Key equity benchmarks declined on Monday, following a surge in global crude oil prices after attacks on Saudi Arabia's oil facilities. The barometer index, the S&P BSE Sensex, fell 261.68 points or 0.7% to 37,123.31, as per the provisional closing data. The Nifty 50 index fell 81.45 points or 0.74% to 10,994.45, as per the provisional closing data.
The 50-unit Nifty opened below 11,000 mark and hit an intraday low of 10,968 in afternoon trade. Later the index trimmed losses and flirted with 11,000 mark but failed to close above that level.
The market breadth was positive. On the BSE, 1367 shares rose and 1152 shares fell. A total of 177 shares remain unchanged. The S&P BSE Small-Cap index rose 0.64%. The S&P BSE Mid-Cap index fell 0.27%.
Finance Minister Nirmala Sitharaman on Saturday, 14 September 2019 announced a fresh set of relief measures to boost exports and housing sector. The steps failed to cheer investors amid worries of soaring crude oil prices. India is heavily dependent on oil imports for satisfying its domestic demand. A high crude price directly maps into a high trade deficit and in turn a high current account deficit (CAD). At the same time, being an important input for the aggregate economy, a crude price shock also leads to a spike in domestic inflation.
In the commodities market, Brent crude for November 2019 settlement was up $5.34 at $65.56 a barrel, following drone attack on Saudi Arabia's oil facilities forcing the kingdom to cut its oil output by half. The reported strike by 10 drones at Saudi Aramco's Abqaiq and Khurais oil facilities have disrupted more than half of Saudi Arabia's oil capacity or 5.7 million barrels per day (mbpd).
On the macro front, India's wholesale inflation remained at 1.08% in August, the same level as the previous month, government data showed on Monday.
India's merchandise exports declined 6% to US$ 26.13 billion in August 2019 over a year ago. Meanwhile, merchandise imports dipped 13.4% to US$ 39.58 billion. The trade deficit narrowed 24.9% to US$ 13.45 billion in August 2019 from US$ 17.39 billion in August 2018.
India's services exports increased 8.7% to US$ 19.08 billion in July 2019 over July 2018. Meanwhile, India's services imports jumped 18.2% to US$ 12.83 billion in July 2019. India's services trade surplus declined 6.7% to US$ 6.26 billion in July 2019 from US$ 6.70 billion in July 2018.
Among index pivotals, HDFC (down 1.85%), Reliance Industries (down 1.24%) and HDFC Bank (down 0.51%) declined.
Titan Company (up 2.23%), ONGC (up 1.51%), Britannia Industries (up 1.5%) and Coal India (up 1.29%) were top gainers for the day.
BPCL (down 6.94%), Mahindra & Mahindra (down 2.59%), UPL (down 2.39%) and State Bank of India (down 2.4%) declined.
HEG hit an upper-circuit of 20% at Rs 1,418.70. Shares of HEG surged 39.05% in four trading sessions to its current market price of Rs 1,418.70, from a recent closing low of Rs 1,020.25 on 9 September 2019.
Graphite India also hit an upper-circuit of 20% at Rs 374. Shares of Graphite India soared 40.41% in eight trading sessions to its current market price of Rs 374, from a recent closing low of Rs 266.35 on 3 September 2019.
Auto stocks witnessed heavy selling. Hero MotoCorp (down 1.81%), Ashok Leyland (down 1.58%), Tata Motors (down 1.35%), Maruti Suzuki India (down 0.93%), TVS Motors Company (down 0.81%), Bajaj Auto (down 0.78%) and Eicher Motors (down 0.27%) tumbled. The S&P BSE Auto was down 0.85% at 16,400.65.
Auto major Mahindra & Mahindra (M&M) was down 2.54% after the company announced 'no production days'. The company announced 8-14 days of no production in various plants of the company in the automotive sector. No production days would be observed so as to align company's production with its sales requirement.
Shares of state-run oil marketing companies tumbled. BPCL (down 7.1%), HPCL (down 5.65%) and Indian Oil Corporation (down 0.73%) declined.
Higher crude oil prices could increase under-recoveries of public sector oil marketing companies (PSU OMCs) on domestic sale of LPG and kerosene at controlled prices. The government has already freed pricing of petrol and diesel.
Aviation stocks also witnessed selling pressure on the worries that surge in crude oil prices will lead to a hike in jet fuel prices. SpiceJet (down 4.03%) and Interglobe Aviation (down 2.73%) slumped.
Shares of Indiabulls Housing Finance was down 1.91%. The Delhi High Court in a civil suit filed by Indiabulls Housing Finance passed an order restraining/ injuncting Subramanian Swamy, Member of Rajya Sabha, and others from publishing, disseminating/ uploading in any manner on their website, messenger application, social media including Facebook, Twitter and WhatsApp or any other platform operated and controlled by them, in respect of the allegation against Indiabulls Housing Finance which are false, offending, defamatory as tweeted by Swamy and mentioned in the suit. The Court has also directed Twitter, Facebook, WhatsApp etc. to remove / take down and/or expunge the offending false messages from their portals within two weeks. The announcement was made after market hours on Friday, 13 September 2019.
J. Kumar Infraprojects announced that it has won an order to design and construct elevated viaducts and two elevated stations viz Gowniwada and Gaimukh from Mumbai Metro Rail Project of MMRDA. The order is worth Rs 342.13 crore. The stock was trading 0.42% higher at Rs 132.5.
Info Edge (India) rose 2.28% to Rs 1941 after the company said its arm will invest about Rs 4 crore in ShoeKonnect, operated by Bizcrum Infotech. ShoeKonnect is building India's most trusted B2B E-commerce platform primarily focused on fashion and lifestyle vertical solving the problem of discovery, payments and logistics by bridging the gap between suppliers and retailers in the largely unorganized $80bn industry.
Goa Carbon was locked in an upper circuit of 10% at Rs 353.65 after the Supreme Court dismissed writ petitions requiring 90% scrubbing efficiency as a pre-requisite for allocation of 1.4 million MT quota of imported raw petroleum coke (RPC) to all the calciners. The petitioners had suggested 90% scrubbing efficiency to control Sulphur Dioxide (S02) emission is a pre-requisite for allocation of 1.4 million MT quota of imported raw petroleum coke (RPC) to all the calciners. The Supreme Court (SC) said that it found no merit in the prayers and it dismissed all applications. The apex court allowed Central Pollution Control Board and the Ministry of Environment and Forest to finalize the standards and place it before the Court within six months from 13 September 2019. Accordingly, Goa Carbon's position in terms of allocation of the imported RPC quota stands the same. In July 2018, SC ordered a ban on import and use of petcoke as fuel, exempting only a few industries such as cement, lime kiln, calcium carbide and gasification. Later in October 2018, the government permitted imports of certain quantity of pet coke, used for fuel purpose, for anode making by the aluminium industry. It also allowed imports of 1.4 MT per annum pet coke for producing calcined pet coke by the Calcined Pet Coke manufacturing units on actual user condition.
Overseas, European markets were trading lower while Asian markets closed on a mixed note as oil prices surged following drone attacks over the weekend that hit major oil production facilities in Saudi Arabia. Japanese market was shut for a public holiday.
A cut in the reserve requirement ratio for banks by the People's Bank of China (PBOC) went into effect on Monday. The PBOC said in early September that its reserve requirement ratio would be cut by 50 basis points and it would further reduce that ratio by 100 basis points for some qualified banks. That is set to release 800 billion yuan ($113 billion) in liquidity into the economy.
US stocks ended mixed on Friday as a drop in Apple stock countered cooling US-China trade tensions. Tariff-vulnerable industrials helped keep the blue-chip Dow in positive territory, which has now gained in eight straight sessions, its longest winning streak since May 2018.
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