Key benchmark indices extended losses in early afternoon trade, with the barometer index, the S&P BSE Sensex falling below the psychological 24,000 mark. At 12:15 IST, Sensex was down 141.53 points or 0.59% at 23,920.51. The 50-unit Nifty 50 index was currently down 36.95 points or 0.51% at 7,272.35. Weakness in Asian stocks weighed on the domestic bourses.
The Sensex fell 155.58 points or 0.64% at the day's low of 23,906.46 in early afternoon trade. The barometer index jumped 289.79 points or 1.2% at the day's high of 24,351.83 at the onset of the trading session, its highest level since 19 January 2016. The Nifty fell 43.65 points or 0.59% at the day's low of 7,265.65 in early afternoon trade. The index rose 89.40 points or 1.22% at the day's high of 7,398.70 at the onset of the trading session.
The market breadth indicating the overall health of the market turned negative from positive in early afternoon trade. On BSE, 1,209 shares declined and 1,107 shares rose. A total of 155 shares were unchanged. The BSE Mid-Cap index was currently off 0.29%. The fall in this index was lower than Sensex's decline in percentage terms. The BSE Small-Cap index was currently up 0.2%, outperforming the Sensex.
In overseas stock markets, modest early gains in Asian markets were wiped out as bearish sentiment took hold in late afternoon trading as oil prices gave up initial gains. In Japan, the Nikkei 225 Average ended 2.43% lower. In Hong Kong, the Hang Seng index was currently off 1.41%. In mainland China, Shanghai Composite was currently off 1.62%. US stocks ended a wild session sharply lower yesterday, 20 January 2016, but trimmed heavier losses scored earlier in the session as a modest bounce off session lows by crude-oil prices provided some relief.
Telecom stocks declined on media reports that the government is proposing to levy a 0.5% Swachh Bharat cess on telecom services as well as on petrol and diesel. Bharti Airtel (down 1.02%), Mahanagar Telephone Nigam (down 0.84%) and Reliance Communications (down 2.34%) edged lower. Tata Teleservices (Maharashtra) rose 1.37%.
According to reports, the government is considering a 0.5% cess on petrol, diesel and telecom services, a 1% cess on accumulated waste produced by mineral generation plants and a 0.5% increase in service tax to fund its pet cleanliness programme viz. Swachh Bharat Abhiyan.
Idea Cellular fell 2.38%. The company is scheduled to announce its Q3 December 2015 result today, 21 January 2016.
Shares of oil exploration and production firms declined as crude oil prices edged lower. ONGC (down 2.39%), Reliance Industries (RIL) (down 2.42%), Cairn India (down 0.54%) and Oil India (down 2.29%) edged lower. Lower crude oil prices would result in lower realization from crude sales for oil exploration firms.
Shares of PSU OMCs edged lower on media reports that the government is proposing to levy a 0.5% Swachh Bharat cess on petrol and diesel. BPCL (down 0.67%), HPCL (down 2.8%) and Indian Oil Corporation (down 0.33%) declined.
Aviation stocks rose as crude oil prices edged lower. SpiceJet (up 2.69%), InterGlobe Aviation (up 0.81%) and Jet Airways (India) (up 0.91%) gained. Lower crude oil prices benefit aviation firms as jet fuel prices, which typically constitute about 50% of airlines' operating costs, are directly linked to international crude oil prices. On the flip side, a weakness in rupee against the dollar will raise routine expenses for carriers. A weak rupee impacts aviation sector adversely as almost a third of operational expenses of aviation firms are denominated in dollars. Among the payments made in dollars include, rentals of leased aircraft, maintenance, spare parts and salary paid out to foreign crew.
Brent for March settlement was currently down 10 cents at $27.78 a barrel. The contract had fallen 88 cents or 3.05% to settle at $27.88 a barrel during the previous trading session.
In the foreign exchange market, the rupee weakened past 68 mark against the dollar. The partially convertible rupee was currently hovering at 68.0525, compared with its close of 67.96 during the previous trading session.
Meanwhile, Reserve Bank of India (RBI) Governor Raghuram Rajan has reportedly said that investors will look at stable emerging markets (EM), including India once the volatility in global market subsides. On the RBI's monetary policy stance next month, Rajan reportedly said that the rest of the world is facing a deflationary environment and that will help India disinflate. The RBI's next monetary policy review is scheduled on 2 February 2016. On the sharp drop in the Indian rupee, Rajan was quoted as saying that the Indian currency has been relatively strong when compared to other EM currencies.
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