The benchmark indices extended losses in afternoon trade. Trading sentiment took a hit as the ruling BJP appeared to be set for second place in a tight contest for Jharkhand Assembly election. The Nifty 50 index slipped below 12,250 level. At 13:21 IST, the barometer index, the S&P BSE Sensex, was down 123.93 points or 0.30% at 41,557.61. The Nifty 50 index was down 21.90 points or 0.18% at 12,249.90.
In the broader market, the S&P BSE Mid-Cap index was down 0.04% and the S&P BSE Small-Cap index was up 0.05%.
The market breadth turned negative. On the BSE, 1265 shares rose and 1245 shares fell. A total of 174 shares were unchanged. In Nifty 50 index, 29 stocks advanced and 21 stocks declined.
Politics:
Jharkhand Assembly election results will be declared today. BJP government went solo this time. The opposition alliance of the Jharkhand Mukti Morcha (JMM), the Congress and the Rashtriya Janata Dal (RJD) seems to be having an edge in the 81-member Assembly.
While the BJP is ahead on 29 seats, JMM is leading in 24 seats. Congress is ahead on 14 seats and RJD is leading in 4 seats. The majority mark for winning the election is 41 seats.
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Legislative Assembly elections were held in Jharkhand from 30 November to 20 December 2019 to elect the 81 members of Legislative Assembly.
Stocks in Spotlight:
Shares of Titan Company, UltraTech Cement and Nestle India were in the limelight ahead of the Sensex entry today, 23 December 2019. As a part of the rejig, Titan Company (up 0.75%), UltraTech Cement (down 0.65%), Nestle India (down 1.19%) will be added to BSE Sensex whereas Tata Motors (down 0.37%), Tata Motors DVR (up 0.62%), Vedanta (up 1.66%), Yes Bank (down 0.39%) will be deleted from the BSE Sensex. Any change in index weights can result in portfolio churns for major funds. The BSE will also rejig 14 other indices. However, there will be no change in the S&P BSE Bankex.
Reliance Industries (RIL) fell 2.02% to Rs 1567.05 on reports that the government has sought to block RIL selling a 20% stake in its oil and chemical business to Saudi Aramco. According to the report, the Delhi High Court on Friday (20 December) asked RIL and British Gas to disclose their assets after the Centre sought to restrain them from disposing of the same. In an application filed in September, the government had sought curbs citing the failure of the two companies to honour their payment under a $4.5 billion international arbitral award in the Panna-Mukta and Tapti production sharing contracts.
In August, RIL announced its plans to sell 20% stake in its refining and petrochemicals business for $15 billion to Saudi Aramco. The deal, which values the oil-to-chemicals (O2C) business at $75 billion, is part of a plan to make RIL a zero-debt company in the next 18 months.
Power Grid Corporation of India (PGCIL) was trading 0.13% higher at Rs 186.35. The firm said it acquired Meerut-Simbhavali Transmission as a special purpose vehicle to establish transmission system in Uttar Pradesh as special purpose vehicle (SPV) project. The acquisition was done after PGCIL emerged as successful bidder under tariff based competitive bidding. The transmission system is an intra state transmission system project of Uttar Pradesh and is to be progressively constructed by August 2021.
Foreign Markets:
Markets in Europe opened lower while Asian Markets were trading mostly higher amid greater optimism for U.S.-China relations.
U.S. President Donald Trump on Friday said he had a very good talk with China's leader Xi Jinping about the so-called phase one trade deal they struck in mid-December. That indicated more progress has been made after they reached the initial agreement.
The president said in a tweet that China has started large scale purchases of U.S. agricultural products, and a formal deal signing is being arranged. On Saturday, he said both countries would very shortly sign the deal.
In other positive trade developments, China on Monday said it will lower import tariffs on over 850 products from Jan.1, including frozen pork, as well as some information technology products starting July 1.
In US, stock indexes set records highs on Friday, after encouraging US economic data and optimism about international trade deals.
On economic front, the Commerce Department's third estimate of third-quarter GDP, published on Friday, left growth unchanged 2.1%, with strong consumer spending offset by weaker business investment in inventories.
In other US economic data, Americans increased spending in November at the fastest rate in four months.
Wall Street sentiment also remains supported by progress on international trade policy, after the US House passed the United States-Mexico-Canada Agreement (USMCA) bill to replace North American Free Trade Agreement (NAFTA) on Thursday and the US and China agreed on a partial deal last Friday.
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