A bout of volatility was witnessed as key benchmark indices sharply pared losses after hitting fresh intraday low in afternoon trade. At 13:20 IST, the barometer index, the S&P BSE Sensex, fell 38.24 points or 0.12% at 33,014.80. The Nifty 50 index declined 12.20 points or 0.12% at 10,180.75. The Sensex was trading above the 33,000 level after skidding below that level in mid-morning trade.
After a positive start, key indices traded within a narrow range around the flat line till morning trade. Indices recovered sharply after hitting fresh intraday low in afternoon trade. Investors digested the US Federal Reserve's decision of raising interest rates for the third time this year, underlining the confidence that the United States remains on solid footing. Higher interest rates in the US may drain liquidity from the emerging markets, including India, and redirect it to developed economies.
The Sensex fell 166.11 points, or 0.50%, at the day's low of 32,886.93 in afternoon trade, its lowest level since 7 December 2017. The index rose 116.70 points, or 0.35%, at the day's high of 33,169.74 in early trade. The Nifty lost 51.40 points, or 0.50%, at the day's low of 10,141.55 in afternoon trade, its lowest level since 7 December 2017. The index advanced 37.70 points, or 0.36%, at the day's high of 10,230.65 in early trade.
Among secondary indices, the S&P BSE Mid-Cap index fell 0.31%. The S&P BSE Small-Cap index declined 0.70%. Both the indices underperformed the Sensex.
The broad market depicted weakness. There were more than two losers against every gainer on BSE. On the BSE, 1,709 shares declined and 781 shares rose. A total of 145 shares were unchanged.
Most pharmaceutical shares declined. Strides Shasun (down 2.07%), Aurobindo Pharma (down 1.11%), Sun Pharmaceutical Industries (down 0.75%), IPCA Laboratories (down 0.59%), Cadila Healthcare (down 0.5%), GlaxoSmithKline Pharmaceuticals (down 0.42%), Piramal Enterprises (down 0.28%), Glenmark Pharmaceuticals (down 0.19%) and Alkem Laboratories (down 0.04%), edged lower. Cipla (up 0.01%), Lupin (up 0.36%), Divi's Laboratories (up 0.52%), Dr Reddy's Laboratories (up 1.74%) and Wockhardt (up 3.42%), edged higher.
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Power generation stocks declined. Jaiprakash Power Ventures (down 4.02%), Torrent Power (down 2.34%), JSW Energy (down 2.32%), CESC (down 2.24%), Reliance Infrastructure (down 2.07%), GMR Infrastructure (down 2.05%), Adani Power (down 1.18%), NTPC (down 1.05%), Reliance Power (down 0.97%), NHPC (down 0.87%) and Tata Power (down 0.66%), edged lower.
State-run Power Grid Corporation of India was down 0.75%. State-run Coal India was up 0.08%.
On the macro front, India's inflation based on the wholesale price index (WPI), stood at 3.93% for the month of November 2017 as compared to 3.59% for the previous month and 1.82% during the corresponding month of the previous year. The inflation data was released by the government during market hours today, 14 December 2017.
Among other news, the second phase of polling in Gujarat is underway today, 14 December 2017 in 93 assembly constituencies. Counting of votes will take place on 18 December 2017. Gujarat recorded a polling of 68% in the first phase of assembly elections for 89 assembly constituencies held on 9 December 2017. The Gujarat assembly has 182 seats.
Overseas, most Asian stocks declined. US stocks rose yesterday, 13 December 2017, with the Dow posting a record closing, after the Federal Reserve hiked interest rates. Investors also digested news of Congressional leaders reaching a tentative agreement on a tax overhaul plan.
The Fed raised interest rates by a quarter point after the conclusion of its two-day policy meeting yesterday, 13 December 2017, in a move that was widely expected by markets. That increased the central bank's target range to between 1.25% and 1.5%. The Fed also raised its GDP forecast from 2.1% to 2.5%. Its inflation forecast was raised from 1.6% to 1.7%.
In Europe, a meeting of the European Central Bank (ECB) is scheduled today, 14 December 2017, to announce its interest rate decision. The ECB held its benchmark refinancing rate at 0% on 26 October, as widely expected, and decided to reduce its quantitative easing programme to a monthly pace of 30 billion from January with the option of extending it in September 2018.
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