Market breadth turns positive from negative

A strong intraday recovery was witnessed in early afternoon trade with key benchmark indices regaining positive terrain. At 12:20 IST, the barometer index, the S&P BSE Sensex, was up 15.49 point or 0.06% at 25,995.09. The Nifty 50 index was currently up 3.30 points or 0.04% at 7,982.40. The Sensex alternately hovered above and below the psychological 26,000 mark so far during the day. Bargain hunting kicked in after indices witnessed prior seven days of losses.

After opening lower tracking weak Asian cues, indices witnessed initial volatility and weakened in morning trade to hit fresh intraday low. Intraday recovery was soon materialised on bargain hunting in mid-morning trade.

Buying was witnessed in side counters after initial selling pressure. Among side indices, the BSE Mid-Cap index was currently up 0.36%. The BSE Small-Cap index was currently up 0.27%. Both these indices outperformed the Sensex.

The market breadth, indicating the overall health of the market, turned positive from negative in early afternoon trade. On the BSE, 1,254 shares rose and 974 shares fell. A total of 145 shares were unchanged.

IT stocks dropped. HCL Technologies (down 1.55%), TCS (down 0.69%), Infosys (down 0.6%), and MphasiS (down 0.44%) edged lower.

Wipro declined 0.49% after the company announced that it has reached an agreement with the US Securities and Exchange Commission (SEC) to formally resolve the previously disclosed six year old investigation. The announcement was made after market hours yesterday, 22 December 2016.

In agreeing to the settlement, the company neither admits nor denies the SEC's allegations that the company violated certain provisions of the Securities Exchange Act of 1934. Under the terms of the settlement, the company consents to pay a civil money penalty of $5 million, to cease and desist from committing or causing violations of the Exchange Act, and to undertake certain follow through actions.

Realty stocks were mixed. Sobha (up 0.77%), Anant Raj (up 0.92%), DLF (up 0.17%) and Godrej Properties (up 0.17%) edged higher. Indiabulls Real Estate (down 0.28%), Unitech (down 3.13%), Housing Development & Infrastructure (HDIL) (down 0.17%), Oberoi Realty (down 0.41%), and Phoenix Mills (down 0.62%) edged lower.

Overseas, Asian stocks suffered modest losses as Wall Street took a breather yesterday, 22 December 2016, from its relentless rise since the US election. Overnight, US equities posted their first back-to-back daily declines of the month in light trading ahead of the Christmas weekend. Wall Street stocks had witnessed an unabated rally since the US election on expectations that Donald Trump's promised fiscal stimulus will boost economic growth and company profits.

Among economic data in US, Gross domestic product increased at a 3.5% annual rate instead of the previously reported 3.2% pace, the Commerce Department said in its third GDP estimate. In another data point, Consumer spending, which accounts for more than two-thirds of US economic activity, rose 0.2% in November, below the estimates.

Meanwhile in Europe, the Italian government approved a decree today, 23 December 2016, to bail out Monte dei Paschi di Siena after the world's oldest bank failed to win investor backing for a desperately needed capital increase. Prime Minister Paolo Gentiloni said his Cabinet had authorised a 20 billion-euro ($20.9 billion) fund to help lenders in distress - first and foremost Monte dei Paschi.

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