The Sensex and the Nifty pared gains after hitting fresh record highs in afternoon trade. At 13:35 IST, the barometer index, the S&P BSE Sensex rose 109.43 points or 0.26% at 41,461.60. The Nifty 50 index gained 27.30 points or 0.22% at 12,193.65.
The broader market reeled under selling pressure. The S&P BSE Mid-Cap index was down 0.53%. The S&P BSE Small-Cap index fell 0.13%.
The market breadth favored the sellers. On the BSE, shares 1,048 rose and 1,260 shares fell. A total of 169 shares were unchanged.
On economic front:
The International Monetary Fund (IMF) will significantly lower India's growth forecast from the earlier number of 6.1% for FY20 on 20 January 2020, given the fall in consumption, lack of private investments and sluggish exports.
As late as October, IMF had forecast India growing at 6.1% for 2019 and 7% for the next year. But looking at recent incoming data, we will be revising the numbers and it will be a significant downward revision, IMF chief economist Gita Gopinath said on Tuesday.
India's gross domestic product (GDP) grew 4.5% in Q2 September 2019, the lowest since Q4 March 2013.
Meanwhile, Finance Minister Nirmala Sitharaman will chair the 38th goods and services tax (GST) Council meeting today, 18 December 2019. Investors are keenly waiting for the outcome of the meeting to get any cues on the government's plan to overcome revenue shortfall. Concerns on fiscal path may influence government to hike tax slabs.
Top Gainers & Losers:
Mahindra & Mahindra (up 2.86%), JSW Steel (up 2.28%), ITC (up 2.24%), HDFC Bank (up 1.85%) and Tata Steel (up 1.68%) advanced.
GAIL (India) (down 2.17%), Grasim Industries (down 1.81%), State Bank of India (down 1.74%), Yes Bank (down 1.37%) and Bharat Petroleum Corporation (down 1.15%) declined.
Stocks in Spotlight:
IT major TCS rose 1.15%. TCS said it has been selected by Petco, America's leading pet specialty retailer, to deploy TCS Optumera, an Al-powered merchandise optimization suite.
Zee Entertainment Enterprise (ZEEL) was down 0.70% after credit rating agency, Brickwork Ratings India, downgraded the company's cumulative redeemable non-convertible preference shares & the issuer rating.
Telecom major Bharti Airtel was down 0.58%. According to media reports, India's telecom operators will continue to pay cross-network call charges for another year that would eventually benefit two incumbent operators, i.e. Bharti Airtel and Vodafone Idea. As per TRAI guidelines, the interconnect use charge of Rs 0.06 per minute will now stay till Thursday, 31 December 2020 for domestic calls.
Index heavyweight HDFC rose 0.77%. The company's board approved re-appointment of Renu Sud Karnad as the managing director of the corporation with effect from 1 January 2020 till 2 September 2022 and V. Srinivasa Rangan as a whole-time director (designated as 'executive director') of the corporation for a period of 5 years with effect from 1 January 2020.
Hindustan Unilever (HUL) declined 2.44% after a foreign brokerage house reportedly maintained a 'neutral' rating on the stock while slashing the target market price to Rs 2,150 per share from Rs 2,180 per share. The brokerage firm stated that the reduced earnings estimates by 1-2% after its parent company 'Unilever' cut its growth guidance, primarily due to India's economic slowdown.
Dr Reddy's Laboratories gained 1.15% after a foreign brokerage firm reportedly maintained an 'outperform' call on the stock while setting a target price at Rs 3,055 per share. According to the brokerage firm, the pharmaceutical company's product, Revlimid litigation is delayed and the trial is now expected to begin in Q2FY21. Revlimid has a potential of adding more than $500 million net present value (NPV) even in the worst case.
Foreign Markets:
European shares were trading mixed as investor caution returned following U.K. Prime Minister Boris Johnson's vow to block an extension of EU trade talks beyond 2020, reviving fears of a "cliff-edge" Brexit.
A cliff-edge Brexit would immediately remove Britain from the single market, meaning it would lose its privileges for free movement of goods, services, capital and people with the member states of the European Union.
Asian shares were mixed amid profit booking after recent rally triggered by a recent phase one trade deal reached between Beijing and Washington.
In US, stock indexes closed at records again on Tuesday supported by positive economic data and relief over a truce in President Trump's trade war with China.
In US economic data, home builders increased new construction at an annual pace of 1.365 million in November, an increase of 3.2% from October's pace and a 13.6% increase on a year ago. Industrial production rose 1.1% in November, the largest monthly increase in two years, but is down 0.8% for the past year.
The US reportedly said China agreed to increase imports of goods in 2020 and 2021 by a total of $200 billion more than the total in 2017, including about $40 billion of US farm goods. The deal also included Chinese action to protect American intellectual property and vague assurances not to manipulate its currency.
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