Key benchmark indices traded near the flat line in positive zone in morning trade. At 10:18 IST, the barometer index, the S&P BSE Sensex, was up 25.85 points or 0.08% at 25,250.86. The Nifty 50 index was up 6.10 points or 0.08% at 7,737.15. 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.
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, giving up early gains 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.
Closer home, the market breadth indicating the overall health of the market was negative. On BSE, 858 shares fell and 737 shares rose. A total of 95 shares were unchanged. The BSE Mid-Cap index was currently down 0.06%. The BSE Small-Cap index was currently down 0.17%. Both these indices underperformed the Sensex.
IT stocks declined. HCL Technologies (down 0.62%) and Infosys (down 0.92%) declined. Tech Mahindra lost 0.98% ahead of its Q4 results today, 24 May 2016.
TCS declined 0.55%. The company after market hours yesterday, 23 May 2016, announced the release of a new software module for retail banks. The new software release features an operational analytics module that enables retail banks to understand in real-time how the product fulfillment process for consumer banking operations impacts multiple departmental touch points, and provides recommendations on operational processes to better serve their customers, TCS said in a statement.
Capital goods stocks dropped. BEML (down 1.37%), Bharat Heavy Electricals (Bhel) (down 0.55%), L&T (down 0.89%), Thermax (down 0.98%), and Siemens (down 0.16%) declined. Havells India (up 0.11%) and Crompton Greaves (up 1.21%) gained.
National Fertilizers rose 3.44% after the company reported net profit of Rs 31.44 crore in Q4 March 2016 compared with net loss of Rs 100.57 crore in Q4 March 2015. The result was announced after market hours yesterday, 23 May 2016. National Fertilizers' net sales rose 5.5% to Rs 1640.15 crore in Q4 March 2016 over Q4 March 2015.
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