Volatility was the order of the day as key benchmark indices slipped into the red from green in afternoon trade. At 13:16 IST, the barometer index, the S&P BSE Sensex was down 60.19 points or 0.22% at 26,703.27. The Nifty 50 index was currently down 17.70 points or 0.22% at 8,185.90. Weakness in global stocks spoiled investors' sentiment.
The Sensex dropped 80.38 points or 0.3% at the day's low of 26,683.08 in early trade, its lowest level since 2 June 2016. The barometer index rose 208.60 points or 0.77% at the day's high of 26,972.06 in mid-morning trade. The index fell 24.55 points or 0.29% at the day's low of 8,179.05 in early trade, its lowest level since 2 June 2016. The index rose 62 points or 0.75% at the day's high of 8,265.60 in mid-morning trade.
In overseas stock markets, Asian and European shares edged lower on concerns about global economic slowdown and concerns over the 23 June 2016 referendum that could see Britain exit the European Union. Earlier this week, the World Bank revised its global economic growth forecast for calendar year 2016 to 2.4% from the 2.9% projection in January.
The UK government holds a referendum on 23 June 2016 on whether the country should remain a member of the 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.
US stocks dropped yesterday, 9 June 2016, after three days of gains as a decline in crude oil futures sapped risk appetite.
Closer home, the market breadth indicating the overall health of the market was positive. On BSE, 1,212 shares rose and 1,173 shares fell. A total of 160 shares were unchanged The BSE Mid-Cap index was currently down 0.1%. The decline in this index was lower than the Sensex's decline in percentage terms. The BSE Small-Cap index was currently up 0.09%, outperforming the Sensex.
Most cement shares rose. Ambuja Cements (up 0.90%) and ACC (up 0.65%), edged higher. UltraTech Cement fell 0.04%.
Grasim Industries rose 0.52%. Grasim has exposure to cement sector through its holding in UltraTech Cement.
Stocks of most public sector banks edged higher. Punjab and Sind Bank (up 2.92%), Punjab National Bank (up 1.52%), United Bank of India (up 1.37%), Central Bank of India (up 1.31%), UCO Bank (up 1.22%), Corporation Bank (up 0.83%), Dena Bank (up 0.67%), Vijaya Bank (up 0.63%), Andhra Bank (up 0.49%), Canara Bank (up 0.20%), Syndicate Bank (up 0.07%) and Union Bank of India (up 0.04%), edged higher. Allahabad Bank (down 0.09%), Bank of India (down 0.11%), State Bank of India (down 0.12%), IDBI Bank (down 0.52%) and Indian Bank (down 1.13%) edged lower.
Moody's Investors Service has said in a report on 11 public sector banks rated by the global credit rating agency that the weak earnings outlook for public sector banks highlights their high level of external capital needs and their capitalisation profiles will further deteriorate unless the government provides additional capital support. Moody's Vice President and Senior Analyst Alka Anbarasu said that the bank's asset quality will remain under pressure over the next 12 months, as they continue to recognize non-performing loans (NPLs) from some of the larger leveraged corporate groups, particularly in the steel and power sectors. As a result, elevated provisioning expenses will continue to constrain profitability and limit internal capital generation of public sector banks. The ability of public sector banks to raise capital through public offerings is constrained by most bank shares trading below book.
Stocks of private sector banks witnessed a mixed trend. City Union Bank (up 1.01%), HDFC Bank (up 0.65%), Axis Bank (up 0.42%) and ICICI Bank (up 0.02%), edged higher. IndusInd Bank (down 0.07%), Federal Bank (down 0.34%) and Kotak Mahindra Bank (down 0.74%), edged lower.
Yes Bank rose 2.23% to Rs 1,063.50 after the bank announced that it executed a share subscription and shareholders' agreement to acquire 8% of the post-issue paid-up capital of Receivables Exchange of India (RXIL). RXIL is a joint venture company set up by NSE Strategic Investment Corporation and Small Industries Development Bank of India. The announcement was made after market hours yesterday, 9 June 2016.
Solar Industries India rose 3.63% after the company secured an order worth Rs 443.44 crore from Singareni Collieries Company (SCCL) for supply of explosives. The latest order from SCCL is for the supply of about 1.63 lakh metric tonne of explosives for the financial years 2016-17 and 2017-18.
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