Key benchmark indices saw a gap-down opening on negative Asian stocks. At 9:29 IST, the barometer index, the S&P BSE Sensex was down 180.77 points or 0.68% at 26,545.57. The Nifty 50 index was currently down 53.85 points or 0.66% at 8,152.75.
In overseas markets, Asian stocks dropped as investors digested the US Federal Reserve's decision to keep interest rates on hold. In Japan, the Nikkei 225 index was currently down 2.13% after the Bank of Japan (BoJ) kept monetary policy steady as was widely expected. At the end of a two-day monetary policy review, the BoJ said it will continue to conduct money market operations so the monetary base increases at an annual pace of 80 trillion yen ($760 billion) and maintain a negative interest rate of minus 0.1% to the policy-rate balances in current accounts held by financial institutions at the bank. The BoJ said in a statement that the economy continued its moderate recovery trend, citing steady improvement in business fixed investment, employment and housing investment.
In mainland China, the Shanghai Composite index was currently down 0.06%. In Hong Kong, the Hang Seng index was currently down 1.77%. US stocks ended lower yesterday, 15 June 2016, marking a fifth session of losses, after the US Federal Reserve left interest rates unchanged and backed off an aggressive stance on future rate hikes.
The US Federal Reserve after a conclusion of two-day meeting yesterday, 15 June 2016, left interest rates unchanged and signaled it's likely to take an even slower approach on raising the cost of borrowing against a backdrop of slower US job creation and fresh worries about economic events abroad. The Fed trimmed its estimate of US growth in 2016 to 2% from 2.2%, but left its long-run forecast intact. The Fed also tempered its future expectations for the economy. The central bank indicated it will raise rates three times apiece in 2017 and 2018 instead of four. And in the long run, the FOMC predicts the Fed-funds rate would rise to 3% instead of 3.3%. Fed officials also expect the labor market to show more improvement, with the unemployment rate remaining below 5% for the next three years.
Yellen also expressed concern in a press conference after the Fed meeting about the low level of US business investment and said that vulnerabilities in the global economy remain. She acknowledged the pending UK vote on 23 June 2016, known as Brexit, on whether to leave the European Union was a factor in the Fed's decision to stay its hand.
Closer home, the market breadth indicating the overall health of the market was negative. On BSE, shares 628 shares declined and 577 shares rose. A total of 59 shares were unchanged. The BSE Mid-Cap index was currently off 0.21%. The BSE Small-Cap index was currently off 0.02%. The fall in both these indices was lower than the Sensex's decline in percentage terms.
NTPC slipped 0.42%. Coal India fell 0.58%. NTPC said that pursuant to joint venture agreement dated 16 May 2016 signed with Coal India, a Joint Venture Company in the name of "Hindustan Urvarak & Rasayn Limited", with 50:50 shareholding by NTPC and Coal India has been incorporated on 15 June 2016. The joint venture company will take up revival of Gorakhpur and Sindri plants of Fertilizer Corporation of India by setting up ammonia urea plants at each locations.
Wipro shed 0.7%. Wipro announced the launch of its analytics solution, Data Discovery Platform. The solution provides pertinent business insights across the value chain of an industry through the predefined apps. The platform will enable businesses to embark on an analytics journey with value added services of process simplification and business transformation. The announcement was made after market hours yesterday, 15 June 2016.
Cement stocks were mixed. Ambuja Cements (down 0.25%) and UltraTech Cement (down 1.07%) fell. Shree Cement (up 0.37%) and ACC rose 0.29%) rose.
Grasim Industries was off 0.4% at Rs 4,306.50. Grasim has exposure to the cement sector through its holding in UltraTech Cement.
On the macro front, India's merchandise exports fell 0.79% at $22.17 billion in May 2016 over May 2015. Non-petroleum exports rose 1.01% at $20.19 billion in May 2016 over May 2015. Imports fell 13.16% at $28.44 billion in May 2016 over May 2015. Oil imports fell 30.45% at $5.93 billion. Non-oil imports fell 7.06% at $22.50 billion. The trade deficit fell to $6.27 billion in May 2016 from $10.41 billion in May 2015. The commerce ministry released the trade data on provisional basis for May 2016 after trading hours yesterday, 15 June 2016.
Powered by Capital Market - Live News
