Stocks of public sector banks and index heavyweights HDFC and Infosys led losses for the two key benchmark indices. The barometer index, the S&P BSE Sensex, fell 84.45 points or 0.33% to 25217.45, as per the provisional closing data. The losses for the Sensex were higher in percentage terms than those for the Nifty 50 index. The Nifty fell 18.65 points or 0.24% to 7,731.05, as per the provisional closing data. High volatility was witnessed during the second half of the trading session. After extending gains in mid-afternoon trade, the two key benchmark indices slipped into the red later.
Volatility in European stocks triggered volatility on the domestic bourses. European stocks edged lower in volatile trade after the latest data showed slowdown in economic activity in the eurozone in this month.
The Sensex fell 94.12 points, or 0.37% at the day's low of 25,207.78 in late trade, its lowest level since 6 May 2016. The barometer index jumped 217.36 points, or 0.86% at the day's high of 25,519.26 in early trade, its highest level since 19 May 2016. The Nifty fell 27.50 points, or 0.35% at the day's low of 7,722.20 in late trade, its lowest level since 6 May 2016. The Nifty rose 70.90 points, or 0.91% at the day's high of 7,820.60 in early trade, its highest level since 19 May 2016.
The market breadth indicating the overall health of the market was negative. On BSE, 1,500 shares fell and 1,083 shares rose. A total of 176 shares were unchanged. The BSE Mid-Cap index provisionally fell 0.29%. The decline in this index was lower than the Sensex's decline in percentage terms. The BSE Small-Cap index provisionally fell 0.38%. The decline in this index was higher than the Sensex's decline in percentage terms.
The total turnover on BSE amounted to Rs 2075 crore, lower than turnover of Rs 2495.19 crore registered during the previous trading session.
In overseas stock markets, European stocks edged lower in volatile trade after the latest data showed slowdown in economic activity in the eurozone in this month. Data provider Markit said a headline measure of activity based on surveys of 5,000 companies around the eurozone, known as the composite purchasing managers index, fell to 52.9 in May from 53 in April. A reading above 50 indicates an increase in activity, while a reading below that level indicates a decline. Earlier during the global day, Asian stocks ended on a mixed note.
US stocks edged higher during the previous trading session on Friday, 20 May 2016, after strong housing data for April 2016. Existing-home sales rose 1.7% in April 2016 to a seasonally adjusted annual rate of 5.45 million, the National Association of Realtors said. Meanwhile, Boston Fed President Eric Rosengren said in an interview to a newspaper published yesterday, 22 May 2016, that the US economy is close to displaying most of the conditions needed for an interest-rate rise next month. Two weeks ago, he said rate increases should resume.
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The minutes from the US Federal Reserve's April policy meeting released last week showed that Fed policy setters discussed the possibility of a June rate increase if the economy continued to strengthen. The Federal Open Market Committee next undertakes monetary policy review on 14-15 June 2016. The US central bank had lifted rates in December 2015 for the first time in nearly a decade.
Index heavyweight and housing finance major HDFC fell 1.86% to Rs 1,158.10. The stock hit a high of Rs 1,184 and a low of Rs 1,158.10 in intraday trade.
Index heavyweight and IT major Infosys fell 1.06% to Rs 1,189. The stock hit a high of Rs 1,204.40 and a low of Rs 1,185.55 in intraday trade.
Index heavyweight and cigarette major ITC rose 5.53% to Rs 348.20, with the stock extending previous trading session's gains triggered by the company announcing a 1:2 bonus share issue at the fag end of the trading session at the time of the announcement of its Q4 March 2016 results. The stock was volatile. The scrip hit high of Rs 354.75 and low of Rs 339.75 in intraday trade. ITC's net profit rose 5.67% to Rs 2495.20 crore on 9.49% rise in total income to Rs 10580.33 crore in Q4 March 2016 over Q4 March 2015. A foreign brokerage has reportedly raised its price target while retaining its outperform rating on the ITC stock as it views the turnaround in ITC's cigarette volume growth as a significant positive.
Bharat Heavy Electricals (Bhel) edged lower and Power Grid Corporation of India edged higher after the Bombay Stock Exchange (BSE) announced changes in the constituents of its indices as part a semi-annual reconstitution of the indices. Bhel fell 0.42% and Power Grid Corporation of India rose 2.63%. Power Grid Corporation of India will replace Bhel in Sensex with effect from 20 June 2016.
National Aluminium Company (Nalco) rose 3.58% to Rs 41.90 after the company said that a meeting of the board of directors of the company will be held on 25 May 2016 to consider the proposal for buyback of equity shares of the company. The announcement was made after market hours on Friday, 20 May 2016.
Dish TV India edged lower in volatile trade after the company announced its Q4 March 2016 results. The stock fell 5.82% to Rs 88.25. Dish TV India's (Dish TV) consolidated net profit rose 1281.71% to Rs 482.77 crore on 10.08% growth in total income to Rs 821.15 crore in Q4 March 2016 over Q4 March 2015. The company's subscription revenue rose 12.6% to Rs 741 crore in Q4 March 2016 over Q4 March 2015. Earnings before interest, taxation, depreciation and amortization (EBITDA) rose 18.1% at Rs 260.80 crore in Q4 March 2016 over Q4 March 2015. The results for Q4 March 2016 and the financial year ended 31 March 2016 (FY 2016) are not comparable with their corresponding previous periods due to the impact of increase in service tax to 14.5%, from 12.36%, with effect from August 2015.
Meanwhile, Reserve Bank of India Governor Dr. Raghuram Rajan said in a speech on Saturday, 21 May 2016, that with a view to limit external vulnerabilities arising from the easy and unconventional monetary policy in industrial countries, India is taking measures to control capital inflows, intervening in the foreign exchange market as a macro prudential measure to reduce volatility and maintaining sufficient foreign exchange reserves to be able to withstand a sudden stop in capital inflows. Rajan said that good economic policy is the first line of defence - including the focus on controlling fiscal deficit, reforms like the Bankruptcy Code and Aadhaar and the steady fight against inflation.
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