Key benchmark indices continued to languish in negative zone in early afternoon trade. At 12:20 IST, the barometer index, the S&P BSE Sensex, was down 91.28 points or 0.36% at 25,613.33. The Nifty 50 index was currently down 26.60 points or 0.34% at 7,843.55. Weakness in global stocks weighed on the domestic bourses. Asian stocks edged lower after minutes from the US Federal Reserve's April policy meeting signalled the US central bank could raise rates as soon as next month if data supported the case that the American economy is getting stronger. The Federal Open Market Committee (FOMC) next undertakes monetary policy review on 14-15 June 2016.
Investors in emerging markets, including India are worried that higher interest rates in the US will drain liquidity from emerging markets and redirect it to developed economies. The US central bank had lifted rates in December 2015 for the first time in nearly a decade.
The Sensex dropped 149.19 points or 0.58% at the day's low of 25,555.42 in mid-morning trade. The barometer index rose 9.95 points or 0.03% at the day's high of 25,714.56 at the onset of trading session. The Nifty lost 43.95 points or 0.55% at the day's low of 7,826.20 in mid-morning trade. The index rose 6.05 points or 0.07% at the day's high of 7,876.20 at the onset of trading session.
On the political front, the trends announced so far for assembly elections in Assam showed that Bharatiya Janata Party (BJP), Asom Gana Parishad and Bodoland People's Front alliance was set to form government in the state dislodging Congress, which has been in power for three consecutive terms. The trends for the assembly elections in West Bengal showed that Chief Minister Mamata Banerjee was all set to retain power in the state with her party Trinamool Congress heading for an emphatic victory. In Tamil Nadu, the trends showed that All India Anna Dravida Munnetra Kazhagam (AIADMK) was set to retain power in the state. In Kerala, the trends showed that the Communist Party of India-Marxist (CPM)-led Left Democratic Front (LDF) was set to oust Congress led United Democratic Front government. In Puducherry, the Congress-DMK alliance won 5 seats and was leading in 3 seats. The All India N.R. Congress won 6 seats and was leading in 2 seats as per results and leads for 21 out of 30 constituencies in Puducherry. The counting of votes for assembly elections held in these four states and the Union territory of Puducherry began early morning and final results are expected later in the day.
A win for the BJP led coalition in Assam will put BJP in the right shape for the 2017 assembly election in Uttar Pradesh (UP). The UP assembly has 403 seats. The number of seats in Rajya Sabha, or the upper house of parliament, depends on representation in states. A lack of a majority for the BJP led National Democratic Alliance (NDA) in the Rajya Sabha has delayed passage of a key tax reform bill viz. the Goods and Services Tax (GST) bill in the upper house. The NDA rules the central government after an emphatic victory in the 2014 Lok Sabha election.
Finance Minister Arun Jaitley said in an interview to All India Radio recently that the GST Bill will be put to vote in the monsoon session of Parliament if Congress continues to oppose the Legislation. The GST bill, which has been approved by the Lok Sabha, is pending in the Rajya Sabha because of stiff resistance by the Congress. For the GST bill to become a law, the GST bill also needs to be approved by half the state assemblies.
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In overseas stock markets, Asian stocks edged lower after minutes from the US Federal Reserve's April policy meeting signalled the US central bank could raise rates as soon as next month if data supported the case that the American economy is getting stronger. US stocks finished little-changed after seeing high intraday volatility yesterday, 18 May 2016, after minutes from the Federal Reserve's April 26-27 meeting indicated that most of its members are ready to lift rates as early as June if economic data points to stronger US second-quarter economic growth along with higher inflation and employment. The Federal Open Market Committee (FOMC) next undertakes monetary policy review on 14-15 June 2016. The US central bank had lifted rates in December 2015 for the first time in nearly a decade.
Closer home, the market breadth indicating the overall health of the market was positive. On BSE, 1,202 shares rose and 1,048 shares declined. A total of 146 shares were unchanged. The BSE Mid-Cap index was currently up 0.05%. The BSE Small-Cap index was currently up 0.34%. Both these indices outperformed the Sensex.
Bharat Heavy Electricals (Bhel) rose 1.09% after the company during market hours today, 19 May 2016, said that it has commissioned a 250 megawatts thermal power plant in Maharashtra.
Auto stocks were mixed. Tata Motors (up 1.51%), Mahindra & Mahindra (M&M) (up 0.16%), Ashok Leyland (up 0.54%), Hero MotoCorp (up 0.3%) and TVS Motor Company (up 0.1%) rose. Eicher Motors (down 1%), Maruti Suzuki India (down 0.16%) and Bajaj Auto (down 0.46%) fell.
Cement stocks fell. Ambuja Cements (down 0.49%), ACC (down 0.95%) and UltraTech Cement (down 0.35%) declined. Shree Cement rose 1.36%.
Grasim Industries was off 0.38% at Rs 4,240. Grasim has exposure to the cement sector through its holding in UltraTech Cement.
JK Lakshmi Cement surged 5.92% after net profit spurted 699.66% to Rs 48.38 crore on 29.09% rise in total income to Rs 769.35 crore in Q4 March 2016 over Q4 March 2015. JK Lakshmi Cement attributed the strong showing to a steep growth in production and sales along with its relentless efforts to improve efficiency and cut operating cost.
Ashoka Buildcon rose 2.04% after the company announced that it was declared the lowest bidder for a highway project in Jharkhand. The company quoted cost of the project is Rs 486 crore.
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