The market reversed trend and entered negative terrain in mid-morning trade. At 11:17 IST, the barometer index, the S&P BSE Sensex, was down 50.05 points or 0.14% at 36,492.22. The Nifty 50 index was down 26.70 points or 0.24% at 11,027.10.
Broader market succumbed to selling pressure. Among secondary barometers, the BSE Mid-Cap index was down 1.24%. The BSE Small-Cap index was down 0.91%. Both these indices underperformed the Sensex.
The market breadth, indicating the overall health of the market, was negative. On BSE, 791 shares rose and 1373 shares fell. A total of 123 shares were unchanged.
Housing finance stocks tumbled. Can Fin Homes (down 6.41%), Indiabulls Housing Finance (down 6.33%), PNB Housing Finance (down 3.88%), Dewan Housing Finance Corporation (down 2.93%), GIC Housing Finance (down 2.16%), HDFC (down 1.5%), LIC Housing Finance (down 1.02%) and GRUH Finance (down 0.6%), edged lower.
Pharmaceutical shares fell across the board. Strides Shasun (down 3.91%), Piramal Enterprises (down 3.43%), Wockhardt (down 2.32%), Aurobindo Pharma (down 2.29%), Dr Reddy's Laboratories (down 1.97%), GlaxoSmithKline Pharmaceuticals (down 1.69%), IPCA Laboratories (down 1.58%), Cadila Healthcare (down 1.27%), Lupin (down 1.06%), Divi's Laboratories (down 0.98%), Sun Pharmaceutical Industries (down 0.84%), Alkem Laboratories (down 0.83%), Cipla (down 0.74%) and Glenmark Pharmaceuticals (down 0.7%), edged lower.
On the macro front, the Reserve Bank of India (RBI) said it has taken several proactive steps in the last few days. RBI has conducted/will be conducting Open Market Operation (OMO) in successive weeks on 19 September and 27 September 2018, RBI said in a release today, 27 September 2018.
As abundant caution, RBI has also provided a liberal infusion of liquidity through term repos in addition to the usual provision via the Liquidity Adjustment Facility (LAF). As of 26 September 2018, banks had availed of Rs 1.88 trillion through term repos from the Reserve Bank. As a result of these steps, the system liquidity is in ample surplus, the central bank added.
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Further, the increase in Facility to Avail Liquidity for Liquidity Coverage Ratio (FALLCR), announced today for effect from 1 October 2018, from the existing 11% to 13% will take the carve out from SLR available to banks to 15% of their NDTL. This should supplement the ability of individual banks to avail of liquidity, if required, from the repo markets against high-quality collateral. This, in turn, will help improve the distribution of liquidity in the financial system as a whole.
Going forward, RBI said it stands ready to meet the durable liquidity requirements of the system through various available instruments depending on its dynamic assessment of the evolving liquidity and market conditions.
Overseas, Asian shares were mixed. US stocks surrendered earlier gains to close lower on 26 September 2018 after the US Federal Reserve raised interest rates by 25 basis points, as widely anticipated, and indicated its intent to tighten once more in December.
Monetary-policy makers unanimously voted to hike the benchmark interest rate by a quarter-point to a range of 2% to 2.25% and predicted another hike by December and three more in 2019. The Fed also dropped the phrase that its policy remains "accommodative."
US Federal Reserve Chairman Jerome Powell told the media that the US Fed did not see inflation surprising to the upside. Powell also discussed the issue of trade tariffs and the ongoing trade war between the US and China, saying the Fed had heard a "rising chorus of concerns from businesses all over the country."
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