India : Sensex snaps 6-day rally, Nifty ends below 8350 on profit taking
Tue Jul 05 2016
Rajesh Sharma (2003 articles)

India : Sensex snaps 6-day rally, Nifty ends below 8350 on profit taking

Equity benchmarks fell for the first time in last seven sessions, taking a breather on Tuesday after 881-point rally on the Sensex as investors preferred profit booking ahead of holiday. Global weakness also caused selling pressure. However, the broader markets outperformed benchmarks, ending on a flat note.The 30-share BSE Sensex declined 111.89 points or 0.41 percent to 27166.87 and the 50-share NSE Nifty was down 34.75 points or 0.42 percent at 8335.95 amid consolidation. The market breadth was weak as about 1474 shares declined against 1282 advancing shares on the Bombay Stock Exchange.

“The current fall in market could be taken as an opportunity to buy on dips as the drops in monsoon deficiency and expectation of an improvement in spending will act as a grip to the market,” says Vinod Nair of Geojit BNP Paribas Financial Services.

Affirming that the market behaviour beginning February 2016 has partly been in line with BNP Paribas’s expectations, Manishi Raychaudhari said that the Sensex is on target to hit the 29,000-mark by 2016-end.

Equity markets will remain shut on Wednesday for Ramzan Id holiday.

European markets were lower, but off day’s lows, after the Bank of England (BoE) announced a new measure to soften the financial fallout from the UK’s vote to leave the European Union (EU) last month. Germany’s DAX and France’s CAC fell over 1 percent while Britain’s FTSE was up 0.5 percent. Most Asian markets ended lower with the China’s Shanghai rising 0.6 percent while Nikkei fell 0.7 percent and Hang Seng declined 1.5 percent. Crude oil prices declined 2 percent on economic concerns.

Meanwhile, Prime Minister Narendra Modi reset his Cabinet with an eye on the Uttar Pradesh elections, inducting 19 new ministers from 10 states. Prakash Javadekar is elevated to a cabinet rank while five ministers are dropped from the Union council of Ministers. With the expansion, the size of Cabinet has increased to 78 ministers.

Jaiprakash Associates was the biggest gainer on exchanges, rallying 28 percent after it signed revised deal with Aditya Birla Group company UltraTech Cement to sell cement assets of 21.2 million tonne per annum at an enterprise value of over Rs 16,189 crore. Other JP group stocks like Jaiprakash Power Ventures and Jaypee Infratech gained 10 percent and 16 percent, respectively.

Larsen & Toubro rebounded in last hour of trade, up 0.6 percent on order worth Rs 5,273 crore from Mumbai Metro. J Kumar Infraprojects (up 8.7 percent) and HCC (up 10.3 percent) also received orders worth Rs 5,012 crore and Rs 2,523 crore from Mumbai Metro, respectively.

After weak sales of medium & heavy commercial vehicles (M&HCV) in June, Kotak has downgraded Ashok Leyland to sell stating that there are major signs of demand moderation in CV segment. It has also reduced target price on Ashok Leyland to Rs 85 from Rs 110 earlier. Shares of Ashok Leyland slipped 5.6 percent.

Motilal Oswal has upgraded M&M to buy from neutral with a target of Rs 1724 per share, indicating an 18 percent upside. Betting big on strong earnings cycle ahead, the brokerage firm is confident that monsoon and recent launches will drive its growth. The stock declined 0.6 percent.

Axis Bank recovered some of its losses in late trade, especially after the cabinet committee on economic affairs has approved hike in foreign ownership in Axis Bank to 74 percent from 62 percent. The stock was down 0.8 percent.

Coal India advanced 1.35 percent as the board of directors will consider the proposal of shares buyback on July 11.

Dish TV declined 1.6 percent. Sources told CNBC-TV18 that the direct to home (DTH) television operator is in talks to buy Videocon DTH for USD 1 billion.

Among others, Tata Motors, Asian Paints, ICICI Bank, Bharti Airtel, Hero MotoCorp, NTPC, GAIL and Bajaj Auto were down 1-2 percent while Reliance Industries, HDFC, Adani Ports, Sun Pharma, Tata Steel, Wipro and BHEL gained 0.3-0.9 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.