Markets end green on a fifth day in row, oil and gas sector bleeds

For the fifth consecutive day, markets on Wednesday ended on a positive note in spite of sudden spike in the global oil prices which crossed $70 per barrel.

 “It has been a volatile day on the bourses as benchmark indices swung between the positive and negative zones to finally close the day with marginal gains. Investors adopted a cautious stance ahead of the earnings season which will kick off this Friday and the release of the minutes of the Federal Reserve’s March, 18 meeting, later today”, said Abhijeet Dey- Senior Fund Manager-Equities at BNP Paribas Mutual Fund. 

At the end of the day, the 30-share BSE Sensex was up by a modest 60.19 points at 33,940.44 and the 50-share NSE Nifty gained 14.90 points to close at 10,417.15.

“The Nifty opened gap up today only to face selling pressure immediately after the opening. This made the opening level as the highest level for the day. The selling pressure in the initial hours of the session was absorbed near the support level of 10350. In the second half of the session the index made an attempt to take out the high however couldn’t succeed. Thus the opening level acted as a cap for the entire day. All this activity has resulted in a Hanging Man formation on the daily chart, which is a bearish candlestick pattern”, said Gaurav Ratnaparkhi- senior technical analyst, Sharekhan.

The trading session ended with Vedanta, TCS, Sun Pharma, HCL Technologies and Eicher Motors being the top gainers while oil companies like BPCL, Hindustan Unilever and Indian Oil, Adani ports SBI and Yes Bank were among the top losers. Oil companies bleed as they lost over 6-7 percent at the end of day’s trading.

According to Dey, “Investor woes were added by a sudden spike in global crude oil prices which crossed the $70 a barrel mark. In the global commodities markets, Brent for June 2018 settlement was down 38 cents at $70.66 a barrel. However, the contract surged $2.39 a barrel or 3.48% to settle at $71.04 a barrel during the previous trading session. Spike in oil prices raises India's import bill and can consequently have a negative impact on the country’s trade balance.”

 Among sectoral indices, oil and gas, power, realty, banks, utilities, finance and energy ended on a negative note.

“On the sectoral front, the PSU banking index on the National Stock Exchange (NSE) lost over 2% in trade today. On the other hand, Information Technology (IT) and metals indices witnessed gains of over 1%”, added Dey.  

In broader markets, BSE Midcap index closed 0.19 per cent down at 16621.58, however the Smallcap index closed 0.20 per cent higher at 17,983.46.

In Asia, Shanghai Composite and Hang Seng ended green while Nikkei ended red. At the time of writing this piece, FTSE 100 was down by 0.29%, DAX was down by 0.99% and S&P 500 had closed 1.67% up on the previous day.

Meanwhile, among in the precious metal section, gold gained 1.02% by closing on Rs 31,215 while crude oil prices rose 1.77% to end at Rs. 4,327.