A bout of volatility was witnessed as the barometer index, the S&P BSE Sensex, and the Nifty 50 index trimmed losses after both these indices hit their lowest level in almost two weeks. At 14:18 IST, the barometer index, the Sensex was down 175.49 points or 0.68% at 25,662.65. The Nifty was currently down 51.20 points or 0.65% at 7,848.10. Weakness in global stocks spoiled investors' sentiment.
The Sensex fell 232.80 points, or 0.9% at the day's low of 25,605.34 in mid-afternoon trade, its lowest level since 13 April 2016. The barometer index rose 52.89 points, or 0.2% at the day's high of 25,891.03 in early trade. The Nifty fell 69.55 points, or 0.88% at the day's low of 7,829.75 in mid-afternoon trade, its lowest level since 13 April 2016. The index rose 11.70 points, or 0.15% at the day's high of 7,911 in early trade.
The market breadth indicating the overall health of the market was weak. On BSE, 1,526 shares fell and 977 shares rose. A total of 137 shares were unchanged. The BSE Mid-Cap index was currently down 0.2%. The BSE Small-Cap index was currently down 0.34%. The decline in both these indices was lower than the Sensex's decline in percentage terms.
In overseas stock markets, European stocks fell amid declining oil prices and as German business sentiment deteriorated unexpectedly in April. The Ifo's business climate index slipped to 106.6 in April from 106.7 in March, bringing it further below levels seen at the end of last year. The Ifo's measure of the current business situation dropped to 113.2 in April from 113.8 in March, but its gauge of business expectations rose to 100.4 from 100 the previous month. The German economy is the Europe's biggest economy.
Asian shares edged lower as investors awaited central bank meetings in the United States and Japan this week. The Bank of Japan (BOJ) holds a two-day monetary policy meeting on Wednesday, 27 April 2016 and Thursday, 28 April 2016. Market participants are becoming more confident in their expectations of further easing from the Bank of Japan. The BOJ in January decided to begin charging 0.1% interest on some bank reserves parked with the institution, in a bid to kick-start the economy and pull it out of two decades of deflation.
US stocks finished mixed during the previous trading session on Friday, 22 April 2016, as earnings misses in the previous session from Microsoft and Google parent Alphabet slackened optimism on Wall Street. The US Federal Reserve holds a two-day policy meeting on Tuesday, 26 April 2016 and Wednesday, 27 April 2016. As per market expectations, the Fed is likely to hold rates steady this week and instead will opt to raise the federal funds rate by 25 basis points in its June meeting to 0.5-0.75% in what will be the second in its first series of rate rises in nearly a decade.
Stocks of public sector banks (PSU banks) dropped. Allahabad Bank (down 3.24%), Canara Bank (down 2.46%), Punjab and Sind Bank (down 2.37%), Union Bank of India (down 2.22%), Syndicate Bank (down 2.04%), IDBI Bank (down 1.93%), Bank of Baroda (down 1.92%), Bank of India (down 1.18%), Andhra Bank (down 1.15%), Dena Bank (down 1.14%), Corporation Bank (down 1.1%), Central Bank of India (down 0.87%), State Bank of India (down 0.58%), United Bank of India (down 0.5%), Bank of Maharashtra (down 0.49%), Vijaya Bank (down 0.47%) and Punjab National Bank (down 0.39%) edged lower.
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UCO Bank (down 2.45%) and Indian Overseas Bank (down 0.63%) edged lower after the National Stock Exchange (NSE) announced the removal of these two stocks from its futures & options segment.
Private sector banks were mixed. Axis Bank (down 1.5%), IndusInd Bank (down 0.48%), Yes Bank (down 0.18%), HDFC Bank (down 0.11%) and ICICI Bank (down 0.08%) edged lower. City Union Bank (up 0.42%), Kotak Mahindra Bank (up 0.63%) and Federal Bank (up 1.05%) edged higher.
Capital goods shares were mixed. Alstom T&D India (down 2.59%), Bharat Heavy Electricals (down 2.11%), Reliance Defence and Engineering (down 1.8%), Jindal Saw (down 1.44%), Siemens (down 1.3%), Punj Lloyd (down 1.25%), Suzlon Energy (down 1.08%), Praj Industries (down 1.07%), BEML (down 1.06%), AIA Engineering (down 0.42%) and Lakshmi Machine Works (down 0.08%), edged lower. SKF India (up 0.15%), Thermax (up 0.28%), Havells India (up 0.58%), Bharat Electronics (up 0.74%), Crompton Greaves (up 0.78%), ALSTOM India (up 0.87%) and ABB India (up 1.42%), edged higher.
Motherson Sumi Systems fell 4.56% after Volkswagen posted a 4.1 billion euros operating loss for 2015 in the wake of a diesel emissions test-rigging scandal. Volkswagen is a key client for Motherson Sumi Systems (MSSL). Media reports suggested that a foreign brokerage has retained its underperform rating on the MSSL stock, stating that a combination of likely pricing pressures from Volkswagen and its lower growth poses a risk to MSSL's aggressive growth targets.
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