Weakness continued on the bourses in early afternoon trade. At 12:25 IST, the barometer index, the S&P BSE Sensex, was off 306.19 points or 1.17% at 25,959.05. The 50-unit Nifty 50 index was off 92.15 points or 1.16% at 7,862.15. The Sensex failed to retain the psychological 26,000 level which it had reclaimed for a brief period in mid-morning trade. Earlier, the Sensex slipped below the psychological 26,000 level after a weak opening triggered by Bharatiya Janata Party's (BJP) drubbing in Bihar assembly elections.
The weakness on the domestic bourses stemmed from a poor showing of BJP-led National Democratic Alliance (NDA) in the Bihar assembly elections which has raised concerns among investor that the opposition parties may disrupt the Centre's economic reform process. The pre-poll alliance between the Janata Dal (United), Rashtriya Janata Dal and Congress scored a stunning win in the Bihar assembly elections for which counting took place yesterday, 8 November 2015, dealing a major blow to the ruling NDA government at the Centre. The NDA won just 58 seats of which the BJP won 53 seats in the Bihar assembly elections. With the opposition, emboldened by the victory in Bihar, unlikely to let Parliament function smoothly in the winter session, the fate of key legislation aimed at furthering the government's reform agenda remains uncertain. The BJP-led NDA has a comfortable majority in Lok Sabha, but lags in numbers in the Rajya Sabha, the upper house, where members are elected by the strength of legislators in the states. The NDA was hoping that a good performance in some of the state assembly elections would help it consolidate its position in the Rajya Sabha, which in turn could help it push through important legislation in the upper house. At present, the Congress is the single largest party in the Rajya Sabha with 67 seats. The BJP has 48 members in the 245-member house and the NDA 60 members.
Earlier, the Sensex and Nifty, both, hit their lowest level in almost 6 weeks at the onset of the trading session in the wake of BJP's drubbing in Bihar assembly elections. The Sensex tanked 608.34 points or 2.31% at the day's low of 25,656.90 at the onset of the trading session. The Nifty 50 slumped 182.60 points or 2.29% at the day's low of 7,771.70 at the onset of the trading session.
The market breadth indicating the overall health of the market once again turned negative from positive in early afternoon trade. Earlier, the market breadth had turned positive from negative in mid-morning trade. On BSE, 1,239 shares declined and 1,063 shares rose. A total of 105 shares were unchanged. The BSE Mid-Cap index was currently down 0.09%. The decline in this index was lower than Sensex's decline in percentage terms. The BSE Small-Cap index was currently up 0.18%, outperforming the Sensex.
Cement stocks declined. Ambuja Cements (down 2.05%), ACC (down 1.73%) and UltraTech Cement (down 1.85%) edged lower. Shree Cement (up 0.38%) edged higher.
Grasim Industries was off 1.1%. Grasim has exposure to cement sector through its holding in UltraTech Cement.
More From This Section
Telecom stocks also dropped. Idea Cellular (down 3.88%), Bharti Airtel (down 2.48%), Mahanagar Telephone Nigam (down 0.56%) and Tata Teleservices (Maharashtra) (down 0.77%) edged lower.
Reliance Communications (RCom) declined after the company reported flat bottom line in Q2 September 2015. The stock was currently off 0.51%. The stock hit a high of Rs 78.40 and a low of Rs 74 so far during the day. RCom's consolidated net profit rose 1.9% to Rs 156 crore on 0.9% decline in revenue to Rs 5355 crore in Q2 September 2015 over Q2 September 2014. The result was announced after market hours on Friday, 6 November 2015. RCom's earnings before interest, taxation, depreciation, and amortization (EBITDA) declined 2.5% to Rs 1782 crore in Q2 September 2015 over Q2 September 2014.
Bharat Heavy Electricals (Bhel) lost 2.92% at Rs 186.20, with the stock extending previous trading session's decline triggered by the company reporting poor Q2 earnings. The stock had fallen 1.24% to settle at Rs 191.80 on Friday, 6 November 2015, in the wake of the company's announcement of the poor Q2 earnings. Bhel reported net loss of Rs 204.90 crore in Q2 September 2015 compared with net profit of Rs 124.84 crore in Q2 September 2014. Total income declined 0.45% to Rs 6311.23 crore in Q2 September 2015 over Q2 September 2014.
Meanwhile, Bhel after market hours on Friday, 6 November 2015 said it has secured prestigious orders, cumulatively valued at Rs 4614 crore for setting up two supercritical thermal power projects in Andhra Pradesh.
In overseas stock markets, key benchmark indices in emerging Asia were mostly in red after robust US jobs data for October 2015 bolstered expectations of the US Federal Reserve hiking interest rates at its next monetary policy review in December 2015. Investors in emerging markets, including India are worried that once the Fed starts raising interest rates, it will drain liquidity from global emerging markets and redirect it to developed economies. The Fed has held its benchmark short-term interest rate near zero since December 2008. The ultra-loose monetary policy in the US has encouraged heavy investment in higher-yielding emerging markets. The next monetary policy review from the Fed is scheduled on 15-16 December 2015. The Fed-funds futures market is now pricing in 70% probability of an increase in US benchmark interest rate in December 2015.
Powered by Capital Market - Live News