Key benchmark indices extended slide to hit fresh intraday lows in afternoon trade, tracking subdued trading sentiment in Asian peers. At 13:17 IST, the barometer index, the S&P BSE Sensex, was down 216.36 points or 0.65% at 32,959.64. The Nifty 50 index lost 78.85 points or 0.81% at 10,112.95. The Sensex slipped below the psychological 33,000 level in afternoon trade.
Weak Asian cues ahead of the US Federal Reserve policy decision later in the week, influenced trading sentiments on domestic bourses. A sharp widening of current account deficit (CAD) too weighed on investors' mood.
After opening higher, key indices slipped into negative terrain in morning trade. Indices extended losses and hit fresh intraday lows in afternoon trade.
Among secondary barometers, the BSE Mid-Cap index declined 1.53%. The BSE Small-Cap index dropped 1.86%. Both these indices underperformed the Sensex.
The broad market depicted weakness. There were more than four losers against every gainer on BSE. On BSE, 2,143 shares declined and 472 shares advanced. A total of 120 shares were unchanged.
Telecom stocks tumbled. Idea Cellular (down 3.88%), Bharti Airtel (down 2.49%) and Reliance Communications (down 1.71%) declined.
Cement stocks fell. Shree Cement (down 2.57%), Ambuja Cements (down 1.32%) and ACC (down 0.96%) edged lower.
UltraTech Cement was off 0.45%. Binani Industries (BIL) which is independently seeking termination of the insolvency proceedings relating to its subsidiary Binani Cement (BCL) which was admitted by the National Company Law Tribunal (NCLT), Kolkata Bench based on reference filed by Bank of Baroda in terms of the provisions of the Insolvency and Bankruptcy Code, has approached the company for arranging funds to pay-off the lenders debts and other liabilities as admitted in the IBC proceedings against an offer of sale/transfer of its entire BCL equity shareholding through a shares sale and purchase agreement.
UltraTech Cement has in-principle concluded commercial understanding with BIL for purchase of 98.47% of the shareholding of BCL subject to termination of IBC proceedings, entering into definitive agreement and other customary and regulatory approvals. BIL has requested the company to issue a comfort letter which shall be used as a support in its application seeking termination of the IBC proceeding.
The Board of Directors of UltraTech Cement at its meeting held today, 19 March 2018, after considering the request made by BIL has agreed to issue the comfort letter confirming that the company will provide funds amounting to Rs 7266 crore, being the amount it had offered to the Committee of Creditors in terms of the Resolution Plan submitted by it for acquiring BCL. The announcement was made during market hours today, 19 March 2018.
Grasim Industries dropped 0.65%. The company said that the production capacity of Epoxy Resin, Reactive Diluents and Hardeners at company's Epoxy Plant at Vilayat ( Gujarat) has increased from 82,350 million tons per annum (MTPA) to 1,23,097 MT per annum through de-bottlenecking process. The announcement was made after market hours on Friday, 16 March 2018.
Grasim has exposure to cement sector through its holding in UltraTech Cement.
Shilpa Medicare surged 7.15% at Rs 488 after the company said that the United States Food and Drug Administration (USFDA) issued an Establishment Inspection Report (EIR) for Shilpa Medicare's formulations manufacturing facility (SEZ unit) located at Jadcherla, Telangana, which was inspected between 11 November and 30 November 2017. USFDA has determined that the inspection classification of this facility is VAI and accordingly EIR issued. The company added that earlier status of its formulation unit is maintained. The announcement was made on Saturday, 17 March 2018.
On the macro front, India's current account deficit (CAD) was reported at $13.5 billion (2% of GDP) in Q3 of FY 2018, up from $8 billion (1.4% of GDP) in Q3 of FY 2017 and $7.2 billion (1.1% of GDP) in the preceding quarter. The widening of the CAD on a year-on-year (y-o-y) basis was primarily on account of a higher trade deficit ($44.1 billion) brought about by a larger increase in merchandise imports relative to exports.
On the political front, the Telugu Desam Party (TDP) and Yuvajana Shramika Rythu Congress Party (YSR Congress) moved no-confidence motions against the Narendra Modi government in the Lok Sabha today. However, no-confidence motion was not introduced, and Lok Sabha was adjourned till tomorrow after continuous uproar.
The Lok Sabha was held up for the 11th day as the TDP, YSR Congress, TRS and AIADMK continued their protests over various issues, including the banking scam and special status for Andhra Pradesh. The lawmakers from these parties trooped into the well holding placards. TDP, the BJP's erstwhile biggest ally in south which walked out of the NDA last week, and its arch-rival YSR Congress have demanded a no trust vote against the government.
The Rajya Sabha was adjourned for the day without transacting any business after parties from Tamil Nadu and Andhra Pradesh disrupted proceedings over their state specific demands. The government has only managed to get some key bills and the budget passed amid a din through a voice vote without a debate as the session has been a virtual washout so far.
Overseas, most Asian stocks edged lower as caution gripped investors ahead of the US Federal Reserve policy meeting later in the week. US stocks ended modestly higher on Friday, 16 March 2018, with the S&P 500 breaking a four-day losing streak.
The US Federal Reserve's two-day monetary policy meeting is scheduled on March 20-21. Strengthening labor market and a steady increase in price pressures could pave the way for the Federal Reserve to raise interest rates in upcoming meeting. The US central bank has forecast three rate increases for this year, but there are also expectations that it will raise its projection to four hikes at the meeting.
Among economic data, US industrial production jumped 1.1% in February, the largest increase in four months. In a separate report, the Commerce Department said housing starts declined 7% to a seasonally adjusted annual rate of 1.236 million units in February. Further, the University of Michigan consumer-sentiment index rose to 102 in March from 99.7 in February.
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