The market declined sharply on first trading day of the week led by slide in index pivotals Reliance Industries (RIL) and Larsen & Toubro (L&T). The Sensex settled below the psychological 39,000 mark. The Nifty ended below 11,700 level. Metal stocks slumped. PSU bank stocks fell.
Trading sentiment took a hit after after India slapped higher tariffs on 28 US products in retaliation to Washington's decision to remove certain trade privileges for New Delhi. Investors feared that the retaliatory tariffs might escalate into a trade war between the two countries.
The barometer index, the S&P BSE Sensex, lost 491.28 points or 1.25% to 38,960.79. The index hit a high of 39,540.42 and a low of 38,911.49 in intraday trade.
The Nifty 50 index lost 151.15 points or 1.28% to 11,672.15. The index hit high of 11,844.05 and low of 11,657.75 in intraday trade.
After opening on a weak note, the benchmark indices continued to drift lower as the session progressed. Selling pressure accentuated in late trade pulling the key indices to intraday low.
The S&P BSE Mid-Cap index fell 1.29%. The S&P BSE Small-Cap index fell 1.35%.
The market breadth was weak. On BSE, 685 shares advanced and 1879 shares declined. A total of 132 shares were unchanged.
Among the sectoral indices on the BSE, the S&P BSE Information Technology Index (down 0.25%), the S&P BSE TECK Index (down 0.49%) and the S&P BSE Utilities Index (down 0.62%), outperformed the S&P BSE Sensex. The S&P BSE Metal Index (down 3.05%), the S&P BSE Energy Index (down 2.49%) and the S&P BSE Oil & Gas Index (down 2.34%) underperformed the S&P BSE Sensex.
Index heavyweight RIL fell 2.69% to Rs 1281.50. Engineering and construction major L&T fell 1.97% to Rs 1499.
Metal stocks dropped sharply. Jindal Steel & Power (down 5.90%), Tata Steel (down 5.66%), Steel Authority of India (down 5.36%), Vedanta (down 3.33%), Hindalco Industries (down 2.07%), Hindustan Copper (down 1.49%), National Aluminium Company (down 1.32%), Hindustan Zinc (down 1.12%) and NMDC (down 0.75%) edged lower.
Banks stocks were mixed. Among state-run banks, Jammu and Kashmir Bank (down 2.48%), Allahabad Bank (down 2.40%), Bank of India (down 2.38%), Bank of Baroda (down 1.97%), Punjab National Bank (down 0.85%) and Union Bank of India (down 0.28%), declined. While, Syndicate Bank (up 1%) and Oriental Bank of Commerce (up 0.82%), advanced.
Private sector banks witnessed selling. Axis Bank (down 2.93%), IndusInd Bank (down 1.81%), Kotak Mahindra Bank (down 0.98%), RBL Bank (down 0.96%), ICICI Bank (down 0.84%) and HDFC Bank (down 0.60%), edged lower. While, Yes Bank (up 0.74%), gained.
Mahindra & Mahindra (M&M) fell 1.79%. M&M's farm equipment sector (FES) announced an investment of CHF 4.3 million ($4.3 million) for an 11.25% stake in Switzerland-based agri technology firm Gamaya SA. This investment will be through a subscription to 300 common shares and 30,469 Series B preferred shares of Gamaya SA. ICOS Capital, VI Partners and some existing investors also participated in the CHF 7.5 million Series B funding round. Through this investment, M&M will make superior farming solutions easily accessible to the global farming community, in line with the company's Farming 3.0 strategy. Incorporated in the year 2015, Gamaya is a Switzerland-based company focused on providing crop-specific technology solutions for agriculture. The announcement was made after market hours on Friday, 14 June 2019.
Bharat Heavy Electricals (Bhel) fell 1.97%. The company won two EPC orders for setting up Solar Photovoltaic (SPV) plants with a cumulative capacity of 200 MW. Valued at over Rs 800 crore, the orders have been secured from NTPC and Gujarat State Electricity Corporation (GSECL). The announcement was made on 16 June 2019.
Laurus Labs rose 0.81%. Laurus Labs said it has completed the US Food and Drug Administration (USFDA) inspection of its API facilities in Units 1 & 3 at Parawada, Visakhapatnam, Andhra Pradesh, with two observations which are procedural in nature. This is a regular surveillance audit by USFDA, and no data integrity issues were observed in the inspection. The announcement was made after market hours on Friday, 14 June 2019.
Dewan Housing Finance Corporation (DHFL) fell 4.91%. The company said it has made principal payment of Rs 100 crore and interest payment of Rs 25.49 lakh on non-convertible debentures (NCDs) due on 14 June 2019. The announcement was made after market hours on Friday, 14 June 2019.
Aster DM Healthcare was up 5.29%. ICRA revised ratings of the company's total credit facility of Rs 168 crore. The announcement was made on Saturday, 15 June 2019.
Reliance Infrastructure fell 4.72% after the company reported dismal Q4 results. The company reported consolidated net loss of Rs 3,301 crore in Q4 March 2019 as against net profit of Rs 133.66 crore in Q4 March 2018. Net sales rose 30.48% to Rs 4,012.65 crore in Q4 March 2019 over Q4 March 2018. The company said net loss was largely a result of one time impairment of Reliance Naval and Engineering acquired in 2016, which was already NPA company. The amount could be written back upon successful debt resolution of R-Naval pursuant to the new RBI circular, the firm added.
Divi's Laboratories rose 1.26% after the company announced that its unit-II at village Chippada, Bheemunipatnam District, Andhra Pradesh had an inspection by the US Food and Drug Administration (USFDA) from 10 to 15 June 2019. This was a general Current Good Manufacturing Practices (cGMP) inspection by the USFDA. The inspection has been concluded with no 483 observations.
On the economic front, India imposed higher retaliatory tariffs on 28 US products including almonds, apples and walnuts from Sunday (16 June 2019), following Washington's withdrawal of key trade privileges for New Delhi.
From 5 June 2019, President Trump scrapped trade privileges under the Generalized System of Preferences (GSP) for India, the biggest beneficiary of a scheme that allowed duty-free exports of up to $5.6 billion.
Meanwhile, India's exports were $29.99 billion in May 2019, as compared to $28.86 billion in May 2018, showing a growth of 3.93%. In rupee terms, exports were Rs 2.09 lakh crore in May 2019, as compared to Rs 1.94 lakh crore in May 2018, registering a growth of 7.36%. Imports were $45.35 billion (Rs 3.16 lakh crore) in May 2019, which was 4.31% higher in dollar terms and 7.76% higher in rupee terms over imports of $43.48 billion (Rs 2.93 lakh crore) in May 2018. The data was announced by the government after market hours on Friday, 14 June 2019.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 69.9325, compared with its close of 69.805 during the previous trading session.
In the commodities market, Brent crude for August 2019 settlement was down 36 cents at $61.65 a barrel. The contract rose 70 cents, or 1.14% to settle at $62.01 a barrel during the previous trading session.
Overseas, most European shares were trading lower on Monday. Asian shares ended on a mixed note. Investors were cautious ahead of a closely-watched Federal Reserve meeting, while political tensions in the Middle East and Hong Kong kept risk-appetite in check.
US stocks ended lower on Friday, 14 June 2019, as investors turned cautious before this week's Fed meeting, while a warning from Broadcom on slowing demand weighed on chipmakers and added to U.S.-China trade worries.
US industrial production rose 0.4% in May, a solid and broad-based gain helped by increased production of pickup trucks and cars, the Federal Reserve said Friday. It was the strongest monthly rise in six months.