Iraq tensions spook markets

Wed, 18 Jun Closing

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Triggered by tensions in Iraq, Indian benchmark indices today closed on a negative note. The heavy selling of index heavy weights pulled the markets down and the Indian rupee weakened further as against the US dollar. Stocks from the oil and gas sector proved as a drag on account of rise in global crude oil prices due to concerns of oil supply shortages. Both the BSE Midcap and the BSE Small Cap indices lost steam and were down by 0.1% and 0.4% respectively. The BSE Sensex closed lower by 316 points, while the NSE-Nifty closed lower by about 74 points.

On the global front, most of the Asian indices closed the day on a weak note. Whereas, the European indices have opened in the green. The rupee was trading at Rs 60.33 to the dollar at the time of writing.

Barring GAIL and MRPL, most of the stocks from the energy sector traded in red and closed on a pessimistic note. Stocks of HPCL, Indraprastha Gas and BPCL led the pack of losers today. According to a leading daily, Reliance Industries today in its 40th annual general meeting has mentioned about investing Rs 1.8 trillion across businesses in the next three years. Mr. Ambani plans to utilize the above sums for margin-enhancing petrochem units, expansion of energy business, opening more retail stores and rolling-out of the telecom business. RIL's telecom arm Reliance Jio Infocomm is expected to roll out broadband services in the coming months. The company's Chairman also intends to double revenues from its retail business every 3-4 years. Further, the company is expected to raise output from its eastern offshore gas fields. The stock closed lower by 1.6% today.

As per a leading daily, the oil and gas sector is expected to get a new lease of life with introduction of new policies to ease foreign investments in the sector. The Petroleum Minister has emphasized the need to increase oil and gas production and expedite the pace of domestic exploration and production. The Ministry is also in the process of ushering in a new exploration and production policy after amending the existing one. Proper transport systems and time-bound delivery of government services will remain the top priority of the new government. The Ministry also intends to introduce a uniform licensing policy to facilitate production of all forms of hydrocarbons - from oil to shale gas - under a single policy regime. Oil and gas auctions will be offered with all statutory clearances in order to de-risk exploration activities. Gas pricing issues also need to be addressed on a priority basis.

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