Key benchmark indices pared losses on buying demand in index pivotals after an intraday slide. At 11:25 IST, the barometer index, the S&P BSE Sensex, was down 170.91 points or 0.48% at 35,373.03. The Nifty 50 index was down 57.50 points or 0.53% at 10,744.35. IT stocks gained as the rupee cracks below the 68 mark against the dollar. Domestic stocks fell tracking losses in US and Asian shares amid rising geopolitical tensions in the Korean peninsula.
Local stocks began trading for the day on a weak note on negative Asian stocks. Key benchmark indices extended early slide and hit fresh intraday low in morning trade.
The S&P BSE Mid-Cap index was down 0.26%. The S&P BSE Small-Cap index was down 0.2%. Both these indices outperformed the Sensex.
The market breadth, indicating the overall health of the market, was weak. On the BSE, 1,474 shares fell and 787 shares rose. A total of 110 shares were unchanged.
ICICI Bank (down 2.22%), Hero MotoCorp (down 2.1%) and SBI (down 1.63%) edged lower from the Sensex pack.
IT stocks gained as the rupee cracks below the 68 mark against the dollar on Karnataka cliffhanger. A weak rupee boosts revenue of IT firms in rupee terms as the sector derives a lion's share of revenue from exports.
Wipro (up 1.53%), TCS (up 0.42%), Oracle Financial Services Software (up 0.96%), Tech Mahindra (up 0.48%), MindTree (up 0.62%), Hexaware Technologies (up 1.74%) and Mphasis (up 0.95%) rose. Infosys (down 0.03%), HCL Technologies (down 0.21%) fell.
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In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 68.1050, compared with closing of 67.8050 during the previous trading session.
On the political front, Karnataka delivered a hung Assembly on Tuesday with no party getting a clear majority to form government in the state. While the Bharatiya Janata Party (BJP) emerged as the single-largest party, winning 104 seats, the Congress and the Janata Dal Secular (JDS) stood second and third with wins on 78 and 38 seats respectively. All eyes are now on Governor Vajubhai Vala as both the BJP and the post-poll combine of the Congress and the JDS have staked a claim to form the government.
Overseas, Asian stocks were trading lower as geopolitical developments and rising benchmark US yields spurred a return of risk aversion. North Korea canceled high-level talks with Seoul, denouncing military exercises between South Korea and the United States, breaking from several months of easing relations on the peninsula. This has also raised concerns about the planned summit between US President Donald Trump and his North Korean counterpart leader Kim Jong Un scheduled next month.
US stocks halted a four-day rally yesterday, 15 May 2018 with the steepest slide in almost two weeks as healthcare and tech shares retreated. Investors are weighing the prospect for higher Federal Reserve rates as strong US retail and factory data on Tuesday fueled bets the Fed may raise rates three more times this year.
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