Market opens lower as investors book profits

Key benchmark indices were trading lower in early trade. At 9:20 IST, the barometer index, the S&P BSE Sensex, was down 14.70 points or 0.05% at 26,852.22. The Nifty 50 index was down 12.60 points or 0.15% at 8,225.90. Seling emerged as investors booked profits after yesterday's rally.

The broad market depicted strength. There were almost three gainers against every loser on BSE. 803 shares rose and 297 shares fell. A total of 57 shares were unchanged. The BSE Mid-Cap index was currently up 0.31%. The BSE Small-Cap index was currently up 0.45%. Both these indices outperformed the Sensex.

In overseas markets, most Asian shares rose today, 21 June 2016, on growing expectations that British voters will opt to remain in the European Union in this week's referendum. But investors remain wary ahead of Thursday's vote, as well as Federal Reserve chief Janet Yellen's two-day testimony before Congress which starts later today, 21 June 2016, in which she might offer clues on the timing of the central bank's next interest rate increase. US stocks ended higher yesterday, 20 June 2016, but off their session highs, following the lead of European markets as polls showed support swinging back toward the UK remaining a member of the European Union ahead of a referendum.

The UK government holds a referendum on Thursday, 23 June 2016, on whether the country should remain a member of the European Union (EU). The Organization for Economic Cooperation and Development (OECD) has warned that Britain's leaving the EU -- the so-called Brexit -- could send shocks through global financial markets. The OECD said on 1 June 2016 that a United Kingdom vote to leave the EU would trigger negative economic effects on the UK, other European countries and the rest of the world. Brexit would lead to economic uncertainty and hinder trade growth, with global effects being even stronger if the British withdrawal from the EU triggers volatility in financial markets, the OECD said. By 2030, post-Brexit UK GDP could be over 5% lower than if the country remained in the European Union, the OECD said.

Pharmaceutical shares were in demand. IPCA Laboratories (up 0.84%), Glenmark Pharmaceuticals (up 0.67%), Aurobindo Pharma (up 0.62%), Divi's Laboratories (up 0.55%), Alkem Laboratories (up 0.47%), Sun Pharmaceutical Industries (up 0.45%), Dr Reddy's Laboratories (up 0.39%), Cipla (up 0.38%), Piramal Enterprises (up 0.37%), Lupin (up 0.35%), Cadila Healthcare (up 0.32%), Wockhardt (up 0.29%), Strides Shasun (up 0.21%), Biocon (up 0.14%) and GlaxoSmithKline Pharmaceuticals (up 0.09%), edged higher.

The Indian government yesterday, 20 June 2016, announced liberalization of foreign direct investment (FDI) rules in aviation, pharmaceutical, defence, trading in food products and single brand retail trading. The government said in a statement that with the latest liberalization of the FDI regime in the country, most of the sectors would be under automatic approval route, except a small negative list. With these changes, India is now the most open economy in the world for FDI, it said.

With regard to the pharmaceutical sector, the government has decided to permit up to 74% FDI under automatic route in brownfield projects. FDI beyond 74% will continue to be through government approval route. As per the present norms, 100% FDI in brownfield pharma projects is allowed under government approval route.

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