A lacklustre trend was witnessed as the two key benchmark indices traded near the flat line in mid-morning trade. At 11:18 IST, the barometer index, the S&P BSE Sensex, was down 3.06 points or 0.01% at 25,227.30. The Nifty 50 index was currently up 1.25 points or 0.02% at 7,732.30. The Sensex rose 43.85 points, or 0.17% at the day's high of 25,274.21 in early trade. The index fell 48.89 points, or 0.19% at the day's low of 25,181.47 in early trade, its lowest level since 6 May 2016. The Nifty rose 13.75 points, or 0.17% at the day's high of 7,744.80 in early trade. The index shed 15.25 points, or 0.19% at the day's low of 7,715.80 in early trade, its lowest level since 6 May 2016.
The market breadth indicating the overall health of the market was weak. On BSE, 1,272 shares fell and 780 shares rose. A total of 123 shares were unchanged. The BSE Mid-Cap index was currently down 0.29%. The BSE Small-Cap index was currently down 0.41%. The fall in both these indices was higher than the Sensex's decline in percentage terms.
In overseas stock markets, Asian stocks dropped as speculation mounted that the US Federal Reserve will raise interest rates as early as next month. Investors in emerging markets are worried that higher interest rates in the US will drain liquidity from emerging markets and redirect it to developed economies.
US stocks finished lower yesterday, 23 May 2016, as the prospect that interest rates might rise as soon as next month weighed on utilities shares. Philadelphia Fed President Patrick Harker said yesterday, 23 May 2016, that a hike in June is appropriate unless data weakens. St. Louis Fed President James Bullard said holding rates too low for too long could cause financial instability. San Francisco Fed President John Williams said the election this fall wouldn't prevent the central bank from raising interest rates and that a hike in interest rate in June remains likely.
The minutes from the US Federal Reserve's April policy meeting released last week showed that Fed policy setters discussed the possibility of a June rate increase if the economy continued to strengthen. The Federal Open Market Committee next undertakes monetary policy review on 14-15 June 2016. The US central bank had lifted rates in December 2015 for the first time in nearly a decade.
Auto stocks were mixed. Hero MotoCorp rose 0.28%. Bajaj Auto (down 0.28%) and TVS Motor Company (down 0.61%) declined.
Mahindra & Mahindra (M&M) (down 0.49%) and Eicher Motors (down 0.42%) declined. Ashok Leyland (up 0.9%) and Maruti Suzuki India (up 0.22%) gained.
The National Green Tribunal yesterday, 23 May 2016, passed an order banning registration of new diesel vehicles with capacity of 2000 cc and above except public transport and local authority vehicles in Kerala. It also directed that all diesel vehicles, which are more than 10 years old shall not be permitted to ply on the road in some major cities in Kerala to curb pollution.
Realty stocks declined. Housing Development & Infrastructure (HDIL) (down 0.85%), Indiabulls Real Estate (down 1.93%), Unitech (down 0.76%), Oberoi Realty (down 0.37%), and DLF (down 0.01%) edged lower. Sobha rose 0.89%.
Tara Jewels tumbled 7.82% after the company reported consolidated net loss of Rs 5.88 crore in Q4 March 2016 compared with net profit of Rs 9.87 crore in Q4 March 2015. The result was announced after market hours yesterday, 23 May 2016. Tara Jewels' net sales rose 8.7% to Rs 573.84 crore in Q4 March 2016 over Q4 March 2015.
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