Nifty, Sensex Fall Amid Iraq Concerns, ONGC Slumps
BSE Sensex and Nifty were lower in noon trade today weighed down by losses in oil & gas shares. The rupee also pared some its early gains.
Concerns over rising oil prices amid the worsening situation in Iraq also weighed on Indian markets. Dr.Tirthankar Patnaik, director & strategist of institutional research at Religare Capital Markets, said the global situation is likely to be an overhang on the Indian markets. "The macro situation in India is on the mend and things are likely to improve as we go along. But global cues are negative in the near term and as we see the situation in Iraq is turning for the worse. A price hike in crude leads to significant sensitivity to currency as India imports nearly 80 per cent of its crude requirement," Mr Patnaik said.
Brent crude rose past $114 a barrel to a nine-month high as investors worried about exports from Iraq.
Mr Patnaik expects rupee to trade in 58-62 range against the dollar. The rupee was trading at 59.97 against the dollar at its day's high vs yesterday's close of 60.39.
Gaurang Shah, assistant vice president at Geojit BNP Paribas Financial Services, said he does not see a big downside for the markets. Foreign and domestic investors are buying on dips, he added. Technical analyst Sarvendra Srivastava says 7,474 is a crucial support level for the Nifty.
Strong selling pressure in upstream oil & gas stocks was seen after a news report said the government could allow higher prices only on incremental gas output. ONGC fell 6.7 per cent while Oil India was down close t 6 per cent. Reliance Industries declined over 2 per cent.
Shares of oil marketing companies also fell on concerns over higher crude prices. BPCL, IOC and HPCL fell nearly 3 per cent each.
Some buying was seen in IT stocks on optimism over the US economy after Federal Reserve's positive assessment. The BSE IT index was up nearly 1 per cent with Infosys, TCS and Wipro rising between 1 per cent and 1.6 per cent.
Elsewhere, rail stocks were up after new Railway Minister Sadananda Gowda said the ministry is in discussions with commerce ministry over liberalising foreign direct investment norms. Titagarh Wagons, Kalindee Rail Nirman and Texmaco rose between 2-4 per cent.
At 1 p.m., the Sensex was down 94 points at 25,151 while Nifty fell 30 points to 7,528.
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