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Extending declines for the fifth trading day, the benchmak indices settled Tuesday's session lower led by losses in financial, telecom and pharma stocks. Mixed trend seen in global markets following Federal Reserve Chairwoman Janet Yellen's speech and Bank of Japan's monetary policy meeting along with deadly incidents in Germany and Turkey also impacted sentiment.
The S&P BSE Sensex ended at 26,307, down 67 points, while the broader Nifty50 closed at 8,082, down 22 points.
Broader market underperformed the headline indices. BSE Midcap and BSE Smallcap finished 1.40% and 0.92% lower, respectively.
Market breadth depicted weakness. There were two losers against every gainer on BSE. 1,756 shares fell and 850 shares rose. A total of 147 shares were unchanged.
Experts believe the withdrawal of funds by foreign institutional investors and lacklustre market activity at the year-end could see the indices trade in a small range throughout the month.
Meanwhile, the rupee late on Tuesday pared all its initial gains to breach 68-mark against US dollar. The currency hit its two-week low to slip 15\8 paise versus greenback after opening higher in the early trade. On Monday, it had lost 11 paise to end at 67.87.
"Under this lackluster scenario, midcaps were the most affected due to the extended impact of slowdown in the economy. The optimism in Yellen's speech on US job market and unwinding of FII inflows is keeping emerging markets less attractive," said Vinod Nair, Head of Research, Geojit BNP Paribas Financial Services.
"Under this lackluster scenario, midcaps were the most affected due to the extended impact of slowdown in the economy. The optimism in Yellen's speech on US job market and unwinding of FII inflows is keeping emerging markets less attractive," said Vinod Nair, Head of Research, Geojit BNP Paribas Financial Services.
Sectors and stocks
Telecom stocks declined inline with the subdued market sentiment. Idea Cellular (down 3.48%), Reliance Communications (down 2.08%) and Bharti Airtel (down 0.70%) edged lower.
BSE Bankex lost 1.20%, led by losses in YES Bank (down 2.78%), SBI (down 2.62%), Bank of Baroda (down 2.29%) and PNB ( down 2.25%).
BSE Bankex lost 1.20%, led by losses in YES Bank (down 2.78%), SBI (down 2.62%), Bank of Baroda (down 2.29%) and PNB ( down 2.25%).
Tata Group stocks were in focus after ousted Tata Sons chairman Cyrus Mistry quit from the boards of these six Tata companies.
TCS and Tata Power gained over 2% on the BSE in the late morning deals. TCS was the top Sensex gainer and added as much as 2.38% to Rs 2343 on BSE. Tata Power surged 2.71% to Rs 79.35. Tata Steel, however, slumped over 1% to Rs 405, while Tata Chemicals, Tata Steel and Indian Hotels ended flat.
TCS and Tata Power gained over 2% on the BSE in the late morning deals. TCS was the top Sensex gainer and added as much as 2.38% to Rs 2343 on BSE. Tata Power surged 2.71% to Rs 79.35. Tata Steel, however, slumped over 1% to Rs 405, while Tata Chemicals, Tata Steel and Indian Hotels ended flat.
IT stocks advanced on relatively brighter outlook for the US economy. BSE IT index (up 0.95%) was the top sectoral gainer.
Yellen's speech at Baltimore
In her first speech after raising interest rates for only the second time this decade, Yellen said the US has the strongest jobs market in nearly a decade, and there are indications wage growth is picking up. But Yellen also noted the economy is growing more slowly than in past recoveries and productivity growth has been disappointing. She spoke at a University of Baltimore commencement ceremony late on Monday.
Bank of Japan’s policy decision
The BOJ maintained the 0.1% interest it charges on a portion of excess reserves that financial institutions park with the central bank. Japan's economy is projected to grow 1.5% in inflation-adjusted terms in the fiscal year starting in April, thanks to a gradual uptick in the global economy and a recent weakening of the yen against the dollar.
Global markets
European shares rose as tensions eased after the assassination of Russia’s ambassador to Turkey and the Bank of Japan boosted its assessment of the world’s third-largest economy.
The Stoxx Europe 600 Index rose to the highest level in a year, while CAC 40 was up 0.30%. Japan's Nikkei, flat before the BoJ decision, ended the day up 0.5%.
China's CSI 300 index slid 0.6%, as Beijing's move to tighten supervision of shadow banking activities and persistent liquidity concerns restrained risk appetite. Hong Kong stocks dropped 0.5%.
(With inputs from Reuters)
