Key benchmark indices logged sharp losses led by index pivotals L&T, ICICI Bank and Reliance Industries. The barometer index, the S&P BSE Sensex, lost 300.82 points or 0.86% to settle at 34,848.30. The Nifty 50 index lost 86.30 points or 0.81% to settle at 10,596.40. The Sensex ended below the psychologically important 35,000 mark. The Sensex and the Nifty, both, settled at over 3-week closing low.
Bajaj Auto fell after declaring Q4 result. Capital goods stocks edged lower. FMCG stocks saw mixed trend.
Sentiment was weak due to political uncertainty in Karnataka after the Supreme Court reportedly directed for floor test in Karnataka Assembly tomorrow, 19 May 2018. Crude oil prices hovering near the $80 per barrel mark and sustained selling from foreign funds also dented sentiment.
On the political front, Supreme Court has reportedly directed for floor test in Karnataka Assembly at 16:00 IST tomorrow, 19 May 2018 after hearing Congress-JDS plea against Karnataka Governor inviting Bharatiya Janata Party (BJP) to form government. BJP's B.S. Yeddyurappa was yesterday, 17 May 2018, sworn in as chief minister of Karnataka. The swearing-in came after a four-hour, post-midnight Supreme Court hearing on a Congress-JDS petition that sought to quash his candidature.
Karnataka delivered a hung assembly on Tuesday with no party getting a clear majority to form government in the state. While the BJP emerged as the single-largest party, winning 104 seats, falling marginally short of the 113 seats needed to form a government. The Congress and the Janata Dal Secular (JDS) stood second and third with wins on 78 and 38 seats respectively.
In global commodities markets, Brent crude oil futures edged higher on growing concerns over supply disruptions from the Middle East to Venezuela and on signs a global glut has dwindled. Brent for July 2018 settlement was up 27 cents at $79.57 a barrel. Higher crude oil prices could increase India's fiscal deficit and current account deficit and stoke fuel price inflation.
Foreign portfolio investors (FPIs) sold shares worth a net Rs 830.94 crore yesterday, 17 May 2018 as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 428.92 crore yesterday, 17 May 2018, as per provisional data.
Domestic stocks drifted lower in early trade. Stocks continued to trade with weakness in in morning trade. Key benchmark indices traded in a small range amid negative bias in mid-morning trade. Weakness persisted on the bourses in afternoon and mid-afternoon trade. Stocks extended fall and hit fresh intraday low in late trade.
The barometer index, the S&P BSE Sensex, lost 300.82 points or 0.86% to settle at 34,848.30, its lowest closing level since 26 April 2018. The index hit high of 35,163.11 and low of 34,821.62 during the day.
The Nifty 50 index lost 86.30 points or 0.81% to settle at 10,596.40, its lowest closing level since 25 April 2018. The index hit high of 10,674.95 and low of 10,589.10 during the day.
The S&P BSE Mid-Cap index lost 1.47%. The S&P BSE Small-Cap index lost 1.62%. Both these indices underperformed the Sensex.
The market breadth, indicating the overall health of the market, was weak. On the BSE, 763 shares rose and 1,859 shares fell. A total of 136 shares were unchanged.
Among the sectoral indices on BSE, the S&P BSE Capital Goods index (down 3.05%), the S&P BSE Industrials index (down 2.54%), the S&P BSE Metal index (down 2.36%), the S&P BSE Healthcare index (down 2.06%), the S&P BSE Auto index (down 1.82%), the S&P BSE Basic Materials index (down 1.77%), the S&P BSE Realty index (down 1.74%), the S&P BSE Consumer Discretionary Goods & Services index (down 1.47%), the S&P BSE Oil & Gas index (down 1.46%), the S&P BSE Telecom index (down 1.46%), the S&P BSE Utilities index (down 1.43%), the S&P BSE Power index (down 1.38%) and the S&P BSE Energy index (down 1.27%) underperformed the Sensex.
The S&P BSE Finance index (down 0.84%), the S&P BSE Bankex (down 0.78%), the S&P BSE Teck index (down 0.54%), the S&P BSE Consumer Durables index (down 0.47%), the S&P BSE IT index (down 0.35%) and the S&P BSE FMCG index (up 0.88%), outperformed the Sensex.
ICICI Bank (down 3.21%), Tata Motors (down 3.14%) and Tata Steel (down 3.04%) were the top Sensex losers.
Index heavyweight Reliance Industries fell 1.24% to Rs 933.40
Bajaj Auto lost 1.48%. Bajaj Auto's consolidated profit after tax rose 36% to Rs 1175 crore on 30% rise in turnover to Rs 7140 crore in Q4 March 2018 over Q4 March 2017. Earnings before interest, taxation, depreciation and amortization (EBITDA) rose 36% to Rs 1431 crore. EBITDA margin fell to 20.9% in Q4 March 2018 from 21.2% in Q4 March 2017. The result was declared during market hours today, 18 May 2018.
Capital goods stocks edged lower. BEML (down 6.45%), Bharat Electronics (down 2.95%), ABB India (down 1.05%), Bharat Heavy Electricals (Bhel) (down 3.65%), Siemens (down 1.46%) and Thermax (down 0.88%) fell.
Index heavyweight and engineering & construction major L&T dropped 3.54%. L&T during market hours today, 18 May 2018 said that the Heavy Civil Infrastructure business of L&T Construction has bagged orders worth Rs 1504 crore. The business has won a marine infrastructure project of national importance by securing an order from the Cochin Shipyard for part design and construction of a Dry Dock along with associated works.
L&T GeoStructure has received an order from the Kalinga International Coal Terminal Paradip for construction of piling, diaphragm wall and berth deck at Paradip Port, Odisha.
FMCG stocks saw mixed trend. Colgate-Palmolive (India) (up 4.09%), Britannia Industries (up 2.68%), Dabur India (up 1%), Hindustan Unilever (up 2.22%) and Procter & Gamble Hygiene and Health Care (up 0.18%) rose.
Jyothy Laboratories (down 7.21%), Marico (down 1.21%), Nestle India (down 0.07%), and Bajaj Corp (down 1.2%), Tata Global Beverages (down 0.79%), Godrej Consumer Products (down 0.16%) and GlaxoSmithkline Consumer Healthcare (down 0.13%) fell.
Drug major Sun Pharmaceutical Industries dropped 3.21%. The company announced that one of its wholly-owned subsidiaries has launched in US, the Authorized Generic (AG) version for Daiichi Sankyo Inc.'s Welchol (colesevelam hydrochloride) 625mg tablets. The launch is pursuant to a distribution and supply agreement between Sun Pharma's wholly owned subsidiary and Daiichi Sankyo Inc., which grants the Sun Pharma subsidiary, exclusive rights to distribute these tablets in the US for a pre-determined period. Welchol Tablets recorded US sales of approximately $520 million for the 12 months ending March 2018, as per IQVIA. The announcement was made after market hours yesterday, 17 May 2018.
SRF lost 13.79% after consolidated net profit fell 4.11% to Rs 123.91 crore on 21.74% increase in net sales to Rs 1589.98 crore in Q4 March 2018 over Q4 March 2017. The result was announced after market hours yesterday, 17 May 2018.
JK Tyre & Industries rose 2.6% after consolidated net profit rose 77.55% to Rs 158.87 crore on 6.11% increase in net sales to Rs 2283.97 crore in Q4 March 2018 over Q4 March 2017. The result was announced after market hours yesterday, 17 May 2018.
Commenting upon the results, Raghupati Singhania, chairman and managing director of the company said that in the year 2017-2018, the sales volumes at JK Tyre grew by 11%. The company registered a growth higher than the industry at large, which helped JK Tyre increase its presence across categories especially in truck, light truck, small commercial vehicle (SCV), farm and off-the-road (OTR) tyres. Singhania further added that the year witnessed an unprecedented increase in oil prices which had a major impact on margins.
Voltas lost 3.59%. On a consolidated basis, Voltas' net profit fell 3.13% to Rs 194.19 crore on 1.15% increase in net sales to Rs 2021.30 crore Q4 March 2018 over Q4 March 2017. The result was announced after market hours yesterday, 17 May 2018.
The UN World Economic Situation and Prospects (WESP) as of mid-2018, said GDP growth in India is expected to climb to 7.5 and 7.6% in fiscal years 2017-18 and 2018-19 respectively, as robust private consumption and benefits from past reforms help the country's GDP gain momentum but sustained recovery in private investment remains a crucial challenge. This is a substantial recovery from the 6.7% growth India registered in fiscal year 2017, according to a UN report.
Among the major economies, growth in India is gaining momentum, underpinned by robust private consumption, a slightly more supportive fiscal stance and benefits from past reforms, the report said.
Overseas, European shares retreated as uncertainty about Italian politics contributed to a market already jittery over trade tensions between global superpowers China and the US. Italian politics remained in focus on Friday after the country's two biggest populist parties on Thursday agreed on a coalition program that included plans to cut taxes and increase fiscal spending, but no direct threat to Italy's membership of the eurozone.
Most Asian stocks rose as investors appeared to be readjusting their expectations about trade negotiations between the US and China.
Traders watched the latest in the US-China trade dispute after US President Donald Trump somewhat dashed hopes of a trade deal between the two countries. Trump said he doubts that the negotiations will succeed because China has become very spoiled on trade.
The three main US equity benchmarks finished lower yesterday, 17 May 2018 as selling in technology shares offset an advance in the energy sector. In US economic data, initial jobless claims rose by 11,000 to 222,000 in the latest week, the highest level in a month. The Philadelphia Fed manufacturing index came in at 34.4 in May.
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