Weakness persisted on the bourses in afternoon trade. At 13:18 IST, the barometer index, the S&P BSE Sensex, was down 259.23 points or 0.99% at 25,804.89. The Nifty 50 index was currently down 74.85 points or 0.94% at 7,905.05. The Sensex continued to hover below the psychologically important 26,000 mark after falling below that level in mid-morning trade. Index heavyweights Infosys, ITC, HDFC, Reliance Industries and auto stocks led losses for key benchmark indices. The weakness on the domestic bourses stemmed from weakness in global stocks. World stocks fell after the Bank of Japan left its main policies unchanged after the conclusion of a two-day monetary policy meeting, disappointing market expectations the central bank would take further extraordinary steps to stimulate Japan's economy.
The Sensex fell 286.03 points, or 1.09% at the day's low of 25,778.09 in afternoon trade, its lowest level since 26 April 2016. The barometer index rose 36.42 points, or 0.14% at the day's high of 26,100.54 in early trade, its highest intraday level since 4 January 2016. The Nifty fell 85.95 points, or 1.07% at the day's low of 7,893.95 in afternoon trade, its lowest level since 26 April 2016. The index rose 12.10 points, or 0.15% at the day's high of 7,992 in morning trade, its highest level since 6 November 2015.
The market may remain volatile during the remaining part of the trading session as traders roll over positions in the futures & options (F&O) segment from the near month April 2016 series to May 2016 series. The near month April 2016 derivatives contracts expire today, 28 April 2016.
The market breadth indicating the overall health of the market was weak. On BSE, 1,477 shares fell and 832 shares rose. A total of 147 shares were unchanged. The BSE Mid-Cap index was currently down 0.2%. The BSE Small-Cap index was currently down 0.52%. The decline in both these indices was lower than the Sensex's decline in percentage terms.
In overseas stock markets, Asian and European stocks edged lower after the Bank of Japan unexpectedly held off from expanding monetary stimulus. Japanese stocks led losses for Asian equities. The Nikkei 225 Average ended 3.61% lower. The Bank of Japan (BOJ) voted to keep its current level of asset purchases unchanged and rates on hold while announcing a 300 billion ($2.69 billion) lending program to support banks in the region hit by this month's Kyushu earthquake. Speculation was rise that the Japanese the central bank would announce a further easing of the monetary policy to stimulate Japan's economy. BOJ Governor Haruhiko Kuroda was quoted as saying that the BOJ will do whatever it takes to reach its 2% inflation target and that there are no limits to monetary policy measures.
Trading in US index futures indicated that the Dow Jones Industrial Average could fall 130 points at the opening bell today, 28 April 2016. US stocks closed mostly higher yesterday, 27 April 2016, but the gains were checked by weakness in the technology sector. Meanwhile, the Federal Reserve left interest rates unchanged after the conclusion of a two-day monetary policy meeting yesterday, 27 April 2016. The Fed's signal that it was in no rush to raise rates relieved investors.
Index heavyweight and cigarette major ITC lost 2.16% to Rs 326.10. The stock hit a high of Rs 331 and low of Rs 325.55 so far during the day.
Index heavyweight and housing finance major HDFC declined 1.92% to Rs 1,101.50. The stock hit high of Rs 1,125.10 and low of Rs 1,099 so far during the day.
Index heavyweight and IT major Infosys fell 1.77% to Rs 1,218. The stock hit high of Rs 1,239.90 and low of Rs 1,216 so far during the day.
FMCG stocks dropped. Godrej Consumer Products (down 2.29%), Hindustan Unilever (down 1.42%), Marico (down 0.86%), Nestle India (down 1.37%), Tata Global Beverages (down 1.59%), Procter & Gamble Hygiene and Health Care (down 1.32%), Dabur India (down 1.38%) and GlaxoSmithkline Consumer Healthcare (down 0.34%) declined. Britannia Industries (up 0.92%), Jyothy Laboratories (up 0.1%), Colgate-Palmolive (India) (up 0.09%) and Bajaj Corp (up 0.25%) rose.
Auto stocks declined. Mahindra & Mahindra (M&M) (down 2.28%), Tata Motors (down 1.02%), Ashok Leyland (down 1.11%), Bajaj Auto (down 1.26%), Hero MotoCorp (down 0.82%) and TVS Motor Company (down 1.68%) declined. Eicher Motors rose 0.5%.
Car major Maruti Suzuki India fell 1.66% to Rs 3,797.95 as Japanese yen strengthened against the dollar after the Bank of Japan surprised financial markets by keeping its main policies unchanged after the conclusion of a two-day monetary policy meeting. A strong yen adversely impacts Maruti Suzuki India's (Maruti) operating profit margin. Maruti pays royalty to its Japanese parent Suzuki Motor Corporation in yen terms for some of its earlier models. As per recent media reports, Maruti will start paying royalty to its Japanese parent in rupee term on all new models from the current financial year, which began on 1 April 2016. Maruti also has an exposure to the yen to the extent it imports raw materials from Japan.
Mercator rose 1.25% after the company said that all the formalities for sale of entire shares in its Singapore based step down subsidiary have been concluded on 27 April 2016. On 30 March 2016, Mercator had said that its wholly owned subsidiary, Mercator International Pte. (MIPL) received approval from the Singapore exchange for divestment of MIPL's entire stake in the company's step-down subsidiary Mercator Lines (Singapore) (MLS). On 10 February 2016, MIPL had entered into a sale and purchase agreement for sale of its entire stake of 90 crore shares MLS to three buyers for 900 million Singapore dollars.
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