Key benchmark indices hovered in negative zone in morning trade. At 10:18 IST, the barometer index, the S&P BSE Sensex was down 107.93 points or 0.42% at 25,596.68. The Nifty 50 index was currently down 37.60 points or 0.48% at 7,832.55. Weakness in Asian stocks weighed on the domestic bourses. Asian stocks edged lower after minutes from the US Federal Reserve's April policy meeting signalled the US central bank could raise rates as soon as next month if data supported the case that the American economy is getting stronger. The Federal Open Market Committee (FOMC) next undertakes monetary policy review on 14-15 June 2016.
Investors in emerging markets, including India are worried that higher interest rates in the US will drain liquidity from emerging markets and redirect it to developed economies. The US central bank had lifted rates in December 2015 for the first time in nearly a decade.
The Sensex dropped 136.43 points or 0.53% at the day's low of 25,568.18 in morning trade. The barometer index rose 9.95 points or 0.03% at the day's high of 25,714.56 at the onset of trading session. The Nifty lost 42.65 points or 0.54% at the day's low of 7,827.50 in morning trade. The index rose 6.05 points or 0.07% at the day's high of 7,876.20 at the onset of trading session.
On the political front, the leads announced so far for assembly elections in Assam showed that Bharatiya Janata Party (BJP), Asom Gana Parishad and Bodoland People's Front alliance was set to form government in the state. The leads for the assembly elections in West Bengal showed that Trinamool Congress Chief Minister Mamata Banerjee was all set to retain power in the state. In Tamil Nadu, the early trends showed that All India Anna Dravida Munnetra Kazhagam (AIADMK) was set to retain power in the state. In Kerala, the Communist Party of India-Marxist (CPM)-led Left Democratic Front (LDF) was leading. In Puducherry, the All India N.R. Congress and Indian National Congress were leading in four seats each as per results and leads for 10 out of 30 constituencies in Puducherry. The counting of votes for assembly elections held in these four states and the Union territory of Puducherry began early morning today.
In overseas stock markets, Asian markets declined on the possibility of an imminent Fed hike. US stocks finished little-changed yesterday, 18 May 2016, after minutes from the Federal Reserve's April 26-27 meeting indicated that most of its members are ready to lift rates as early as June. The Fed will likely raise interest rates in June if economic data points to stronger US second-quarter economic growth along with higher inflation and employment, according to minutes from the US central bank's April policy meeting released yesterday, 18 May 2016.
Closer home, the market breadth indicating the overall health of the market was positive. On BSE, 941 shares rose and 744 shares declined. A total of 94 shares were unchanged. The BSE Mid-Cap index was currently up 0.14%. The BSE Small-Cap index was currently up 0.35%. Both these indices outperformed the Sensex.
FMCG stocks saw mixed trend. Britannia Industries (up 0.8%), Dabur India (up 0.54%), Godrej Consumer Products (up 0.09%), Tata Global Beverages (up 0.37%), Procter & Gamble Hygiene and Health Care (up 0.52%) rose.
Jyothy Laboratories (down 1.27%), GlaxoSmithkline Consumer Healthcare (down 0.19%), Colgate-Palmolive (India) (down 0.33%), Hindustan Unilever (down 0.25%), Marico (down 0.16%), Nestle India (down 0.32%) and Bajaj Corp (down 0.71%) fell.
Telecom stocks fell. Bharti Airtel (down 0.9%), Idea Cellular (down 0.59%), MTNL (down 0.06%) and Tata Teleservices (Maharashtra) (down 0.15%) declined. Reliance Communications rose 0.39%.
Shares of Bharti Infratel fell 1.53%. Bharti Infratel is a provider of tower and related infrastructure and is a unit of Bharti Airtel.
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