India : Nifty ends above 8600, falls 2.5% for week; Mid, Smallcap up 2%

It was a quiet start to the October series as investors remained cautious on Friday after yesterday’s 465-point fall on the Sensex due to double whammy effect of geopolitical tensions at India-Pakistan border and September F&O expiry. Short covering helped benchmark indices close marginally higher amid consolidation but the broader markets showed spectacular performance despite correction in global peers.On the final trading day of the July-September quarter, the 30-share BSE Sensex was up 38.43 points at 27865.96 and the 50-share NSE Nifty rose 19.90 points to 8611.15 while the BSE Midcap and Smallcap indices surged 2 percent each on strong market breadth. About 2060 shares advanced against 637 declining shares on the exchange.

The market is expected to be in broader range of 8500-8900 in near term due to expensive valuations, expert say, adding the RBI policy will be important event next week. Majority of experts feel the rate cut is unlikely on October 4.

Jayant Manglik of Religare Securities feels that prevailed anxiety will subside with time but directional move will take some to materialise.In case the market corrects 10 percent from its peak to the level of around 8000, it would be a big buying opportunity, especially for all those who missed the rally, Madhu Kela of Reliance Capital says.

Ashok Wadhwa of Ambit Holdings expects the next quarter to see stronger demand , a better sentiment and more consumption across sectors. If demand continues to sustain, he feels foreign investments will start to increase. He sees a pick up in investments by FY20.

The NSE Nifty lost 2.5 percent and the Sensex shed 2.8 percent while the broader markets were down around 1.5 percent during the week. For the quarter, benchmark indices surged 3-4 percent.

Globally markets were under pressure today after concerns over Deutsche Bank undermined investor sentiment. European markets like Germany’s DAX, Britain’s FTSE and France’s CAC fell 1-1.5 percent as Deutsche Bank hit record lows, at the time of writing this article. Asia also tumbled with the Japan’s Nikkei and China’s Shanghai falling 1.5 percent and 1.9 percent, respectively.

Back home, the market was supported by oil, select banks, technology and auto stocks but selling pressure in FMCG and HDFC group stocks capped the upside.

Oil stocks were in focus ahead of oil ministry meeting for gas price decision. After market hours, the ministry said the government cut October-March local gas prices to USD 2.50 per mmbtu from previous USD 3.06 per mmbtu and India would stick to current formula for gas pricing. ONGC was up 2.3 percent and GAIL surged 3.5 percent.

Tata Motors was up 1.6 percent. With reaffirming buy rating and target price of Rs 625, Bank of America Merrill Lynch said the consolidation of platforms with a richer product mix is expected to improve profitability by more than 200 basis points to 9.2 percent by FY19. It estimated an EPS CAGR of 23 percent during FY16-19.

Cipla was the biggest loser, down more than 3 percent after the US health regulator issued four observations across three facilities in Goa.

Mahindra & Mahindra, SBI, Maruti Suzuki, Lupin and Tata Steel gained 1-3 percent whereas ITC, HDFC, HDFC Bank, HUL and Dr Reddy’s Labs were down 0.5-1.6 percent.

Buying interest was seen liquor stocks after the Patna High Court imposed a stay on Bihar’s anti-liquor law. United Spirits, United Breweries, Pincon Spirit, Globus Spirits, Radico Khaitan and Tilaknagar Industries shares rallied 3-11 percent.

Alkem Laboratories fell 8 percent after it received the inspection report from USFDA for Daman manufacturing facility, which contained thirteen 483 observations.

DCB Bank, IDFC Bank and Torrent Power gained around 3 percent each as these stocks added in NSE F&O segment.