 "Flat closing on unfavourable macro data, Brexit likelihood; FOMC eyed")
Markets finished flat amid a volatile trading session on the back of higher-than-expected consumer inflation and rise in the wholesale price index based inflation for the second straight month. US Fed and BOJ meets and the growing possibility that the UK might leave the European Union kept investors edgy throughout the session.
Participants eagerly await the outcome of the US Fed’s two-day meet scheduled to begin later today.
The S&P BSE Sensex dropped 1 points to end at 26,396 and the Nifty50 slipped 2 points to end at 8,109.
Nikhil Kamath, Co-Founder & Director, Zerodha says "markets remained in a small range through trading Tuesday, the high and low intraday were broadly 50 points away. Small cap companies outperformed larger stocks with the Banking index also outperforming. The likelihood of a Brexit has increased significantly with the Sun coming out with a outlook which favors a exit from the EU, this could negatively impact global markets and amidst this heightened volatility trade for India will suffer as well. We are witnessing extreme volatility with most global indices and domestic bourses remain relative outperformers at this point, displaying significant strength on a relative basis."
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KEY EVENTS
India’s Consumer Price Index (CPI)-based inflation for the month of May 2016 rose to 5.76%, the highest in 19 months, and the most since the new series of retail inflation with base year of 2012 was introduced from January 2015. CPI inflation for April was 5.47%, revised upwards from 5.39% earlier, and 5.01 per cent in May 2015.
The Wholesale Price Index (WPI) rose 0.79% in May, after rising 0.34% in April 2016 and coming in at -2.20% during the corresponding month of the previous year. This marks the second consecutive month of rise, after 17 straight months of fall. The WPI had last shown inflation in October 2014, at 1.66%.
GLOBAL MARKETS
Asian stocks slipped acr4oss the board amid possibility that the UK might leave the European Union. Also, Participants eagerly await the outcome of the US Fed’s two-day meet scheduled to begin later today.
Japan’s Nikkei, Singapore’s Straits Times and Hong Kong’s Hang Seng dropped between 0.6%-1%.
Meanwhile, the Bank of England, Swiss National Bank and the Bank of Japan will also meet this week.
European equities followed the tandem and are trading lower with FTSE 100, CAC 40 and DAX are down between 1%-1.6%.
LEADERS & LAGGARDS
Shares of PSU banks gained after the RBI came out with a scheme for resolution of bad loans of large projects wherein a portion of the debt will be converted into equity or other instruments. Punjab National Bank, SBI, Federal Bank, Indian Overseas Bank and Bank of Baroda surged between 1%-6%.
Among other prominent gainers, BHEL climbed 0.8% after it commissioned another 195 MW unit at Muzaffarpur thermal power station in Bihar.
The upward move by the healthcare stocks continued for the second day with Cipla, Sun Pharma and Dr Reddy’s Lab up between 0.1%-2.5%.
Deepak Fertilisers & Petrochemicals Corporation surged 4% after the company announced that the Ministry of Chemicals and Fertilizers has agreed to release about Rs 485 crore outstanding subsidy payments to the company.
On the flip side, energy stocks took a hit on the back of failing crude oil prices owing to signs of increasing US supply.
Technology shares lost steam with TCS, Infosys and Wipro down up to 1%.
KPIT Technologies fell 5% after Sparta Consulting Inc (Sparta), a 100% subsidiary of KPIT Technologies, was hired by Copart Inc (Copart), a US corporation, to design a replacement for its legacy Enterprise Resource Planning system.