Pharma stocks and index heavyweights HDFC and ITC led losses as the two key benchmark indices snapped two-day winning streak. The barometer index, the S&P BSE Sensex, lost 247.92 points or 1% at 24,556.36, as per the provisional closing data. The 50-unit Nifty 50 index dropped 74.95 points or 0.99% at 7,463.80, as per the provisional closing data. The decline on the domestic bourses mirrored a slide in global stocks.
The Sensex dropped 287 points or 1.15% at the day's low of 24,517.28 in late trade, its lowest level since 10 March 2016. The barometer index rose 36.49 points or 0.14% at the day's high of 24,840.77 at the onset of the trading session. The Nifty shed 85.95 points or 1.14% at the day's low of 7,452.80 in late trade, its lowest level since 10 March 2016. The index rose 6.45 points or 0.08% at the day's high of 7,545.20 at the onset of the trading session.
The market breadth indicating the overall health of the market was weak. On BSE, 1,630 shares fell and 843 shares rose. A total of 151 shares were unchanged. The BSE Mid-Cap index provisionally fell 0.79%. The BSE Small-Cap index provisionally declined 0.62%. The decline in both these indices was lower in percentage terms than the Sensex's decline.
In overseas stock markets, European stocks declined as investors remained cautious ahead of the outcome of US Federal Reserve's monetary policy meeting. The Federal Reserve's two-day monetary policy meeting begins today, 15 March 2016. Federal Reserve officials are likely to hold short-term interest rates steady at its policy meeting amid uncertainties about global financial markets and global growth. The Fed in December 2015 raised its benchmark federal-funds rate from near zero to a range between 0.25% and 0.5%.
Earlier during the global day, Asian stocks edged lower as investors braced for a run of policy announcements from the world's major central banks this week and after the Bank of Japan held policy steady as expected. Japan's Nikkei Average settled 0.68% lower. At the conclusion of a two-day monetary policy meeting today, 15 March 2016, the Bank of Japan (BOJ) maintained its commitment to raise the monetary base by 80 trillion yen annually and decided to continue applying a negative interest rate of minus 0.1% to the policy-rate balances in current accounts held by financial institutions at the bank. If needed, additional easing steps will be taken to hit 2% inflation, the BOJ said. BOJ had stunned markets in January by adopting negative rates.
The total turnover on BSE amounted to Rs 2358 crore, lower than turnover of Rs 4253.37 crore registered during the previous trading session.
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Index heavyweight and housing finance major HDFC edged lower on media reports that a foreign brokerage has downgraded the stock to sell from neutral. The stock shed 3.46% at Rs 1,116. The foreign brokerage reportedly said that structural changes may dampen HDFC's profitability and its core business is likely to be pressured. HDFC may now have structurally lower growth and core return on assets (ROAs) will decline further, the foreign brokerage reportedly said.
Pharma stocks declined. Aurobindo Pharma (down 3.17%), Cipla (down 2.24%), Dr Reddy's Laboratories (down 3.12%), Cadila Healthcare (down 3.31%), Divi's Laboratories (down 5.1%), Alkem Laboratories (down 0.28%), Glenmark Pharmaceuticals (down 1.46%) and Sun Pharmaceutical Industries (down 2.49%) declined.
Lupin tumbled 7.68% after the company clarified during trading hours today, 15 March 2016, that the United States Food and Drug Administration (USFDA) inspected its Goa facility last week and cited 9 observations. The observations are on aspects such as inadequacy and adherence to Standard Operating Procedures (SOPs). Lupin said that it is in the midst of putting together a response to address the USFDA's observations. The company issued the clarification after media reports suggested that the USFDA cited nine observations in its inspection of the company's Goa facility last week.
Procter & Gamble Hygiene and Health Care dropped 1.1% after the company announced that it has discontinued the manufacture and sale of its OTC drug Vicks Action 500 Extra with immediate effect. The decision to discontinue the manufacture and sale of the drug was made after the Government of India vide its gazette notification on 10 March 2016 prohibited manufacturing, selling and distributing fixed dose combination drugs (Paracetamol + Phenylephrine + Caffeine) with immediate effect. Vicks Action 500 Extra has the same fixed dose combination and gets covered under the notification, Procter & Gamble Hygiene and Health Care said. The company said that all Vicks products, including Vicks Action 500 Extra, are backed by research to support quality, safety and efficacy.
On the macro front, the latest data showed that inflation based on the consumer price index (CPI) dipped to four month low of 5.18% in February 2016 from 5.69% in January 2016. The decline was due to easing of food price inflation. The Consumer Food Price index (CFPI) eased sharply to 5.3% in February 2016 from 6.85% in January 2016. The core CPI inflation rose to 4.77% in February 2016 from 4.5% in January 2016.
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