MUMBAI, June 21 (Business Standard): Benchmark indices settled lower this week as investors turned cautious amid tensions in Iraq and weak rupee against dollar.
India's concern for crude oil rose amid media reports of attacks on NATO fuel trucks on the Afghanistan-Pakistan border. Increase in crude oil prices has raised concerns of increase in fuel price inflation and increase in India's current account deficit and fiscal deficit.
Meanwhile, in tandem with weaker equities, the rupee today closed 10 paise lower at 60.18 against the US dollar driven by higher oil-related demand for the American currency, extending its string of weekly losses to four.
BSE Sensex fell 122 points or 0.5 per cent to 25,106 and the 50-unit CNX Nifty slipped 31 points or 0.41 per cent to 7,511.
However, the broader markets outperformed the benchmark indices. The BSE Mid-Cap index rose 26 points or 0.3 per cent to 8,961.96 and the BSE Small-Cap index rose 87 points or 0.90 per cent to 9,761.
On the macro-economic front, the annual rate of inflation based on the monthly wholesale price index (WPI) accelerated to 6.01 per cent for the month of May 2014, from 5.2 per cent in April 2014, data released by the government on Monday, showed.
The WPI inflation for March 2014 was revised upwards to 6 per cent, from 5.7 per cent reported earlier.
Meanwhile, the southwest monsoon has covered almost half of India but pockets of worry remain. Of the 600-odd districts, 328 were under watch, based on the rainfall in the first 15 days, officials said.
Oil on Friday fell from a nine-month high, slipping below $115 a barrel, as concerns eased that violence in Iraq, OPEC's second-largest producer, might lead to supply disruptions.
Government-led forces were concentrated north of Baghdad on Friday, to strike back at Sunni Islamists whose drive toward the capital has prompted the United States to send military advisors to stiffen government resistance.
Mahindra & Mahindra was the biggest loser in the Sensex pack last week. The stock fell 7.12 per cent to Rs 1,142. Hero MotoCorp and Maruti Suzuki fell between 2-3 per cent.
In the banking space, ICICI Bank, HDFC Bank, and State Bank of India edged lower, all slipping between 1-2 per cent. However, Axis Bank rose 2.67 per cent.
Index heavyweight Reliance Industries slumped over 4 per cent. Chairman Mukesh Ambani said at the company's annual shareholders' meeting on Wednesday that RIL is investing over Rs 1.8 trillion in its businesses in the current three years' investment cycle.
ONGC fell over 1 per cent on concerns its subsidy burden will rise along with increase in crude oil prices.
IT stocks surged after the US Federal Reserve on Wednesday gave a positive assessment of the world's largest economy and committed to retaining its accommodative monetary policy. Infosys, TCS and Wipro surged between 1-4 per cent.
Markets are expected to be range bound in the coming week as investors wait to watch monsoon progress and Union Budget updates amid rising Iraq concerns.
Foreign fund flows, global cues and rupee movement against the US dollar will also hold significance for the domestic equities.
