Key indices continue to hover in negative zone

Weakness continued on the bourses in mid-morning trade. At 11:18 IST, the barometer index, the S&P BSE Sensex, was off 303.05 points or 1.15% at 25,962.19. The 50-unit Nifty 50 index was off 87.05 points or 1.09% at 7,867. The Sensex continued to trade below the psychological 26,000 level after slipping below that level in the opening trade.

The weakness on the domestic bourses stemmed from a poor showing of Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) in the Bihar assembly elections which has raised concerns among investor that the opposition parties may disrupt the Centre's economic reform process. The pre-poll alliance between the Janata Dal (United), Rashtriya Janata Dal and Congress scored a stunning win in the Bihar assembly elections for which counting took place yesterday, 8 November 2015, dealing a major blow to the ruling NDA government at the Centre. The NDA won just 58 seats of which the BJP won 53 seats in the Bihar assembly elections. With the opposition, emboldened by the victory in Bihar, unlikely to let Parliament function smoothly in the winter session, the fate of key legislation aimed at furthering the government's reform agenda remains uncertain. The BJP-led NDA has a comfortable majority in Lok Sabha, but lags in numbers in the Rajya Sabha, the upper house, where members are elected by the strength of legislators in the states. The NDA was hoping that a good performance in some of the state assembly elections would help it consolidate its position in the Rajya Sabha, which in turn could help it push through important legislation in the upper house. At present, the Congress is the single largest party in the Rajya Sabha with 67 seats. The BJP has 48 members in the 245-member house and the NDA 60 members.

Earlier, the Sensex and Nifty, both, hit their lowest level in almost 6 weeks at the onset of the trading session in the wake of BJP's drubbing in Bihar assembly elections. The Sensex tanked 608.34 points or 2.31% at the day's low of 25,656.90 at the onset of the trading session. The Nifty 50 slumped 182.60 points or 2.29% at the day's low of 7,771.70 at the onset of the trading session.

The market breadth indicating the overall health of the market turned positive from negative in mid-morning trade. On BSE, 1,086 shares rose and 1,057 shares declined. A total of 80 shares were unchanged. The BSE Mid-Cap index was currently up 0.13%. The BSE Small-Cap index was currently up 0.37%. Both these indices outperformed the Sensex.

In overseas stock markets, key benchmark indices in emerging Asia were mostly in red after robust US jobs data for October 2015 bolstered expectations of the US Federal Reserve hiking interest rates at its next monetary policy review in December 2015. Investors in emerging markets, including India are worried that once the Fed starts raising interest rates, it will drain liquidity from global emerging markets and redirect it to developed economies. The Fed has held its benchmark short-term interest rate near zero since December 2008. The ultra-loose monetary policy in the US has encouraged heavy investment in higher-yielding emerging markets. The next monetary policy review from the Fed is scheduled on 15-16 December 2015. The Fed-funds futures market is now pricing in 70% probability of an increase in US benchmark interest rate in December 2015.

IT stocks edged lower. Wipro (down 1.89%), Tech Mahindra (down 1.84%), Infosys (down 1.15%), HCL Technologies (down 1.2%) and TCS (down 1.06%) edged lower. MindTree (up 0.94%) and Oracle Financial Services Software (up 0.68%) edged higher.

Tata Motors reversed initial losses triggered by the company reporting a reverse turnaround in Q2 September 2015. The stock was up 1.87% at Rs 403.65. The stock hit a high of Rs 409.85 and a low of Rs 372 so far during the day. Tata Motors reported consolidated net loss of Rs 429.76 crore for Q2 September 2015 compared with net profit of Rs 3290.86 crore in Q2 September 2014. Total income rose 1.15% to Rs 61563.45 crore in Q2 September 2015 over Q2 September 2014. The result was announced after market hours on Friday, 6 November 2015.

As per International Financial Reporting Standards, Tata Motors British luxury car unit Jaguar Land Rover's (JLR) revenue stood at GBP 4,831 million for the quarter ended 30 September 2015 as against GBP 4,808 million for the quarter ended 30 September 2014. Operating profit (EBITDA) stood at GBP 589 million for the quarter ended 30 September 2015 as against GBP 933 million for the quarter ended 30 September 2014. An exceptional charge of GBP 245 million has been recognised for about 5,800 vehicles involved in the Tianjin Port explosion. Post the exceptional charge, loss after tax stood at GBP 92 million for the quarter ended 30 September 2015 as against profit after tax of GBP 450 million for the quarter ended 30 September 2014.

State Bank of India (SBI) was up 0.76% at Rs 245.10, with the stock extending previous trading session's gains triggered by the bank reporting strong Q2 results. The stock had risen 3.86% to settle at Rs 243.25 on that day.

Bank of Baroda (BoB) was up 1.76% at Rs 170.35, with the stock extending previous trading session's post-result gains. The stock had risen 4.95% to settle at Rs 167.40 on that day.

Punjab National Bank (PNB) was up 1.77% at Rs 135.15, with the stock extending previous trading session's gains triggered by the state-run bank reporting decline in non-performing loans on sequential basis in Q2 September 2015. The stock had risen 2.47% to settle at Rs 132.80 on that day.

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