Selling intensified in early afternoon trade as key benchmarks extended losses and hit fresh intraday low. At 12:20 IST, the barometer index, the S&P BSE Sensex, was down 156.17 points or 0.45% at 34,692.13. The Nifty 50 index was down 55.90 points or 0.53% at 10,540.50.
After starting on a weak note, the market bounced back for a brief period in morning trade. Gains were unable to sustain at higher levels and the indices slipped into negative terrain in morning trade. Indices slipped further in early afternoon trade.
The Sensex rose 125.65 points, or 0.36% at the day's high of 34,973.95 in morning trade. The index fell 163.88 points, or 0.47% at the day's low of 34,684.42 in early afternoon trade. The Nifty rose 25.30 points, or 0.24% at the day's high of 10,621.70 in morning trade. The index fell 57.10 points, or 0.54% at the day's low of 10,539.30 in early afternoon trade.
Broader market witnessed selling pressure. Among secondary barometers, the BSE Mid-Cap index was down 1.25%. The BSE Small-Cap index was down 1.93%. Both these indices underperformed the Sensex.
The market breadth, indicating the overall health of the market, was weak. On BSE, 596 shares rose and 1823 shares fell. A total of 98 shares were unchanged.
Most cement shares declined. ACC (down 1.8%) and Ambuja Cements (down 1.37%), edged lower. UltraTech Cement was up 0.04%.
Grasim Industries was down 1.82%. Grasim has exposure to cement sector through its holding in UltraTech Cement.
Telecom shares were mixed. Reliance Communications (down 6.19%), MTNL (down 2.4%) and Tata Teleservices (Maharashtra) (down 1.8%), edged lower. Idea Cellular (up 0.48%) and Bharti Airtel (up 0.83%), edged higher.
Telecom tower infrastructure provider Bharti Infratel was up 1.54%.
On the political front, the much-awaited Karnataka floor test ended in an anti-climax of sorts with BS Yeddyurappa, who took oath as the Chief Minister on Thursday, 17 May 2018, resigned on Saturday, 19 May 2018, after he failed to secure the magic number of 112 required to form the government. Janata Dal (Secular) leader HD Kumaraswamy will now be sworn in as Chief Minister on Wednesday, 23 May 2018.
HD Kumaraswamy will reportedly be meeting former Congress president Sonia Gandhi and Congress president Rahul Gandhi in Delhi today, 21 May 2018, to discuss the modalities of government formation.
Overseas, most Asian shares were trading higher as weekend developments in the US-China trade relationship were digested by investors.
The US trade war with China is on hold after the world's largest economies agreed to drop their tariff threats while they work on a wider trade agreement, US Treasury Secretary Steven Mnuchin reportedly said on Sunday. Mnuchin and US President Donald Trump's top economic adviser, Larry Kudlow, said the agreement reached by Chinese and American negotiators on Saturday set up a framework for addressing trade imbalances in the future, reports added.
US stocks closed mostly lower on Friday, 18 May 2018, as investors grappled with lingering uncertainty over trade negotiations between the US and China, as well as bond yields that climbed this week to the highest level since 2011.
A focus for global markets this week is Wednesday's release of minutes from the Federal Reserve's latest monetary policy meeting. Investors will be watching the minutes for clues about the pace of the current tightening cycle.
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