Volatility ruled the roost as the two key benchmark indices extended losses after staging a recovery from lower level in early afternoon trade. At 14:16 IST, the barometer index, the S&P BSE Sensex, was down 227.31 points or 0.88% at 25,477.30. The Nifty 50 index was currently down 68.15 points or 0.87% at 7,802. Weakness in global stocks weighed on the domestic bourses. World 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 249.66 points or 0.97% at the day's low of 25,454.95 in mid-afternoon trade, its lowest level since 16 May 2016. 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 73.50 points or 0.93% at the day's low of 7,796.65 in mid-afternoon trade, its lowest level since 16 May 2016. The index rose 6.05 points or 0.07% at the day's high of 7,876.20 at the onset of trading session.
The market breadth indicating the overall health of the market was negative. On BSE, 1,366 shares fell and 1,034 shares rose. A total of 197 shares were unchanged. The BSE Mid-Cap index was currently down 0.56%. The BSE Small-Cap index was currently down 0.25%. The fall in both these indices was lower than the Sensex's decline in percentage terms.
In overseas stock markets, Asian and European 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. Expectations of a rate hike soared after the release of the minutes yesterday, 18 May 2016. The Fed funds futures market is now pricing in a roughly 34% chance of a rate hike at the Federal Open Market Committee's (FOMC) next monetary policy meeting on 14-15 June 2016. Ahead of the release of the minutes, futures prices had indicated a June rate hike was unlikely. The US central bank had lifted rates in December 2015 for the first time in nearly a decade.
Pharma stocks declined. Dr Reddy's Laboratories (down 0.14%), Sun Pharmaceutical Industries (down 0.26%), Alkem Laboratories (down 0.58%), GlaxoSmithKline Pharmaceuticals (down 0.47%), Aurobindo Pharma (down 0.68%) and Wockhardt (down 1.52%) declined. Cadila Healthcare (up 1.66%) and Cipla (down 0.99%) rose.
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Pharma major Lupin rose 1.87% ahead of its Q4 March 2016 earnings today, 19 May 2016.
Glenmark Pharmaceuticals rose 1.56% after the company said it received final approval by the US health regulator to sell Rufinamide, which is used to treat seizures caused by Lennox-Gastaut syndrome. The announcement was made before trading hours today, 19 May 2016. Glenmark Pharmaceuticals Inc., USA (Glenmark) has been granted final approval by the United States Food & Drug Administration (USFDA) for its Rufinamide Tablets USP, 200 milligram (mg) and 400 mg, a therapeutic equivalent of Banzel Tablets, 200 mg and 400 mg of Eisai, Inc. Glenmark is eligible for 180 days of shared generic drug exclusivity for Rufinamide Tablets USP, 200 mg and 400 mg. According to IMS Health sales data for the 12 month period ended March 2016, the Banzel markets achieved annual sales of approximately $155.1 million in the US market.
Power generation stocks declined. Adani Power (down 1.01%), JSW Energy (down 1.48%), Reliance Infrastructure (down 0.35%), CESC (down 0.97%), NTPC (down 0.59%), Torrent Power (down 12.08%), Reliance Power (down 0.05%) and NHPC (down 0.23%) edged lower. Jaiprakash Power Ventures rose 0.47%.
Tata Power Company shed 0.36%. The company during market hours today, 19 May 2016, announced that its 100% subsidiary Tata Power Renewable Energy (TPREL) has won two solar grid connected photovoltaic projects of 50 megawatts capacity each in Pavagada Solar Park in Karnataka. TPREL has received the Letter of Intent to develop the projects and will sign a 25-year power purchase agreement (PPA) with NTPC Vidyut Vyapar Nigam.
Shares of Parag Milk Foods were trading at Rs 248, a premium of 15.34% over the initial public offer price of Rs 215. The stock debuted at Rs 215.70, a premium of 0.33% over the initial public offer (IPO) price. So far, the stock hit a high of Rs 250 and low of Rs 215.70. On BSE, so far 36.45 lakh shares were traded on the counter. Parag Milk Foods is one of the leading manufacturers and marketers of dairy-based branded foods in India.
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 ruled the state 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 11 seats and was leading in 3 seats. The All India N.R. Congress won 8 seats and was leading in 1 seat as per results and leads for 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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