Key benchmark indices extended intraday losses in early afternoon trade. At 12:20 IST, the barometer index, the S&P BSE Sensex, was down 80.94 points or 0.32% at 26,290.09. The Nifty 50 index was currently down 23.85 points or 0.29% at 8,080.50. Bank and auto stocks led losses on the bourses.
Key indices extended losses after slipping into the red in mid-morning trade after hovering near the flat line in positive terrain earlier during the session. Trading has been lackluster and rangebound so far during the session amid mixed cues in Asian stocks and absence of economic triggers back home.
The broad market depicted weakness. There were almost two losers against every gainer on BSE. 1,517 shares fell and 767 shares rose. A total of 151 shares were unchanged.
The BSE Mid-Cap index was currently down 0.92%. The BSE Small-Cap index was currently down 0.58%. The decline in both these indices was higher than the Sensex's decline in percentage terms.
Auto stocks declined in weak market. Mahindra & Mahindra (M&M) (down 0.37%), Ashok Leyland (down 1.78%), Maruti Suzuki India (down 0.27%), Eicher Motors (down 0.92%), Hero MotoCorp (down 1.19%), Bajaj Auto (down 2.31%) and TVS Motor Company (down 1.13%) declined.
Investors are worried about the short term impact of the cash crunch, emanating from the demonetisation of Rs 1,000 and Rs 500 crore notes announced on 8 November 2016 on sales after dull November auto sales data.
Bank stocks also witnessed selling pressure. Among public sector bank stocks, State Bank of India (SBI) (down 2.2%), Canara Bank (down 1.81%), Union Bank of India (down 2.55%), Bank of India (down 1.2%), Punjab National Bank (down 1.69%) Syndicate Bank (down 2.63%), Indian Overseas Bank (down 0.2%), Bank of Baroda (down 1.88%), Andhra Bank (down 1.1%), Oriental Bank of Commerce (down 1.46%), Dena Bank (down 1.49%), and Indian Bank (down 1.29%), declined.
Among private sector banks, Axis Bank (down 1.1%), ICICI Bank (down 1.89%), Kotak Mahindra Bank (down 0.13%), IndusInd Bank (down 1.34%), Yes Bank (down 1.85%), and HDFC Bank (down 0.19%) declined.
Granules India fell 2.94% after the company announced that Granules OmniChem facility, a 50:50 joint venture company of Granules India and Ajinimoto OmniChem NV, located at Vizag, Andhra Pradesh completed its first inspection by US Food and Drugs Administration (USFDA) with seven observations. The announcement was made after market hours yesterday, 19 December 2016.
Granules OmniChem will respond to these observations within stipulated time period, the company said. This facility currently manufactures active pharmaceutical ingredient (API) intermediates, it added.
The Phoenix Mills rose 1.18% after the company said that it will hike its stake in its subsidiary, Offbeat Developers, to 94.64% from 74.48%. The announcement was made after market hours yesterday, 19 December 2016.
The Phoenix Mills entered into a share purchase agreement for acquisition of the entire 15.18% stake in its subsidiary Offbeat Developers (ODPL) held by Vistra ITCL (India) and IIRF Holdings X. Further, the company has entered into a share purchase agreement to acquire Eder River's entire 4.98% stake in ODPL. Subsequent to the completion of both the aforesaid transactions, the shareholding of The Phoenix Mills in ODPL will increase from 74.48% to 94.64%.
KEI Industries rose 2.48% after the company signed a foreign technical collaboration agreement with Brugg Kabel AG, a Switzerland-based group, to manufacture extra high voltage cables above 220 kilovolt (kV) and up to 400kV at its manufacturing plant/facility located at Chopanki in Rajasthan.
The technical collaboration agreement will allow KEI complete know-how transfer which shall include design, manufacturing, testing, techniques, training of its manufacturing/design personnel in manufacturing of cables along with jointing techniques as also complete EHV system design (design/manufacture/installation/testing & commissioning) of EHV cables. The announcement was made after market hours yesterday, 19 December 2016.
Gujarat Industries Power Company rose 2.79% after the company said that it has signed power purchase agreements (PPA) for a period of twenty five years with Gujarat Urja Vikas Nigam (GUVNL) for the entire 26 megawatts (MW) wind farm capacity of the Rojmal Wind Farm. The announcement was made after market hours yesterday, 19 December 2016.
Overseas, Asian stocks were mixed after the Bank of Japan (BOJ) kept monetary policy steady and offered a brighter view of the economy today, 20 December 2016.
The BOJ maintained the 0.1% interest it charges on a portion of excess reserves that financial institutions park with the central bank. It also left unchanged its 10-year government bond yield target of around zero percent. Japan's economy is projected to grow 1.5% in inflation-adjusted terms in the fiscal year starting in April, thanks to a gradual uptick in the global economy and a recent weakening of the yen against the dollar.
US stocks closed with modest gains yesterday, 19 December 2016, in low volume trade as traders bought some recently less-favored sectors, while some top postelection plays lagged. In economic news, the flash US Markit PMI services for December was 53.4, down slightly from 54.6 in November.
In her first speech after raising interest rates for only the second time this decade, Federal Reserve Chairwoman Janet Yellen said the US has the strongest jobs market in nearly a decade, and there are indications wage growth is picking up. But Yellen also noted the economy is growing more slowly than in past recoveries and productivity growth has been disappointing. Yellen was speaking at a University of Baltimore commencement ceremony.
The Federal Reserve had raised rates for the second time in a decade last week and surprised by forecasting three rate hikes for 2017, more than the consensus two.
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