Sensex, Nifty hit lowest level in more than a week

After languishing in negative zone in afternoon trade, key benchmark indices extended losses in mid-afternoon trade. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, hit their lowest level in more than a week. The market breadth indicating the overall health of the market was negative. The Sensex was currently off 131.51 points or 0.48% at 27,512.37. In overseas markets, European shares edged lower as fears lingered about the Greek debt situation.

Pharma stocks declined. Cement stocks also edged lower. Index heavyweight and cigarette major ITC edged lower. Another index heavyweight and housing finance major HDFC also declined. Dish TV India hit 52-week high after the company during market hours today, 26 May 2015, reported turnaround Q4 March 2015 results.

Meanwhile, Reserve Bank of India (RBI) Governor Dr. Raghuram G. Rajan yesterday, 25 May 2015, said that while India's macro economic parameters have improved, growth was still slow in picking up. Finance Minister Arun Jaitley yesterday, 25 May 2015, said India has to bring the tax rate to global level while at the same time remove the exemptions.

Meanwhile, after the completion of one year in office, the Narendra Modi government has hit pause on labour reforms. The Ministry of Labour & Employment today, 26 May 2015, announced that the government has decided to constitute an inter ministerial committee to hold threadbare discussions with representatives of Central Trade Unions on 10 point charter of demands and other issues being raised by them and for recommending measures to address those issues.

Indian stocks may remain volatile this week as traders roll over positions in the futures & options (F&O) segment from the near month May 2015 series to June 2015 series. The near month May 2015 F&O contracts expire on Thursday, 28 May 2015.

Foreign portfolio investors bought shares worth a net Rs 74.14 crore yesterday, 25 May 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 0.17 crore yesterday, 25 May 2015, as per provisional data released by the stock exchanges.

In the overseas markets, European shares edged lower as fears lingered about the Greek debt situation. Chinese stocks led gains in Asian markets.

At 14:15 IST, the S&P BSE Sensex was down 131.51 points or 0.48% at 27,512.37. The index lost 162.20 points at the day's low of 27,481.68 in mid-afternoon trade, its lowest level since 18 May 2015. The index rose 32.06 points at the day's high of 27,675.94 in early trade.

The Nifty was down 35.65 points or 0.43% at 8,334.60. The index hit a low of 8,321.95 in intraday trade, its lowest level since 18 May 2015. The index hit a high of 8,378.90 in intraday trade.

The BSE Mid-Cap index was down 31.67 points or 0.3% at 10,579.44. The BSE Small-Cap index was down 34.51 points or 0.31% at 11,148.87. The decline in both these indices was lower than the Sensex's decline in percentage terms.

The market breadth indicating the overall health of the market was negative. On BSE, 1,435 shares fell and 1,019 shares rose. A total of 112 shares were unchanged.

Pharma stocks declined. Glenmark Pharmaceuticals (down 1.15%), Sun Pharmaceutical Industries (down 1.15%), Dr Reddy's Laboratories (down 1.11%), Glaxosmithkline Pharmaceuticals (down 0.69%), Ipca Laboratories (down 0.1%) and Cipla (down 0.68%) edged lower. Strides Arcolab (up 3.06%) and Wockhardt (up 0.69%) edged higher.

Lupin was off 0.25% at Rs 1,750.35. The stock hit a high of Rs 1,797 and a low of Rs 1,744.60 so far during the day. With regard to news item titled "Some drugs made by Lupin, DRL & Mylan lose EU approval", Lupin during market hours today, 26 May 2015, said that in connection with GVK Bio Eqivalence (BE) studies, the company along with many other companies in the European Union (EU) received communication from European Medicines Agency (EMA) for suspension of Trimetazidine MR 35mg. tablets and Cefpodoxime 200mg. tablets in January 2015. Lupin informed the EMA that it will submit new BE studies for Trimetazidine MR 35mg. tablets and Cefpodoxime 200mg. tablets by June 2015. The company has successfully conducted the new BE studies for these two drugs and submitted the report in May 2015 for review by EMA, Lupin said. A feedback in this regard from the EMA is awaited, Lupin said. Lupin further said that the company also submitted the new BE study reports to various customers for their external review purpose.

Cement stocks declined. Ambuja Cements (down 2.12%), UltraTech Cement (down 1.91%) and ACC (down 0.82%) edged lower. Shree Cement (up 0.64%) edged higher.

Grasim Industries was up 0.22% at Rs 3,580.55. Grasim has exposure to cement sector through its subsidiary UltraTech Cement.

Index heavyweight and cigarette major ITC edged lower. The stock was off 1.31% at Rs 313.50. The stock hit a high of Rs 318.50 and a low of Rs 313.35 so far during the day.

Another index heavyweight and housing finance major HDFC declined. The stock was off 1.34% at Rs 1,236.05. The stock hit a high of Rs 1,260 and a low of Rs 1,234 so far during the day.

Dish TV India hit 52-week high after the company during market hours today, 26 May 2015, reported turnaround Q4 March 2015 results. The stock was up 5.84% at Rs 89.75. The stock hit a high of Rs 90.90 so far during the day, which is a 52-week high for the counter. The stock hit a low of Rs 84 so far during the day. Dish TV India reported net profit of Rs 35.01 crore in Q4 March 2015 as against net loss of Rs 149.05 crore in Q4 March 2014. Total income rose 16.95% to Rs 768.38 crore in Q4 March 2015 over Q4 March 2014. The result was announced during market hours today, 26 May 2015.

Dish TV India's EBITDA (earnings before interest, taxation, depreciation and amortization) rose 72.14% to Rs 221.90 crore in Q4 March 2015 over Q4 March 2014.

Meanwhile, after the completion of one year in office, the Narendra Modi government has hit pause on labour reforms. The Ministry of Labour & Employment today, 26 May 2015, announced that the government has decided to constitute an inter ministerial committee to hold threadbare discussions with representatives of Central Trade Unions on 10 point charter of demands and other issues being raised by them and for recommending measures to address those issues.

Meanwhile, Reserve Bank of India (RBI) Governor Dr. Raghuram G. Rajan yesterday, 25 May 2015, said that while India's macro economic parameters have improved, growth was still slow in picking up. Rajan stated this in Mumbai while inaugurating the Conference of the Chief Secretaries/Finance Secretaries and select Cooperative Secretaries of States. Emphasising the importance of fiscal consolidation in terms of both quantitative and qualitative dimensions, he added that the state governments would have a critical role in improving the consolidated fiscal performance of the government sector as a whole. He highlighted the need for improvement in governance structure, capitalisation and resolution mechanism in the cooperative banking sector which plays a crucial role in credit flow to disadvantaged groups, especially in rural areas.

Meanwhile, Finance Minister Arun Jaitley yesterday, 25 May 2015, said India has to bring the tax rate to global level while at the same time remove the exemptions. The Finance Minister stated this in his key note address after inaugurating the Thirty First Annual Conference of Principal Chief Commissioners, Principal Director Generals, Chief Commissioners and Director Generals of Income Tax in New Delhi. He said that the honest tax payers should not be afraid of the Black Money Bill recently passed by the Parliament as it is targeted against those who have stalked their illegal assets abroad. He said that parallel economy has to be squeezed in a free and transparent manner.

In the overseas markets, European shares edged lower today, 26 May 2015, as fears lingered about the Greek debt situation. Key benchmark indices in France, Germany and UK were off 0.59% to 0.85%.

A Greek government spokesman reportedly said yesterday, 25 May 2015, that Greece intends to keep repaying its debt. His comments came after Interior Minister Nikos Voutsis on Sunday, 24 May 2015, warned that the government won't have the money it is due to repay the International Monetary Fund (IMF) next month unless it strikes a deal with international creditors over further rescue funding. Greece is scheduled to repay euro 1.6 billion ($1.76 billion) to the IMF between 5 June and 19 June 2015.

Meanwhile, Greece's Prime Minister Alexis Tsipras is reportedly facing dissent within his left-wing Syriza party against the economic policies Greece may have to agree to if it wants bailout money from the IMF and other creditors.

Asian stocks edged higher today, 26 May 2015. Key indices in Japan, Taiwan, Singapore, and Indonesia were up 0.12% to 0.77%. South Korea's Seoul Composite was down 0.12%.

Hong Kong stocks edged higher, catching up with gains in Shanghai yesterday, 25 May 2015, when the Hong Kong market was closed for holiday. The Hang Seng Index rose 0.92%. In mainland China, the Shanghai Composite Index crept higher in choppy trading. The index jumped 2.02%. The Shanghai Composite Index had jumped 3.4% yesterday, 25 May 2015, bolstered by news that China plans to launch in July a mutual-fund recognition program between Hong Kong and mainland China, which will allow cross-border sales of funds between the two markets. Meanwhile, markets also got a boost from a state media report yesterday, 25 May 2015, which said China has developed a plan to reform the national pension fund system, allowing possibly hundreds of billions of dollars from the fund to invest in domestic stock markets.

The US stock market was closed yesterday, 25 May 2015, for the Memorial Day Holiday.

Federal Reserve Vice Chairman Stanley Fischer said yesterday, 25 May 2015, that the central bank expects to follow a gradual and relatively slow trajectory of short-term interest-rate increases over the next three to four years to bring borrowing costs back to normal levels. Fischer said observers focus too much on when the Fed will start raising its benchmark short-term rate from near zero, and instead should think more about where interest rates are headed over time. He said Fed economists expect the rate will reach from 3.25% to 4% in three to four years.

Fischer said the coming Fed rate increases will be a gradual process. He said it would not be like the relatively rapid and predictable path of Fed rate increases from 2004 to 2006, when the benchmark rate rose by 0.25 percentage point at each of 11 consecutive monetary policy meetings. His comments echoed those of Fed Chairwoman Janet Yellen, who said last week that US central bank is on track to raise interest rates this year but will likely proceed cautiously because the job market hasn't fully healed, inflation is low and growth has again disappointed.

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