Market edges lower amid initial volatility

Key benchmark indices edged lower amid initial volatility in early trade as weakness in most of the Asian stocks weighed on sentiment. At 9:20 IST, the barometer index, the S&P BSE Sensex was down 25.99 points or 0.09% at 27,756.26. The Nifty 50 index was currently down 9.30 points or 0.11% at 8,563.25. Realty and IT stocks led early losses on the bourses.

In overseas stock markets, Asian stocks edged lower after Federal Reserve Chairwoman Janet Yellen on Friday, 26 August 2016 signaled the possibility of an interest-rate increase later this year. But, Japanese shares bucked the weak trend in Asian stocks, boosted by a relatively weaker yen. Japan's Nikkei Average was currently up 2.24%. Investors tend to pull money out of assets in emerging markets and redirect it to the assets in US if there is a hike in US interest rates.

US stocks closed mixed on Friday, 26 August 2016 after Federal Reserve Chairwoman Janet Yellen signaled the possibility of an interest-rate increase later this year. On Friday, 26 August 2016, Yellen in her highly-anticipated speech at an economic symposium at Jackson Hole, Wyoming said she was optimistic about the US economy, fueling expectations that interest rate hikes were ahead. She said the Federal Open Market Committee continued to anticipate gradual increases in the federal funds rate over time to achieve and sustain employment and inflation in line with the Fed's objectives. She added that the solid performance in the US labor market and outlook for economic activity and inflation had strengthened the case in recent months for an increase in the federal funds rate.

Closer home, the market breadth indicating the overall health of the market was positive. On BSE, 595 shares rose and 435 shares declined. A total of 54 shares were unchanged. The BSE Mid-Cap index was currently up 0.08%. The BSE Small-Cap index was currently up 0.17%. Both these indices outperformed the Sensex.

Indusind Bank declined 0.71%. The bank said it opened its first branch in Pathankot, Punjab and the bank now has 81 branches in Punjab. The announcement was made after trading hours on Friday, 26 August 2016.

Adani Ports & Special Economic Zone (down 2.48%), Lupin (down 1.41%) and Wipro (down 1.11%) edged lower from the Sensex pack. Tata Motors (up 2.76%), Axis Bank (up 1.33%) and GAIL (India) (up 0.83%) were amongst the major gainers from the Sensex pack.

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