The movement for the two key benchmark indices remained confined to a narrow range in early afternoon trade. At 12:18 IST, the barometer index, the S&P BSE Sensex, was up 0.61 points at 25,230.97. The Nifty 50 index was currently down 4.15 points or 0.05% at 7,726.90. The Sensex rose 43.85 points, or 0.17% at the day's high of 25,274.21 in early trade. The index fell 48.89 points, or 0.19% at the day's low of 25,181.47 in early trade, its lowest level since 6 May 2016. The Nifty rose 13.75 points, or 0.17% at the day's high of 7,744.80 in early trade. The index shed 15.25 points, or 0.19% at the day's low of 7,715.80 in early trade, its lowest level since 6 May 2016.
The broad market depicted weakness. There were more than two losers against every gainer on BSE. 1,480 shares fell and 690 shares rose. A total of 133 shares were unchanged. The BSE Mid-Cap index was currently down 0.6%. The BSE Small-Cap index was currently down 0.83%. Both these indices underperformed the Sensex.
In overseas stock markets, Asian stocks dropped as speculation mounted that the US Federal Reserve will raise interest rates as early as next month. In mainland China, the Shanghai Composite settled 0.77% lower. In Hong Kong, the Hang Seng index was currently down 0.3%. Investors in emerging markets are worried that higher interest rates in the US will drain liquidity from emerging markets and redirect it to developed economies.
US stocks finished lower yesterday, 23 May 2016, as the prospect that interest rates might rise as soon as next month weighed on utilities shares. Philadelphia Fed President Patrick Harker said yesterday, 23 May 2016, that a hike in June is appropriate unless data weakens. St. Louis Fed President James Bullard said holding rates too low for too long could cause financial instability. San Francisco Fed President John Williams said the election this fall wouldn't prevent the central bank from raising interest rates and that a hike in interest rate in June remains likely.
The minutes from the US Federal Reserve's April policy meeting released last week showed that Fed policy setters discussed the possibility of a June rate increase if the economy continued to strengthen. The Federal Open Market Committee 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.
Telecom stocks fell. Bharti Airtel (down 0.64%), Idea Cellular (down 2%), Reliance Communications (RCom) (down 7.04%) and Tata Teleservices (Maharashtra) (down 0.15%) declined. MTNL rose 1.45%.
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Shares of Bharti Infratel rose 0.07%. Bharti Infratel is a provider of tower and related infrastructure and is a unit of Bharti Airtel.
Cement stocks gained. Shree Cement (up 0.24%), ACC (up 0.99%), Ambuja Cements (up 0.09%), and UltraTech Cement (up 0.67%), gained.
Grasim Industries rose 0.6%. Grasim has exposure to the cement sector through its holding in UltraTech Cement.
Shriram EPC lost 6.61% after the company reported net loss of Rs 198.28 crore in Q4 March 2016, higher than net loss of Rs 90.73 crore in Q4 March 2015. The result was announced after market hours yesterday, 23 May 2016. Shriram EPC's net sales declined 9.8% to Rs 139.72 crore in Q4 March 2016 over Q4 March 2015.
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