Weakness in Asian markets weighed on Indian stocks, with the two key benchmark indices extending losses in early afternoon trade. At 12:18 IST, the barometer index, the S&P BSE Sensex, was down 190.37 points or 0.77% at 24,619.16. The 50-unit Nifty 50 index was down 51.90 points or 0.69% at 7,486.85. Index heavyweights HDFC and ITC led losses for the two key benchmark indices.
The Sensex dropped 190.77 points or 0.76% at the day's low of 24,613.51 in early afternoon trade, its lowest level since 11 March 2016. The barometer index rose 36.49 points or 0.14% at the day's high of 24,840.77 at the onset of the trading session. The Nifty shed 56.50 points or 0.74% at the day's low of 7,482.25 in early afternoon trade, its lowest level since 11 March 2016. The index rose 6.45 points or 0.08% at the day's high of 7,545.20 at the onset of the trading session.
The market breadth indicating the overall health of the market was negative. On BSE, 1,356 shares fell and 917 shares rose. A total of 130 shares were unchanged. The BSE Mid-Cap index was currently down 0.44%. The BSE Small-Cap index was currently down 0.23%. The decline for both these indices was lower in percentage terms than the Sensex's decline.
In overseas markets, Asian stocks edged lower as investors braced for a run of policy announcements from the world's major central banks this week and after the Bank of Japan held policy steady as expected. Japan's Nikkei Average settled 0.68% lower. At the conclusion of a two-day monetary policy meeting today, 15 March 2016, the Bank of Japan (BOJ) maintained its commitment to raise the monetary base by 80 trillion yen annually and decided to continue applying a negative interest rate of minus 0.1% to the policy-rate balances in current accounts held by financial institutions at the bank. If needed, additional easing steps will be taken to hit 2% inflation, the BOJ said. BOJ had stunned markets in January by adopting negative rates.
US stocks closed on a mixed note yesterday, 14 March 2016. The US Federal Reserve's crucial two-day monetary policy meeting begins today, 15 March 2016. Federal Reserve officials are likely to hold short-term interest rates steady at its policy meeting amid uncertainties about global financial markets and global growth. The Fed in December 2015 raised its benchmark federal-funds rate from near zero to a range between 0.25% and 0.5%.
Bank stocks gained as the latest data showing easing of headline inflation in February 2016 gave rise to expectations for a policy rate cut at the Reserve Bank of India's next policy meeting on 5 April 2016. Among public sector banks, Punjab National Bank (up 1.7%), Bank of Baroda (up 0.78%), State Bank of India (SBI) (up 1.43%), Allahabad Bank (up 0.58%), Union Bank of India (up 1.4%), Canara Bank (up 1.16%), and Bank of India (up 2.03%) edged higher.
Among private sector banks, Axis Bank (up 1%), Kotak Mahindra Bank (up 0.12%), Yes Bank (up 1.48%) and IndusInd Bank (up 0.58%) edged higher. HDFC Bank declined 0.16%.
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ICICI Bank rose 1.24% after the private sector bank said that it has through its DIFC (Dubai) branch, priced an issuance of 10 year fixed rate notes of an aggregate principal amount of $700 million. The notes carry a coupon of 4% and were offered at an issue price of 99.592. The announcement was made before market hours today, 15 March 2016.
Realty stocks rose as the latest data showing easing of headline inflation in February 2016 gave rise to expectations for a policy rate cut at the Reserve Bank of India's next policy meeting on 5 April 2016. DLF (up 0.01%), Sobha (up 1.3%), Indiabulls Real Estate (up 1.15%), Unitech (up 0.38%), Godrej Properties (up 0.23%), and Housing Development & Infrastructure (HDIL) (up 0.86%) edged higher. D B Realty declined 1.78%. Lower interest rates may help revive demand for properties. Purchases of both residential and commercial property are largely driven by finance.
Persistent Systems rose 1.5% after the company said that on 14 March 2016 it signed an agreement to acquire assets of PRM Cloud Solutions, an Australia-based company engaged in salesforce implementation services. PRM Cloud Solutions is a subsidiary of Datetix Group, a company listed on Australian Securities Exchange (ASX). The announcement was made after trading hours yesterday, 14 March 2016.
On the macro front, the latest data showed that inflation based on the consumer price index (CPI) dipped to four month low of 5.18% in February 2016 from 5.69% in January 2016. The decline was due to easing of food price inflation. The Consumer Food Price index (CFPI) eased sharply to 5.3% in February 2016 from 6.85% in January 2016. The core CPI inflation rose to 4.77% in February 2016 from 4.5% in January 2016.
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