Market turns volatile

Volatility ruled the roost in mid-afternoon trade as key benchmark indices once again extended losses on fresh selling after erasing almost entire intraday losses. At 14:15 IST, the barometer index, the S&P BSE Sensex, was down 118.85 points or 0.33% at 35,425.09. The Nifty 50 index was down 44 points or 0.41% at 10,757.85. The undertone of the market was negative due to political uncertainty in Karnataka and subdued Asian stocks.

ITC rose after declaring good Q4 result. FMCG stocks gained. Capital goods stocks saw mixed trend. Hindalco Industries fell after declaring poor Q4 result.

Local stocks began trading for the day on a weak note as US and Asian shares declined amid rising geopolitical tensions in the Korean peninsula. Key benchmark indices extended early slide and hit fresh intraday low in morning trade. Stocks cut losses in mid-morning and early afternoon trade. Recovery continued in afternoon trade on positive European stocks

The S&P BSE Mid-Cap index was down 0.29%. The S&P BSE Small-Cap index was off 0.01%. Both these indices outperformed the Sensex.

The market breadth, indicating the overall health of the market, was weak. On the BSE, 968 shares rose and 1,521 shares fell. A total of 127 shares were unchanged.

ITC rose 1.63% to Rs 286.40 after net profit rose 9.86% to Rs 2932.71 crore on 26.48% decline in total income to Rs 11329.74 crore in Q4 March 2018 over Q4 March 2017. The result was announced during trading hours today, 16 May 2018.

FMCG stocks gained. Hindustan Unilever (up 3.47%), Marico (up 1.56%), Nestle India (up 0.76%), Britannia Industries (up 1.64%), GlaxoSmithkline Consumer Healthcare (up 0.03%), Colgate-Palmolive (India) (up 2.2%), Dabur India (up 1.96%), Godrej Consumer Products (up 1.09%), Procter & Gamble Hygiene and Health Care (up 2.66%) and Bajaj Corp (up 1.86%) rose.

Tata Global Beverages (down 0.49%) and Jyothy Laboratories (down 0.92%) fell.

Hindalco Industries fell 1.11%. The company's net profit fell 24.98% to Rs 376.97 crore on 0.69% decline in total income to Rs 11866.02 crore in Q4 March 2018 over Q4 March 2017. The result was announced during trading hours today, 16 May 2018.

Capital goods stocks saw mixed trend. Bharat Heavy Electricals (Bhel) (up 1.02%), BEML (up 3.17%), Bharat Electronics (up 0.83%) and Thermax (up 1.02%) rose. ABB India (down 0.66%), L&T (down 0.6%), Punj Lloyd (down 1.35%) and Siemens (down 0.23%) fell.

On the political front, Karnataka delivered a hung Assembly on Tuesday with no party getting a clear majority to form government in the state. While the Bharatiya Janata Party (BJP) emerged as the single-largest party, winning 104 seats, falling marginally short of the 113 seats needed to form a government. The Congress and the Janata Dal Secular (JDS) stood second and third with wins on 78 and 38 seats respectively.

All eyes are now on Governor Vajubhai Vala as both the BJP and the post-poll combine of the Congress and the JDS have staked a claim to form the government. Meanwhile, BJP's Karnataka unit chief B S Yeddyurappa reportedly met the Governor Vajubhai Vala, and asked him to allow him to take oath as chief minister as the party had emerged the single largest party.

Overseas, shares in Europe were trading higher as investors monitored surging interest rates in the bond markets. Asian stocks were mixed as geopolitical developments and rising benchmark US yields spurred a return of risk aversion. North Korea canceled high-level talks with Seoul, denouncing military exercises between South Korea and the United States, breaking from several months of easing relations on the peninsula. This has also raised concerns about the planned summit between US President Donald Trump and his North Korean counterpart leader Kim Jong Un scheduled next month.

US stocks halted a four-day rally yesterday, 15 May 2018 with the steepest slide in almost two weeks as healthcare and tech shares retreated. Investors are weighing the prospect for higher Federal Reserve rates as strong US retail and factory data on Tuesday fueled bets the Fed may raise rates three more times this year.

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