Key benchmark indices logged sharp losses led by index pivotals L&T, ICICI Bank and Reliance Industries. The barometer index, the S&P BSE Sensex, lost 300.82 points or 0.86% at 34,848.30, as per the provisional closing data. The Nifty 50 index lost 86.30 points or 0.81% at 10,596.40, as per the provisional closing data. The Sensex provisionally ended below the psychologically important 35,000 mark.
Sentiment was weak due to political uncertainty in Karnataka after the Supreme Court reportedly directed for floor test in Karnataka Assembly tomorrow, 19 May 2018. Crude oil prices hovering near the $80 per barrel mark and sustained selling from foreign funds also dented sentiment.
On the political front, Supreme Court has reportedly directed for floor test in Karnataka Assembly at 16:00 IST tomorrow, 19 May 2018 after hearing Congress-JDS plea against Karnataka Governor inviting Bharatiya Janata Party (BJP) to form government. BJP's B.S. Yeddyurappa was yesterday, 17 May 2018, sworn in as chief minister of Karnataka. The swearing-in came after a four-hour, post-midnight Supreme Court hearing on a Congress-JDS petition that sought to quash his candidature.
Karnataka delivered a hung assembly on Tuesday with no party getting a clear majority to form government in the state. While the BJP emerged as the single-largest party, winning 104 seats, falling marginally short of the 113 seats needed to form a government. The Congress and the Janata Dal Secular (JDS) stood second and third with wins on 78 and 38 seats respectively.
In global commodities markets, Brent crude oil futures edged higher. Brent for July 2018 settlement was up 41 cents at $79.71 a barrel. Higher crude oil prices could increase India's fiscal deficit and current account deficit and stoke fuel price inflation.
Foreign portfolio investors (FPIs) sold shares worth a net Rs 830.94 crore yesterday, 17 May 2018 as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 428.92 crore yesterday, 17 May 2018, as per provisional data.
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Domestic stocks drifted lower in early trade. Stocks continued to trade with weakness in in morning trade. Key benchmark indices traded in a small range amid negative bias in mid-morning trade. Weakness persisted on the bourses in afternoon and mid-afternoon trade. Stocks extended fall and hit fresh intraday low in late trade.
The S&P BSE Mid-Cap index lost 1.47%. The S&P BSE Small-Cap index lost 1.62%. Both these indices underperformed the Sensex.
The market breadth, indicating the overall health of the market, was weak. On the BSE, 759 shares rose and 1,859 shares fell. A total of 140 shares were unchanged.
Wipro (down 3.3%), ICICI Bank (down 3.21%) and Tata Motors (down 3.14%) were the top Sensex losers.
Bajaj Auto lost 1.48%. Bajaj Auto's consolidated profit after tax rose 36% to Rs 1175 crore on 30% rise in turnover to Rs 7140 crore in Q4 March 2018 over Q4 March 2017. Earnings before interest, taxation, depreciation and amortization (EBITDA) rose 36% to Rs 1431 crore. EBITDA margin fell to 20.9% in Q4 March 2018 from 21.2% in Q4 March 2017. The result was declared during market hours today, 18 May 2018.
Index heavyweight and engineering & construction major L&T dropped 3.18%. L&T during market hours today, 18 May 2018 said that the Heavy Civil Infrastructure business of L&T Construction has bagged orders worth Rs 1504 crore. The business has won a marine infrastructure project of national importance by securing an order from the Cochin Shipyard for part design and construction of a Dry Dock along with associated works.
L&T GeoStructure has received an order from the Kalinga International Coal Terminal Paradip for construction of piling, diaphragm wall and berth deck at Paradip Port, Odisha.
Drug major Sun Pharmaceutical Industries dropped 3.21%. The company announced that one of its wholly-owned subsidiaries has launched in US, the Authorized Generic (AG) version for Daiichi Sankyo Inc.'s Welchol (colesevelam hydrochloride) 625mg tablets. The launch is pursuant to a distribution and supply agreement between Sun Pharma's wholly owned subsidiary and Daiichi Sankyo Inc., which grants the Sun Pharma subsidiary, exclusive rights to distribute these tablets in the US for a pre-determined period. Welchol Tablets recorded US sales of approximately $520 million for the 12 months ending March 2018, as per IQVIA. The announcement was made after market hours yesterday, 17 May 2018.
The UN World Economic Situation and Prospects (WESP) as of mid-2018, said GDP growth in India is expected to climb to 7.5 and 7.6% in fiscal years 2017-18 and 2018-19 respectively, as robust private consumption and benefits from past reforms help the country's GDP gain momentum but sustained recovery in private investment remains a crucial challenge. This is a substantial recovery from the 6.7% growth India registered in fiscal year 2017, according to a UN report.
Among the major economies, growth in India is gaining momentum, underpinned by robust private consumption, a slightly more supportive fiscal stance and benefits from past reforms, the report said.
Overseas, European shares were trading lower as concerns over geopolitics and trade intensified. Most Asian stocks were trading higher as investors appeared to be readjusting their expectations about trade negotiations between the US and China.
As high-level meetings between the world's two largest economies were being conducted in Washington, President Donald Trump kept expectations low, reportedly saying that China had become spoiled and that he doubted negotiations would be successful.
The three main US equity benchmarks finished lower yesterday, 17 May 2018 as selling in technology shares offset an advance in the energy sector. In US economic data, initial jobless claims rose by 11,000 to 222,000 in the latest week, the highest level in a month. The Philadelphia Fed manufacturing index came in at 34.4 in May.
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