Market sharply pares early gains

Trading turned volatile as key indices came off day's high and briefly turned negative in morning trade. At 10:18 IST, the barometer index, the S&P BSE Sensex, was up 37 points or 0.10% at 35,584.33. The Nifty 50 index was up 5.45 points or 0.05% at 10,777.50.

The indices opened higher and hit fresh intraday high in early trade. Indices reversed trend and hit fresh intraday low in morning trade as selling emerged at higher levels. The Sensex rose 131.36 points, or 0.37% at the day's high of 35,678.69 in early trade. The index fell 10.45 points, or 0.03% at the day's low of 35,536.88 in morning trade. The Nifty rose 37.55 points, or 0.35% at the day's high of 10,809.60 in early trade. The index fell 7.9 points, or 0.07% at the day's low of 10,764.15 in morning trade.

Among secondary barometers, the BSE Mid-Cap index was up 0.03%. The BSE Small-Cap index was down 0.12%. Both these indices underperformed the Sensex.

The market breadth, indicating the overall health of the market, turned negative from positive. On BSE, 841 shares rose and 1024 shares fell. A total of 105 shares were unchanged.

Most metal shares declined. Hindustan Copper (down 1.08%), Jindal Steel & Power (down 0.98%), Hindustan Zinc (down 0.54%), JSW Steel (down 0.52%), NMDC (down 0.46%), Vedanta (down 0.39%) and Steel Authority of India (down 0.24%), edged lower. National Aluminium Company (up 0.15%), Hindalco Industries (up 0.22%) and Tata Steel (up 0.44%), edged higher.

FMCG shares mixed. Marico (down 1.34%), Bajaj Corp (down 0.79%), Godrej Consumer Products (down 0.55%), Britannia Industries (down 0.17%), Tata Global Beverages (down 0.11%), Hindustan Unilever (down 0.09%) and GlaxoSmithKline Consumer Healthcare (down 0.04%), edged lower. Colgate Palmolive (India) (up 0.09%), Procter & Gamble Hygiene & Health Care (up 0.15%), Nestle India (up 0.37%), Dabur India (up 0.58%) and Jyothy Laboratories (up 0.83%), edged higher.

On the macro front, the Reserve Bank of India (RBI) on Wednesday, 20 June 2018, released the minutes of the Monetary Policy Committee (MPC) meeting held between 4-6 June 2018. All six members of the MPC maintained their neutral policy stance and also voted in favour of a repo rate increase of 25 basis points to 6.25%, revealed the minutes of the meeting.

According to the minutes, RBI governor Urjit Patel said inflation risks have increased since the April policy. Patel, therefore, voted for an increase in the policy repo rate by 25 basis points. In view of prevailing uncertainties, it is apposite to maintain the neutral stance so as to respond to the evolving situation in a flexible manner, he added.

Among the internal members, deputy governor Viral Acharya said that there were considerable uncertainties around oil and food prices as well as the playing out of trade wars and global financial market outcomes, and voted for continuing with the neutral stance. The third RBI member Michael Patra pushed for front-ending rate hikes on the grounds that there is a closing sliver of opportunity to do so.

Overseas, Asian stocks were mixed, driven by uncertainty surrounding trade relations between the world's two largest economies. US stock closed mostly higher Wednesday, though the Dow Jones Industrial Average posted its seventh consecutive daily decline.

The US current-account deficit increased to $124.1 billion (preliminary) in the first quarter of 2018 from $116.1 billion (revised) in the fourth quarter of 2017, according to statistics released by the Bureau of Economic Analysis (BEA). The deficit was 2.5% of current-dollar gross domestic product (GDP) in the first quarter, up from 2.4% in the fourth quarter.

Existing-home sales ran at a seasonally-adjusted annual 5.43 million rate in May, down 0.4% from April, the National Association of Realtors said Wednesday.

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