News Column

Sensex rules weaker as gas price, Iraq crisis dent market

June 28, 2014


Mumbai: The S&P BSE benchmark Sensex failed to maintain its initial gains and ended largely flat this week as the market reacted sharply to the Centre's move to defer decision on revision of natural gas prices for three months as concerns over weak monsoon weighed on bourses.

The 30-share index fell for the third consecutive week, slipping six points over last Friday to end at 25,099.92 on selling pressure.

The market traded in a range ahead of the Budget next month amid mounting concerns about below normal monsoon, which is critical for agriculture, equity dealers said.

"Geo-political issues (mainly related to conflict in oil-rich Iraq) also kept the sentiments weak," said Dipen Shah, Head of Private Client Group Research, Kotak Securities.

These issues kept the rupee under pressure over the past few sessions, he added.

The Sensex resumed slightly higher at 25,108.09 and firmed up further to 25,427.80 on short-covering in view of expiry of June contracts coupled with fall in global crude oil prices. Firm Asian cues due to rise in Chinese manufacturing June for the first time this year also boosted the market.

However, the BSE barometer declined afterwards to 24,878.66 before ending the week at 25,099.92 on tail-end selling.

The CNX 50-share Nifty of the National Stock Exchange also moved down by 2.65 points, or 0.04 per cent, to end the week at 7,508.80.

Shares of ONGC and RIL declined by 1.59 per cent and 2.39 per cent after the Government deferred a decision to hike natural gas prices.

Jignesh Chaudhary, Head-Research, Veracity Broking Services, said, "The equity market witnessed both positive and negative trends in the just-ended trading week. The market opened on a weak note due to conflict in Iraq but firmed up later on hopes of economic recovery and a good budget. FIIs have been very active in the market." Among the 30 shares in the Sensex, 17 gained while 13 declined.


The Indian rupee snapped its four-week losing streak by recovering 10 paise to end at 60.08 against the American currency on fresh selling of dollars by banks and exporters in view of good foreign capital inflows into equity market.

The rupee resumed higher at 60.10 per dollar as against the last weekend's level of 60.18 per dollar at the Inerbank Foreign Exchange (Forex) Market and firmed up further to 60.05 per dollar before ending the week at 60.08 per dollar, showing a gain of 10 paise, or 0.17 per cent.

It hovered in a range of 60.05 per dollar and 60.3850 during the week.

Pramit Brahmbhatt, Veracity Group CEO said," rupee traded sideways throughout the week though eventually it appreciated slightly to end the week. After falling for four weeks the rupee traded strong as FIIs were the net buyers of the shares worth Rs 162 crores till Thursday which helped Rupee to trade slightly strong. "The Rupee gain was capped as local equities continued to trade weak for the third week in a row taking cues from growing tensions in Iraq. Now Investors are waiting for the budget, scheduled on 10th July which will show the road ahead to the Indian markets".

Forward dollar premiums dropped on fresh receipts by exporters.

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Source: Times of Oman

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