound and euro in the wake of the UK's vote last week to leave the European Union (EU) will adversely impact Indian IT companies' revenue in dollar terms. Wipro (down 0.95%), TCS (down 0.42%), HCL Technologies (down 0.69%), Oracle Financial Services Software (down 0.51%) and Tech Mahindra (down 0.54%) edged lower. According to a research note from a domestic brokerage on the impact of Brexit on Indian IT firms, 10% depreciation each of the pound and the euro against the dollar could shave about 1.5-2.5% off Indian IT companies' revenue in dollar terms and adversely impact EBIT margins by 75-100 basis points. Indian IT companies derive about 25% of their revenue from Europe.
Index heavyweight and software major Infosys was down 0.54% at Rs 1,160. The stock hit a high of Rs 1,173 and a low of Rs 1,156 so far during the day.
Shilpa Medicare rose 2.93% at Rs 499 after the company's board of directors approved the amalgamation of Navya Biologicals (NBPL) with the company. Shilpa Medicare said that the indicative time period for the completion of merger is 7 to 8 months. The total consideration shall be paid by way of share swap of 14 lakh shares of Shilpa Medicare to be issued to the shareholders of NBPL. NBPL, a company incorporated under the Companies Act, is engaged on research and development activities in the field of biologicals. NBPL has specifically been in the development of bio-similars and bioprocess technology platforms. The company reported net profit of Rs 0.77 crore on turnover of Rs 3.80 crore in the year ended 31 March 2016. The announcement was made after market hours yesterday, 27 June 2016.
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