Mid Session Commentary

Market trades on a weak note
(20-Mar-2017, 14:27 Hours IST)  

Key benchmark indices continued to trade with weakness in mid-afternoon trade. At 14:20 IST, the barometer index, the S&P BSE Sensex, was down 144.25 points or 0.49% at 29,504.74. The Nifty 50 index was down 34.15 points or 0.37% at 9,125.90. Weakness in world stocks dampened sentiment on the domestic bourses. Profit booking kicked in on the domestic bourses after the recent upmove saw Nifty hitting record high on Friday, 17 March 2017.

Key benchmark indices reversed intial gains and continued to trade with weakness thereafter. The Sensex rose 50.49 points or 0.17% at the day's high of 29,699.48 at onset of the day's trading session. The index lost 166.59 points or 0.56% at the day's low of 29,482.40 in early afternoon trade, its lowest level since 15 March 2017. The Nifty gained 7.55 points or 0.08% at the day's high of 9,167.60 at onset of the day's trading session. The index lost 43.75 points or 0.48% at the day's low of 9,116.30 in early afternoon trade, its lowest level since 15 March 2017.

The BSE Mid-Cap index was up 0.2%. The BSE Small-Cap index was up 0.28%. Both these indices outperformed the Sensex.

The market breadth, indicating the overall health of the market, was negative. On the BSE, 1,449 shares declined and 1,275 shares rose. A total of 199 shares were unchanged.

PSU OMCs saw mixed trend. BPCL (up 0.69%) and HPCL (up 0.07%) rose. Indian Oil Corporation (down 0.63%) declined.

Shares of oil exploration and production (E&P) companies saw mixed trend. Cairn India (down 0.32%) and Reliance Industries (down 0.87%) fell. ONGC (up 0.34%) and Oil India (up 0.03%) edged higher.

FMCG stocks saw mixed trend. Tata Global Beverages (up 1.48%), Dabur India (up 1.42%), Britannia Industries (up 0.42%), Godrej Consumer Products (up 0.88%), Marico (up 0.03%), Nestle India (up 0.89%) and Bajaj Corp (up 1.12%) rose.

Procter & Gamble Hygiene and Health Care (down 0.94%), GlaxoSmithkline Consumer Healthcare (down 1.55%), Colgate-Palmolive (India) (down 0.07%), Hindustan Unilever (down 0.11%), Jyothy Laboratories (down 2.51%) fell.

Indian Bank slipped 4.73% to Rs 269.80, with the stock sliding on profit booking after recent gains. Shares of Indian Bank had risen 6.28% in the preceding four trading sessions to settle at Rs 283.20 on Friday, 17 March 2017, from its closing of Rs 266.45 on 10 March 2017.

Meanwhile, Indian Bank announced on Saturday, 18 March 2017, that its board approved to raise capital by issuing 4.75 crore equity shares through follow-on issue/rights issue/private placement /qualified institutional placement (QIP)/preferential issue, subject to necessary approval from Reserve Bank of India, Government of India, shareholders of the bank and other regulatory authorities, at appropriate time.

Ajanta Pharma rose 2.52% after the company said its board approved amalgamation of Gabs Investment with the company. The announcement was made on Saturday, 18 March 2017.

The board of Ajanta Pharma considered and approved the amalgamation of Gabs Investments (Gabs) with Ajanta Pharma (APL) in consideration for equity shares of APL. The proposed amalgamation would be carried out vide a scheme of amalgamation and arrangement between Gabs Investments and Ajanta Pharma and their respective shareholders (the scheme).

APL is in the business of manufacture and pharmaceuticaI products wortdwide. Gabs is in the business of making investments shares and primarity holds shares of APL. As on date, Gabs holds 83.92 lakh shares in APL, representing about 9.54% of the total paid up capital of APL.

Meanwhile, the Union Cabinet chaired by the Prime Minister Narendra Modi has approved the four Goods and Services Tax (GST) related bills today, 20 March 2017, namely, the Central Goods and Services Tax Bill 2017 (The CGST Bill), the Integrated Goods and Services Tax Bill 2017 (The IGST Bill), the Union Territory Goods and Services Tax Bill 2017 (The UTGST Bill) and the Goods and Services Tax (Compensation to the States) Bill 2017 (The Compensation Bill).

These four Bills have been earlier approved by the GST Council after thorough, clause by clause, discussion over 12 meetings of the Council held in the last six months. The Government is committed to early introduction of GST, one of the biggest reforms, in the country as early as possible. GST Council has decided 1 July 2017 as the date of commencement of GST.

Overseas, European markets were trading lower as investors digested the potential impact that trade barriers could have on global growth. Meanwhile, inflationary pressure in Europe's largest economy increased further in February, as prices at Germany's factory gates recorded their strongest annual rise in over five years. Germany's statistics office, Destatis, said that producer prices rose 0.2% from January and increased 3.1% on the year--the strongest year-over-year increase since December 2011.

Elsewhere, euro area finance ministers are set to gather for a Eurogroup meeting in order to discuss developments relating to the second review of Greece's macroeconomic adjustment plan.

Most Asian stocks declined with markets in Japan shut for a holiday and investors watching oilfield-related shares after a bankruptcy filing by Singapore's Ezra Holdings at the weekend. Japanese Prime Minister Shinzo Abe reportedly said on Sunday, 19 March 2017, in Germany that the European Union and Japan should soon reach an economic deal, and stressed the importance of free trade to his country.

US stocks edged lower on Friday, 17 March 2017, with investors awaiting further catalysts before jumping back into the market. In the latest economic data, industrial production was flat in February. Separately, the index of consumer sentiment rose to 97.6 in March from 96.3 in February, based on a preliminary reading by the University Michigan.

Finance ministers from twenty of the world's biggest economies held a two-day meeting, and warned against competitive devaluations and disorderly foreign exchange markets but failed to agree on keeping global trade free and open.

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