A divergent trend was witnessed between the two key benchmark indices, with the barometer index, the S&P BSE Sensex, registering small losses and the 50-unit Nifty 50 index registering small gains. The Sensex fell 80.27 points or 0.33% at 24,602.21, as per the provisional closing data. The Nifty gained 13.80 points or 0.18% at 7,512.55, as per the provisional closing data. The rally on the domestic bourses fizzled out at the fag end of the trading session as European stocks reversed initial gains. The Sensex and the Nifty hovered in positive zone almost throughout the trading session following a dovish statement from the US Federal Reserve.
The Sensex shed 105.96 points or 0.42% at the day's low of 24,576.52 in late trade. The barometer index rose 265.82 points or 1.07% at the day's high of 24,948.30 in early trade, its highest level since 14 March 2016. The Nifty dropped 19.35 points or 0.25% at the day's low of 7,479.40 in late trade. The index hit its highest level in more than six-weeks when it rose 86.55 points or 1.15% at the day's high of 7,585.30 in early trade.
The market breadth indicating the overall health of the market turned negative from positive in late trade. On BSE, 1,339 shares fell and 1,271 shares rose. A total of 185 shares were unchanged. The BSE Mid-Cap index was provisionally up 0.52%. The BSE Small-Cap index was provisionally up 0.07%. Both these indices outperformed the Sensex.
The total turnover on BSE amounted to Rs 2529 crore, higher than turnover of Rs 2249.88 crore registered during the previous trading session.
In overseas stock markets, European stocks reversed initial gains as strength in euro against the dollar raised concerns on exports front. Earlier during the global day, Asian edged higher after the Fed slashed its projections for rate increases to two in 2016 from an earlier projection of four after keeping rates unchanged at the conclusion of a two-day monetary policy review yesterday, 16 March 2016. Fewer US interest rates hikes could support demand for emerging-market assets because investors have less incentive to draw out money from risky assets in their search for higher yields in the US.
US stocks rose yesterday, 16 March 2016, in the aftermath of the Fed statement. The Fed concluded a two-day policy meeting by leaving interest rates untouched, as expected, and signalling fewer rate hikes in coming months as the United States continues to face risks from an uncertain global economy. In light of the current shortfall of inflation from 2 percent, the committee will carefully monitor actual and expected progress toward its inflation goal, the Fed said in a statement. The stance of monetary policy remains accommodative, thereby supporting further improvement in labor market conditions and a return to 2 percent inflation, it said.
GAIL (India) surged after piped and natural gas regulator Petroleum and Natural Gas Regulatory Board (PNGRB) raised the tariff on GAIL's K.G. Basin natural gas pipeline network sharply to Rs 45.32 per mmbtu on Gross Calorific Value (GCV) basis from Rs 5.56 per mmbtu with effect from 1 April 2016. The stock rose 4.27%. PNGRB in its tariff order set tariff at Rs 5.56 per mmbtu for the K.G. Basin natural gas pipeline for the period from 20 November 2008 to 31 March 2016 and Rs 45.32 per mmbtu for the period from 1 April 2016 to 11 February 2017. The economic life of GAIL's K.G. Basin natural gas pipeline ends on 11 February 2017.
Pharma stocks declined on firm rupee. Glenmark Pharmaceuticals (down 2.66%), Cipla (down 1.71%), Dr Reddy's Laboratories (down 1.1%), Cadila Healthcare (down 0.52%), Lupin (down 4.55%), Divi's Laboratories (down 0.53%), Aurobindo Pharma (down 0.34%). and Sun Pharmaceutical Industries (down 1.61%) declined. Firmness in rupee could adversely affect sales of pharma companies in rupee terms as pharma firms derive substantial revenue from exports.
In the foreign exchange market, the partially convertible rupee was currently hovering at 66.69, compared with closing of 67.23 during the previous trading session.
Meanwhile, Finance Minister Arun Jaitley was today, 17 March 2016, quoted as saying that it would be difficult for the government to accept the opposition Congress party's demand to cap the goods and services tax (GST) rate in the GST constitution amendment bill stuck in parliament. The Congress wants Jaitley to cap the rate of GST at less than 20%. Considered as a major indirect tax reform in the country, GST aims to remove barriers across states and unite the country into a common market. GST will subsume central indirect taxes such as excise duty and service tax at the central level and value added tax at the state level besides other local levies such as octroi and entry tax.
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