Nifty ends below 8100, Sensex flat; DRL up 3%, TCS falls 3%
Mon Jun 27 2016
Rajesh Sharma (2003 articles)

Nifty ends below 8100, Sensex flat; DRL up 3%, TCS falls 3%

The Indian market has ended flat with the Sensex up 5.25 points at 26402.96. The Nifty was up 6.10 points  at 8094.70. About 1822 shares have advanced, 791 shares declined, and 177 shares are unchanged.Dr Reddy’s Labs, Cipla, SBI, Sun Pharma and L&T were top gainers while TCS, Infosys, Wipro, Asian Paints and Bajaj Auto were losers in the Sensex.

Shares of Manpasand Beverages rallied 10 percent intraday on Monday after Motilal Oswal inititated coverage on the stock. The brokerage firm has a buy rating on the stock with a target price of Rs 750 per share, indicating 44 percent.According to Motilal Oswal, Manpasand on the cusp of a high growth cycle, led by capacity expansion, new product launches and increases in distribution network, which should lead to market share gains from 5 percent in 2016 to 7.5 percent in 2018. It expects Manpasand to grow at 49 percent CAGR driven by new product launches, increased distribution reach and increased capacities leading to increase its market share to 7.5 percent by 2018 from 5 percent in 2016.

New product launch like Fruits Up and coconut water under brand Coco Sip is also likely to boost growth.

Kotak on Maruti: Kotak Securities has downgraded Maruti Suzuki, the country’s largest car maker, to add from buy earlier and maintained target price at Rs 4,300, citing fair valuations.The brokerage believes positive earnings surprise is unlikely, given the sharp appreciation of Japanese yen against Indian rupee and capacity constraints.

It also believes pricing power of the company will improve once industry recovers to double digit growth which is likely once the Seventh Pay Commission is implemented. The full impact is likely in FY2018, says the brokerage.

FII View: The biggest risk for Indian equities is its high correlation with global markets and Nilesh Jasani Head of Research (Asia Pacific) at Jefferies feels in case of a global risk-off situation likely due to events following Brexit, India could be under pressure.

In an interview to CNBC-TV18, Jasani says, it is unclear how post-Brexit economic and financial markets dominos will fall globally, but market risks have certainly climbed.  “Valuations in India are a concern,” he says.

However, he also believes India’s economic connect with global economies in 2016 is materially different from 2008 and this time there is a higher chance of India being insulated.

Oil Update: Oil prices stabilised today as market participants better absorbed the shock of last week’s vote in Great Britain to leave the European Union and recognised the referendum would have little effect on global fuel demand.

The market continued to be volatile in afternoon trade with the Nifty hovering around 8100 level. Healthcare, FMCG, infra and select banks stocks gained while technology, auto and HDFC group stocks declined.The Sensex fell 50.56 points to 26347.15 and the Nifty slipped 8.05 points to 8080.55 while the broader markets continued to outperform.

The BSE Midcap index gained 0.8 percent and Smallcap was up 1.4 percent as more than two shares advanced for every share falling on the Bombay Stock Exchange.

Aurobindo Pharma, UltraTech Cement, SBI, BPCL, Bank of Baroda, Sun Pharma, L&T, ITC and Lupin gained 1-3 percent while TCS, Infosys, Asian Paints, Wipro, Maruti Suzuki, Power Grid Corporation and IndusInd Bank fell 1-3 percent.

Rajesh Sharma

Rajesh Sharma

Rajesh Sharma is Correspondent for Stock Market of South East Asia based in Mumbai. He has been covering Asian markets for more than 5 years.