India : Asia profit booking drag Sensex, Nifty; end flat for week

Equity benchmarks were rangebound with a negative bias on Friday as globally investors waited for the US jobs data (due later today) before taking any fresh long positions. Weak Asian cues after sharp fall in oil prices in previous session and profit booking weighed on the market.The 30-share BSE Sensex fell 74.59 points to 27126.90 and the 50-share NSE Nifty slipped 14.70 points to 8323.20. The market breadth remained negative throughout the session as about 1556 shares declined against 1153 advancing shares on the Bombay Stock Exchange.

GST Bill that is likely to be tabled in the monsoon session of Parliament and June quarter earnings are the two important events to watch out for in near term, say experts.

India is looking good with a strong monsoon, low oil price and stable currency, says Raamdeo Agrawal, Joint MD of Motilal Oswal Financial Services. He expects some correction in the near-term in the current ‘reasonable’ market.

The correction from any angle could be utilised as an opportunity to buy on dips as the stability in domestic fundamentals will pay better risk return in the medium term, says Vinod Nair of Geojit BNP Paribas Financial Services.

After trading in a 50-point range on the Nifty, the market ended flat for the truncated week. In previous week, equity benchmarks surged 3 percent after easily absorbing the Brexit event, reacting to government initiatives to boost private sector, approval for 7th Pay Commission and progress in monsoon.

European stocks traded mostly higher today ahead of US nonfarm payrolls data that will give a clear indication on the state of the US economy. France’s CAC and Germany’s DAX gained around a percent (at 16 hours IST) while Britain’s FTSE was flat with a negative bias. Asian markets ended mostly lower with the China’s Shanghai, Hong Kong’s Hang Seng and Japan’s Nikkei falling 0.7-1.1 percent.

Oil prices rebounded from two-month lows. Brent and US crude oil futures were trading higher by one percent after losing 5 percent in previous session.

On the home turf, banking & financials, telecom, oil and infra stocks ended lower while auto, select IT and pharma stocks gained.

Bharti Airtel, Idea Cellular, Tata Teleservices and Reliance Communications were down 2-4 percent on concerns that Department of Telecommunications will soon issue demand notice of over Rs 12,500 crore to six telecom operators amid allegations of under-reporting of revenue to the tune of Rs 45,000 crore.

Pharma stocks hogged the limelight as it was a day of USFDA action for these companies. The US health regulator completed inspection of Lupin’s Dabhasa facility with 2 minor observations. Alembic Pharma received establishment inspection report for its Karakhadi API unit.

Cadila Healthcare also received a closure report for observations made in 2014 at its Moraiya facility but the company says this does not indicate resolution of warning letter received in December 2015. Sources told CNBC-TV18 that the remediation for this facility will be completed by July-end. All these facilities are located in Gujarat.

Lupin shares declined over a percent on profit booking while Alembic Pharma gained 3 percent and Cadila rose nearly 5 percent.

Aurobindo Pharma was up 1.9 percent on US FDA approval for Methenamine Hippurate oral tablets that are used to treat and prevent urinary tract infections.

Cipla climbed over a percent after the company decided to launch first biotech manufacturing facility in South Africa.

Tata Motors rallied over 2 percent after the luxury car maker JLR posted record sales for January-June period on robust Europe demand, rising 22 percent to 2.91 lakh units. Even its June sales growth was strong at 17 percent YoY led by Jaguar (84 percent rise YoY). Growth was driven by success of Jaguar XE, F Pace and Discovery Sport.

Among other largecaps, Asian Paints and Hero Motocorp gained over 2 percent while HDFC Bank, L&T, ICICI Bank, Lupin, SBI, Adani Ports and ONGC fell 1-1.5 percent.

South Indian Bank was up 1.6 percent after the private sector lender reported a 45.6 percent growth in profit at Rs 95.1 crore in Q1FY17 YoY. Zee Learn gained more than 8 percent after the profit in June quarter increased 103 percent at Rs 8.01 crore YoY while 8K Miles rallied 11 percent as the software company registered a 56.3 percent growth in profit QoQ.

Gujarat Gas surged 3 percent on approval from the oil & gas regulator Petroleum and Natural Gas Regulatory Board to lay, build, operate, or expand city or local natural gas distribution network in Panchmahal and Anand districts of Gujarat.

Largecaps companies will kick off earnings season next week. Reliance Industries, TCS, Infosys and IndusInd Bank will announce their June quarter earnings.