After opening the day on a firm note, Indian share markets erased all gains in the last hour of trading and ended lower.

Benchmark indices reversed course and erased all the intraday gains to end in the red amid high volatility.

The denting sentiment was the depreciating rupee, which fell to its all-time low today.

At the closing bell, the BSE Sensex stood lower by 100 points (down 0.2%).

Meanwhile, the NSE Nifty closed lower by 25 points (down 0.2%).

Power Grid and Bajaj Finserv were among the top gainers today.

ITC and Wipro, on the other hand, were among the top losers today.

The SGX Nifty was trading at 15,766, down by 58 points, at the time of writing.

The BSE MidCap index ended lower by 0.4% while the BSE SmallCap index ended higher by 0.2%.

Sectoral indices ended on a mixed note with stocks in the IT sector and auto sector witnessing most of the selling.

Metal stocks and pharma stocks, on the other hand, witnessed some buying.

Electric vehicle stocks were in focus after the central government said it will soon take a call on whether or not to take penal action against manufacturers of faulty electric vehicles.

Shares of Siemens and Varun Beverages hit their 52-week highs today.

Asian share markets ended on a mixed note today.

The Nikkei and the Hang Seng ended the day up by 1% and 0.1%, respectively. The Shanghai Composite ended on a flat note.

The rupee is trading at 79.28 against the US$.

In news from the energy sector, the government of India has expanded the excise duty exemption for biofuels.

The move is made to encourage the blending of higher proportions of ethanol and components of vegetable oil with gasoline and diesel.

The government has been particularly keen to rein in its oil import bill since the conflict in Ukraine spurred a surge in global crude prices.

India is the world's third-biggest oil importer and consumer.

As per the government order, the tax exemption will be applicable to an ethanol portion of 12%-15% blended with gasoline, up from 10% previously.

For diesel, the exemption will apply to a 20% portion of alkyl esters of long-chain fatty acids obtained from vegetable oils.

The government plans to introduce 20% ethanol blending with gasoline in some parts of the country from April next year, followed by a nationwide rollout from the financial year 2025/2026.

Moving on to news from the currency space, the rupee weakened further in afternoon trade today to touch a fresh record low against the US dollar.

The fall was witnessed as concerns of a wider current account deficit came to the forefront after the country's June trade deficit hit a record high.

Data late on Monday showed India's June trade deficit widened to a record US$ 25.6 bn, pushed by a rise in crude oil and coal imports, from US$ 9.6 bn a year ago.

The partially convertible rupee was trading at 79.13/79.14 per dollar, after hitting a life low of 79.15.

Note that a depreciating rupee can be a lifeline for export-backed industries like IT. This begs the question - Can a depreciating rupee trigger the recovery in Indian IT stocks?

The IT index is down by 28% in H12022 while a depreciating rupee may trigger a recovery in the IT index.

According to chartist Brijesh Bhatia, on the weekly chart of the IT index, the bullish harami candlestick pattern is visible in mid-June indicating the sign of reversal.

US$ INR & Nifty IT Index

(Click on image to enlarge)

 Here's an excerpt from Brijesh's article:

Historically, the USDINR and IT index stocks go hand-in-hand, though sometimes there are divergence considering the equity market scenario but the long-term relationship stays together.

The rupee is likely to hit 80 sooner which will be beneficial for the Indian IT sector.

Moving on to news from the banking sector, Ujjivan Small Finance Bank was among the top buzzing stock today.

Ujjivan Small Finance Bank is a mass market-focused bank in India, catering to financially unserved and underserved segments.

The bank posted a healthy Q1 business update. Total deposits aggregated to Rs 184.3 bn as of 30 June 2022, up 34.8% from 136.7 bn posted on 30 June 2021. Sequentially, total deposits rose 0.8% in Q1.

The loan book has increased 6.9% to Rs 194.1 bn as of 30 June 2022 compared with Rs 181.6 bn as of 31 March 2022.

CASA ratio was 28% as of 30 June 2022 as compared with 20.3% as of 30 June 2021 and 27.3% as of 31 March 2022.

Ujjivan Small Finance Bank's share price rose 2.6% on the BSE today on the back of a healthy overall outlook.

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