The market ended the volatile trading session with modest losses. Global stocks dropped as resurgent trade worries worsened investor fears about global economic growth. Volatility rose in late trade after the Reserve Bank of India (RBI) announced monetary policy.
The Sensex fell 249.90 points or 0.69% to settle at 35,884.41, its lowest closing level since 28 November 2018. The index fell 85.66 points, or 0.24% at the day's high of 36,048.65. The index fell 356.50 points, or 0.99% at the day's low of 35,777.81.
The Nifty 50 index fell 86.60 points or 0.80% to settle at 10,782.90, its lowest closing level since 28 November 2018. The index fell 48.45 points, or 0.45% at the day's high of 10,821.05. The index fell 121.55 points, or 1.12% at the day's low of 10,747.95.
In broader market, the S&P BSE Mid-Cap index fell 1.22%. The S&P BSE Small-Cap index fell 1.21%. Both these indices underperformed the Sensex.
The market breadth, indicating the overall health of the market, was weak. On the BSE, 793 shares rose and 1775 shares fell. A total of 150 shares were unchanged.
Among the sectoral indices on BSE, the S&P BSE Metal index (down 3.81%), the S&P BSE Auto index (down 2.4%) and the S&P BSE Basic Materials index (down 2.28%), underperformed the Sensex. The S&P BSE IT index (down 0.17%), the S&P BSE Energy index (down 0.33%) and the S&P BSE Consumer Durables index (down 0.5%), outperformed the Sensex.
Sun Pharmaceutical Industries (down 6.59%), Tata Steel (down 4.27%), Vedanta (down 3.74%), Mahindra & Mahindra (down 3.33%), Coal India (down 2.85%) and ITC (down 2.34%), were the major Sensex losers.
Hindustan Unilever (up 2.07%), HDFC (up 1.75%), HDFC Bank (up 0.51%), Wipro (up 0.40%), Reliance Industries (up 0.29%) and Adani Ports & Special Economic Zone (up 0.12%), were the major Sensex gainers.
Tata Motors lost 3.70% after the company announced that S&P Global Ratings has lowered the credit rating of the company and luxury car unit, Jaguar Land Rover Automotive Plc (JLR), citing weaker profitability at JLR. S&P cut its rating on Tata Motors' issuer credit and senior unsecured notes to 'BB-' from 'BB'. The ratings remain on negative watch. The announcement was made after market hours yesterday, 4 December 2018.
Car major Maruti Suzuki India fell 2.14%. The company informed that over the past year, the cost of company's vehicles has been impacted adversely due to increase in commodity prices and foreign exchange rates, etc. Hence, it has become imperative for the company to pass on some impact of the above additional cost to customers through a price increase across various models in January 2019. This price increase shall vary for different models. Meanwhile, the company said that its total production fell 12.6% to 135,946 units in November 2018 over November 2017. The announcement was made during market hours today, 5 December 2018.
L&T fell 1.69%. The company announced that its construction arm L&T Construction has won orders worth Rs 2106 crore. The announcement was made during market hours today, 5 December 2018.
NTPC declined 1.50%. NTPC informed that the company participated in the 550 MW tender floated by Uttar Pradesh New and Renewable Energy Development Agency (UPNEDA) for grid-connected Solar projects. In the Reverse Auction held on 3 December 2018, NTPC has participated for 85 MW Solar capacities and has won the entire capacity bid by it, at a levelised tariff of Rs 3.02/unit, applicable for 25 years. The 85 MW of solar projects shall be set up by NTPC and shall add to the installed capacity of NTPC. The announcement was made during market hours today, 5 December 2018.
Lupin fell 3.27%. The company announced today, 5 December 2018, the completion of United States Food and Drug Administration (US FDA) inspections carried out at its Mandideep location. Lupin's Mandideep location houses the company's cardiovascular Pril API facilities, Cephalosporin API facilities and Cephalosporin Solid Oral Dosage Form facility. These inspections were carried out between November 26 and December 4,2018.
The inspection at Unit-2, the Cardiovascular Pril API facilities closed with 4 observations. The inspection at Unit-I, the Cephalosporin facilities closed with 10 observations for the Cephalosporin API facilities and 8 observations for the Cephalosporin Solid Oral Dosage Form facility. The observations are largely procedural in nature with some gaps identified in the aseptic processing areas of the Cephalosporin API block and the company is confident of addressing them satisfactorily. As a company, Lupin has committed to an enhanced Quality Management System and Compliance Sustainability Plan. The Lupin Mandideep site is already executing the plan, which also serves to address some of the concerns raised during this inspection. There are no new DMF and ANDA applications pending for review or approval from Lupin's Mandideep facilities.
Further, Lupin announced the launch of Silodosin Capsules 4mg and 8mg, having received an approval from the United States Food and Drug Administration (USFDA) earlier. Lupin's Silodosin Capsules 4mg and 8mg; is the generic equivalent of Allergan's Rapaflo. An alpha-1 adrenergic receptor antagonist, it is indicated for the treatment of the signs and symptoms of benign prostatic hyperplasia (BPH). Rapaflo had annual sales of $198.5 million in the US (IQVIA MAT September 2018). The announcement was made after market hours yesterday, 4 December 2018.
On the basis of an assessment of the current and evolving macroeconomic situation at its meeting today, the Monetary Policy Committee (MPC) decided to keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.5%. Consequently, the reverse repo rate under the LAF remains at 6.25%, and the marginal standing facility (MSF) rate and the Bank Rate at 6.75%.
The decision of the MPC is consistent with the stance of calibrated tightening of monetary policy in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4% within a band of +/- 2%, while supporting growth.
Provisional data released by the stock exchanges showing that local and foreign funds, both, were net sellers of Indian stocks yesterday, 4 December 2018, also weighed on the sentiment.
On the political front, state assembly elections will be closely watched. Polling in Rajasthan and Telangana will be held tomorrow, 7 December 2018. Assembly elections in Madhya Pradesh and Mizoram were held on 28 November 2018. The election to the 90-member Chhattisgarh Assembly was held in two phases 12 and 20 November 2018. Counting of votes will be held across all the five states on 11 December 2018.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 70.485, compared with its close of 70.495 during the previous trading session.
Overseas, European stocks were trading lower as resurgent trade worries worsened investor fears about global economic growth. Investors are likely to closely monitor any further political developments as lawmakers continue to debate Westminster's Brexit plan. Prime Minister Theresa May suffered a series of embarrassing defeats in Parliament on Tuesday.
Asian stocks dropped in the wake of the biggest slide in stocks on Wall Street. Activity in China's service sector expanded at a faster pace in November, a private gauge showed Wednesday. The Caixin China services purchasing managers' index rose to 53.8 in November from a 13-month low of 50.8 in October, Caixin Media Co. and research firm Markit said.
Doubts surrounding the US and China's ability to achieve a concrete deal to avoid new, or expanded, bilateral tariffs are rising, as investors focused on the lack of specific concessions made by China at last weekend's G-20 meeting in Argentina, where President Donald Trump and Chinese President Xi Jinping met.
US financial markets will remain closed Wednesday for a national day of mourning to honor former President George H.W. Bush. US stocks finished sharply lower Tuesday, logging their worst day in nearly a month, as skepticism mounted over the significance of an agreement reached by the US and China to postpone new tariffs.
In the global commodities markets, Brent for February 2019 settlement was down 56 cents at $61.52 a barrel. The contract had risen 39 cents, or 0.63% to settle at $62.08 a barrel during the previous trading session.