Key indices slumped in early trade as early leads of recently held assembly elections in Gujarat showed that there was a neck and neck fight between the incumbent BJP party and Congress party. At 9:20 IST, the barometer index, the S&P BSE Sensex, slumped 651.82 points or 1.95% at 32,754.11. The Nifty 50 index dropped 216.15 points or 2.09% at 10,117.10. The Sensex fell below the psychological 33,000 mark.
The election in Gujarat is seen as a prestige battle for both Prime Minister Narendra Modi and newly-elected Congress president Rahul Gandhi. For PM Modi, Gujarat being his home state makes it a must-win battle for the BJP. The BJP has been ruling in Gujarat for the last two decades and a win today will be significant ahead of the 2019 general elections.
The S&P BSE Mid-Cap index fell 2.1%. The S&P BSE Small-Cap index skidded 2.71%. Both these indices underperformed the Sensex.
The breadth, indicating the overall health of the market, was very weak. On the BSE, 1,467 shares fell and 206 shares rose. A total of 59 shares were unchanged.
Adani Ports & Special Economic Zone (down 4.96%), Bharti Airtel (down 3.94%) and ICICI Bank (down 2.88%) dropped.
Wipro dropped 1.85%. The company announced a partnership with Headspin, a San Francisco-based powerful, easy-to-use mobile experience platform, to offer next-generation mobility quality engineering and testing solutions on global mobile networks. Wipro Ventures, the strategic investment arm of Wipro that is focused on investing in early-to-mid-stage startups, made an investment in Headspin in October 2017. The announcement was made after market hours on Friday, 15 December 2017.
On the political front, counting of votes is underway for assembly elections held in Gujarat and Himachal Pradesh and leads showed and there was a neck and neck fight between the two leading parties in Gujarat. BJP was leading in 72 seats while Congress was leading in 70 seats in Gujarat. BJP was leading in 15 seats while Congress was leading in 7 seats in Himachal Pradesh. Results of both the states will be announced today, 18 December 2017.
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Poll in Himachal Pradesh took place in single phase on 9 November 2017, while in Gujarat, poll was scheduled in two phases on 9 and 14 December 2017.
On macroeconomic data front, India's merchandise exports surged 30.5% to $26.2 billion in November 2017 over a year ago. Meanwhile, merchandise imports increased 19.6% to $40.02 billion. The trade deficit rose 3.2% to $13.83 billion in November 2017 from US$ 13.01 billion in November 2016.
India's services exports improved 7.9% to $14.15 billion in October 2017 over October 2016. Meanwhile, India's services imports galloped 13.3% to $8.70 billion in October 2017. India's services trade surplus rose 0.3% to $5.45 billion in October 2017 from $5.43 billion in October 2016.
Overseas, Asian stocks were mixed. US stocks rose to all-time highs on Friday, 15 December 2017, as expectations of a Republican tax bill passing increased. The plan will likely cut the corporate tax rate to 21% from 35%.
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