The market declined for a fifth straight session as the political situation in Karnataka left investors uneasy. The barometer index, the S&P BSE Sensex, fell 232.17 points or 0.67% to 34,616.13, as per the provisional closing data. The Nifty 50 index fell 79.70 points or 0.75% to 10,516.70, as per the provisional closing data.
After starting on a weak note, the market bounced back for a brief period in morning trade. Gains were unable to sustain at higher levels and the indices slipped into negative terrain in morning trade. Indices slipped further and hit fresh intraday low in mid-afternoon trade.The Sensex rose 125.65 points, or 0.36% at the day's high of 34,973.95 in morning trade. The index fell 254.48 points, or 0.73% at the day's low of 34,593.82 in mid-afternoon trade, its lowest intraday level since 26 April 2018. The Nifty rose 25.30 points, or 0.24% at the day's high of 10,621.70 in morning trade. The index fell 90.60 points, or 0.86% at the day's low of 10,505.80 in mid-afternoon trade, its lowest intraday level since 23 April 2018.
Broader market witnessed selling pressure. Among secondary barometers, the BSE Mid-Cap index was down 1.64%. The BSE Small-Cap index was down 2.20%. Both these indices underperformed the Sensex.
The market breadth, indicating the overall health of the market, was weak. On BSE, 686 shares rose and 1974 shares fell. A total of 142 shares were unchanged.
Sun Pharmaceutical Industries (down 4.57%), Dr. Reddy's Laboratories (down 4.06%), Yes Bank (down 3.31%), Tata Motors (down 2.9%) and Bajaj Auto (down 2.4%), were the major Sensex losers.
State Bank of India (up 2.45%), Coal India (up 1.37%), TCS (up 1.33%), ICICI Bank (up 1.20%), ONGC (up 0.54%) and Reliance Industries (up 0.11%), were the major Sensex gainers.
On the political front, the much-awaited Karnataka floor test ended in an anti-climax of sorts with BS Yeddyurappa, who took oath as the Chief Minister on Thursday, 17 May 2018, resigned on Saturday, 19 May 2018, after he failed to secure the magic number of 112 required to form the government. Janata Dal (Secular) leader HD Kumaraswamy will now be sworn in as Chief Minister on Wednesday, 23 May 2018.
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HD Kumaraswamy will reportedly be meeting former Congress president Sonia Gandhi and Congress president Rahul Gandhi in Delhi today, 21 May 2018, to discuss the modalities of government formation.
BJP national president Amit Shah is reportedly expected to hold a press conference at 16:00 IST at the party headquarters in Delhi.
Overseas, most European and Asian shares rose as investors welcomed weekend news of an agreement between the US and China that could reduce the American trade deficit with the world's No. 2 economy.
The US trade war with China is on hold after the world's largest economies agreed to drop their tariff threats while they work on a wider trade agreement, US Treasury Secretary Steven Mnuchin reportedly said on Sunday. Mnuchin and US President Donald Trump's top economic adviser, Larry Kudlow, said the agreement reached by Chinese and American negotiators on Saturday set up a framework for addressing trade imbalances in the future, reports added.
US stocks closed mostly lower on Friday, 18 May 2018, as investors grappled with lingering uncertainty over trade negotiations between the US and China, as well as bond yields that climbed this week to the highest level since 2011.
A focus for global markets this week is Wednesday's release of minutes from the Federal Reserve's latest monetary policy meeting. Investors will be watching the minutes for clues about the pace of the current tightening cycle.
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