A bout of volatility was witnessed as the two key benchmark indices trimmed losses in mid-morning trade. At 11:23 IST, the barometer index, the S&P BSE Sensex, was down 78.21 points or 0.3% at 25,626.40. The Nifty 50 index was currently down 25.80 points or 0.33% at 7,844.35. Weakness in global stocks weighed on the domestic bourses. Asian 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 149.19 points or 0.58% at the day's low of 25,555.42 in mid-morning trade. 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 43.95 points or 0.55% at the day's low of 7,826.20 in mid-morning trade. The index rose 6.05 points or 0.07% at the day's high of 7,876.20 at the onset of trading session.
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 been in power 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 4 seats and was leading in 4 seats. The All India N.R. Congress won 6 seats and was leading in 1 seat as per results and leads for 18 out of 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 today.
In overseas stock markets, Asian 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. The Federal Open Market Committee (FOMC) 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.
Closer home, the market breadth indicating the overall health of the market was positive. On BSE, 1,188 shares rose and 926 shares declined. A total of 133 shares were unchanged. The BSE Mid-Cap index was currently up 0.11%. The BSE Small-Cap index was currently up 0.43%. Both these indices outperformed the Sensex.
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Metal and mining stocks gained on renewed buying. JSW Steel (up 2%), Tata Steel (up 1.98%), Vedanta (up 0.76%), National Aluminium Company (up 0.48%), Hindustan Zinc (up 0.21%), Jindal Steel & Power (up 1.95%), Hindalco Industries (up 1.4%) and NMDC (up 0.49%) edged higher. Steel Authority of India (Sail) (down 0.71%) and Hindustan Copper (down 0.1%) fell.
Copper edged lower in the global commodities market. High Grade Copper for July 2016 delivery was currently off 1.08% at $2.056 per pound on the COMEX.
Realty stocks gained. DLF (up 1.02%), Indiabulls Real Estate (up 4.89%), Housing Development and Infrastructure (up 3.26%), D B Realty (up 2.6%), Godrej Properties (up 1.23%), Oberoi Realty (up 0.36%) gained. Sobha fell 0.57%.
Unitech lost 2.29% after the National Stock Exchange announced the removal of the stock from its futures & options segment. Futures & options (F&O) contracts for new expiry months in Unitech will not be issued, the National Stock Exchange (NSE) said in a circular issued after trading hours yesterday, 18 May 2016. The existing unexpired contracts of expiry months May 2016, June 2016 and July 2016 would continue to be available for trading till their respective expiry.
Sun TV Network dropped 11.23% to Rs 379.55 as trends and results in Tamil Nadu showed that All India Anna Dravida Munnetra Kazhagam (AIADMK) was leading and set to retain power in Tamil Nadu. AIADMK is a party led by J. Jayalalithaa. Chennai-based Sun TV Network owner, Kalalinithi Maran, is the grand nephew of M Karunanidhi, who heads the Dravida Munnetra Kazhagam (DMK), a Dravidian political party in the state of Tamil Nadu.
Castrol India declined 2.4% to Rs 376 on reports that its UK based foreign promoter Castrol Limited UK has put on the block 10.5% stake in the company at an indicative range of Rs 355-385.25 per share. Massive volumes were witnessed on the counter. On BSE, so far 6.42 crore shares were traded in the counter as against average daily volume of 1.10 lakh shares in the past one quarter. Castrol Limited UK held 70.92% stake in Castrol India as on 31 March 2016.
Tata Power Company rose 0.36% after the company 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.
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