Nifty reclaims 23,550 level; European markets edge lower
The benchmark indices pared some losses in afternoon trade. Elevated crude oil prices continued to weigh on the macroeconomic outlook, while a weakening rupee further dampened investor sentiment amid renewed inflation concerns. The Nifty traded tad above the 23,550 mark.
At 12:25 IST, the barometer index, the S&P BSE Sensex declined 376.56 points or 0.50% to 75,201.02. The Nifty 50 index lost 80.30 points or 0.34% to 23,554.80.
In the broader market, the BSE 150 MidCap Index declined 0.06% and the BSE 250 SmallCap Index dropped 0.32%.
The market breadth was negative. On the BSE, 1,823 shares rose and 2,395 shares fell. A total of 243 shares were unchanged.
Gainers & Losers:
Adani Enterprises (up 5.02%), Max Health (up 4.36%), Adani Ports (up 3.40%), Coal India (up 3.13%) and Tata Steel (up 2.82%) were the top gainers.
Infosys (down 4.32%), HCL Tech (down 3.64%), HDFC Life (down 3.62%), Tech Mahindra (down 3.57%) and Wipro (down 2.31%) were the top gainers.
Stocks in Spotlight:
Larsen & Toubro rose 0.25%. The company said that L&T Energy Hydrocarbon Offshore has secured a 'large' offshore order from the Oil & Natural Gas Corporation (ONGC) for the additional development of Ratna?I (ADR I) and NLM-14 project off India's west coast. As per the company's internal classification, the value of this 'large' contract lies between Rs 2,500 crore and Rs 5,000 crore.
Power Mech Projects added 1.58%. The company said that it has secured an operations and maintenance contract worth Rs 970 crore from Vedanta Power for its Chhattisgarh-based Sakti Thermal Plant.
Kiri Industries fell 2.52%. The company said that Equinaire Holdings has successfully acquired 20 million shares, representing a 40% stake, in Makilala Mining Company, Inc. (MMCI) for a total cash consideration for the transaction is $5.01 million.
MMCI is developing the Maalinao-Caigutan-Biyog (MCB) copper-gold project in Kalinga, Philippines. This acquisition aligns with Kiri Industries' strategic integration objectives to secure a reliable, long-term upstream supply of copper concentrate for its greenfield project under Indo Asia Copper.
Global Markets:
Markets in Europe and Asian declined across the board on Wednesday as surging energy prices flirted with the psychologically critical $100-a-barrel milestone, compounding fears of a prolonged stagflation shock.
The widening Middle Eastern conflict threatened to force the European Central Bank into further monetary tightening. Money markets have almost fully priced in a 25-basis-point interest rate increase from President Christine Lagarde and the Governing Council on Thursday, taking the deposit facility rate to 2.50%:
Oil prices remained a major market concern. Brent crude edged higher after attacks on Saudi energy infrastructure by Iran-backed Houthi militants and further US-Iran military escalation. The surge has renewed concerns that higher energy costs could keep inflation elevated and limit central banks' room to cut interest rates.
The geopolitical situation also intensified after the US said its forces destroyed five Iranian oil tankers following an attempted attack on a US Navy vessel. The US Treasury also announced fresh sanctions targeting Iran's aviation sector, adding another layer of pressure on Tehran.
Wall Street ended lower on Tuesday as the rise in crude prices revived inflation concerns. The Dow Jones Industrial Average fell 1.18% to 52,786.07, the S&P 500 declined 0.58% to 7,673.52 and the Nasdaq Composite dropped 0.32% to 26,421.41. The US 10-year Treasury yield also moved near 4.8%.
Markets are now focused on US inflation data due later this week. The August CPI, scheduled for Friday, is expected to provide fresh clues on the Federal Reserve's policy path ahead of its 16-17 September meeting.
Rising oil prices have increased concerns that a renewed inflationary push could complicate the Fed's decision on interest rates. Markets were pricing roughly a 60% probability of a rate hike next week.
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