Key benchmark indices languished in negative zone in mid-afternoon trade on prospects of higher interest rates in the United States. At 14:15 IST, the barometer index, the S&P BSE Sensex, was down 138.32 points or 0.54% at 25,634.11. The Nifty 50 index was currently down 43.20 points or 0.55% at 7,847.55. Prospects of higher interest rates in the United States weighed on the domestic bourses after the latest data showed that US consumer prices rose in April at their fastest pace in three years. Additionally, hawkish comments from US Federal Reserve officials yesterday, 17 May 2016, increased expectations that the US central bank will pick up the pace of rate rises during the current calendar year.
Investors in emerging markets, including India are worried that higher interest rates in the US will drain liquidity from emerging markets and redirect it to developed economies.
The Sensex dropped 270.21 points or 1.04% at the day's low of 25,503.40 in early afternoon trade, its lowest level since 16 May 2016. The barometer index fell 76.03 points or 0.39% at the day's high of 25,697.58 in afternoon trade. The Nifty lost 80 points or 1.01% at the day's low of 7,810.75 in early afternoon trade, its lowest level since 16 May 2016. The index fell 23.75 points or 0.3% at the day's high of 7,867 in afternoon trade.
In overseas stock markets, European stocks declined as comments from US Federal Reserve officials suggested a rate hike in the US could come sooner than expected. In Asia, Chinese stocks edged lower after Zhang Dejiang, the No. 3 official in the Chinese central government, made no mention today, 18 May 2016, of a stock trading link between Hong Kong and Shenzhen. In mainland China, the Shanghai Composite index settled 1.27% lower. In Hong Kong, the Hang Seng index settled 1.45% lower. Before his arrival for a conference in Hong Kong, speculation was rife that Dejiang could announce the launch of a long-anticipated stock trading link between Hong Kong and Shenzhen.
US stocks dropped yesterday, 17 May 2016, after Federal Reserve officials implied that interest rates could be raised as early as next month. Atlanta Fed President Dennis Lockhart and San Francisco Fed President John Williams, both, yesterday, 17 May 2016, said the Fed's decision on whether to raise rates at the June 14-15 meeting hinges on the data. Lockhart said that June certainly could be a meeting at which action could be taken. Dallas Fed President Robert Kaplan, seen as a hawk, said he will push for an interest rate hike in June or July.
The consumer-price index increased a seasonally adjusted 0.4% in April from the prior month after rising 0.1% in March. That was the largest one-month increase since February 2013. A measure of underlying price pressures, which excludes the often-volatile categories of food and energy, rose 0.2% last month after ticking up 0.1% in March. Core prices were up 2.1% from a year earlier, a fifth consecutive month of annual growth above 2%the longest such streak in four years.
Closer home, the market breadth indicating the overall health of the market was negative. On BSE, 1,313 shares fell and 1,123 shares rose. A total of 175 shares were unchanged. The BSE Mid-Cap index was currently off 0.25%. The fall in this index was lower than Sensex's decline in percentage terms. The BSE Small-Cap index was currently up 0.19%, outperforming the Sensex.
Index heavyweight and housing finance major HDFC fell 1.17% to Rs 1,202. The stock hit high of Rs 1,213.80 and low of Rs 1,196.50 so far during the day.
Metal and mining stocks saw mixed trend. NMDC (up 3.26%), Hindustan Copper (up 0.19%), JSW Steel (up 0.96%), Tata Steel (up 0.57%), Steel Authority of India (Sail) (up 0.12%), Bhushan Steel (up 0.81%), Hindustan Zinc (up 0.18%) and Jindal Steel & Power (up 1.08%) rose. Vedanta (down 1.6%), National Aluminium Company (down 1.66%) and Hindalco Industries (down 1.07%) edged lower.
Copper edged lower in the global commodities market. High Grade Copper for July 2016 delivery was currently off 1.75% at $2.0252 per pound on the COMEX.
Capital goods stocks declined. Bharat Heavy Electricals (Bhel) (down 1.82%), ABB India (down 0.13%), Punj Lloyd (down 0.92%), BEML (down 0.03%), Crompton Greaves (down 1.39%), Siemens (down 0.48%) and Thermax (down 1.18%) fell. L&T (up 0.66%) and Bharat Electronics (up 1.52%) rose.
Balaji Telefilms fell 4.35% after the company reported consolidated net loss of Rs 13.20 crore in Q4 March 2016 compared with net profit of Rs 9.59 crore in Q4 March 2015. The company's net sales rose 6.8% to Rs 82.16 crore in Q4 March 2016 over Q4 March 2015. The result was announced after market hours yesterday, 17 May 2016.
Powered by Capital Market - Live News
