BSE Sensex and Nifty gave up early gains today amid continued concern over the impact of rising oil prices on Indian economy. Rupee too gave up early gains as Brent crude oil prices inched near 9-month highs.
Sanjay Sinha, founder of Citrus Advisors, said the rupee and crude prices levels are crucial for Indian stock markets. If crude oil prices rise above $120 and rupee falls below 62.50 per dollar, Indian stock markets could see more downsides, he added.
In today's trade, Brent crude prices were higher near 9-month highs at $115 per barrel while rupee traded at 60.19 to a dollar vs its previous close of 60.18.
Shares of ITC were down over 3 per cent after Health Minister Harsh Vardhan sought a steep uniform hike of Rs 3.5 per cigarette to make their cost prohibitive and discourage consumption.
IT stocks fell today on profit-taking after outperforming in the previous two sessions. Infosys and HCL Tech fell over 1 per cent.
Among the Nifty gainers, Hero MotoCorp rose over 2 per cent while ONGC rose over 1 per cent. M&M, which fell nearly 3 per cent on Friday, rose over 1 per cent.
Elsewhere, some buying action was seen in rail infra stocks such as Simplex Casting, Texmaco, BEML and Titagarh Wagons which were up 1-4 per cent. The government announced steep train fare and freight hikes on Friday after market hours.
Deven Choksey, MD of KR Choksey Securities, said, the rail fare hike will be taken positively by the markets as it can help lower the fiscal deficit and it also signals the reform process of the government.
Sanjay Sinha of Citrus Advisors, said the rail fare hike is a "positive move. It signals that the government is committed to reduce subsidy. However, the fare and freight hike could have some inflationary impact."
Asian stocks rose today as upbeat news from China's factory sector and fresh highs on Wall Street fueled appetite for riskier assets, while crude oil held near nine-month highs as fighting in Iraq intensified.
MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.7 per cent. Tokyo's Nikkei rose 0.4 per cent, shaking off early weakness.
The June HSBC/Markit Flash China PMI showed China's factory sector activity expanded for the first time in six months, offering new signs the economy is stabilising thanks to Beijing's measures to shore up growth.
At 10:36 a.m., Nifty was down 30 points at 7,469 while Sensex fell 80 points at 24,980. (With Agency Inputs)
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