India : Sensex dips for 5th day on US poll anxiety; Midcap down 4% in wk
Fri Nov 04 2016
Rajesh Sharma (2002 articles)

India : Sensex dips for 5th day on US poll anxiety; Midcap down 4% in wk

Bears were in full control of Dalal Street for the fifth consecutive session on Friday as mounting anxiety over the outcome of the US presidential elections rattled markets globally. However, breakthrough on GST rates failed to revive sentiment.The 30-share BSE Sensex was down 156.13 points at 27274.15 and the 50-share NSE Nifty dropped 51.20 points to 8433.75 – the lowest level since July 8, weighed by healthcare, infra and HDFC Group stocks.

Experts feel the current weakness amid consolidation may continue for the short term, especially ahead of US elections and Federal Reserve policy meeting in December.

“We are mirroring the global sentiments and it will only subside post the US Presidential Election outcome,” Jayant Manglik of Religare Securities says.

Till then, he advises traders to restrict positions and sit on cash. At the same time, investors should use this fall to gradually accumulate quality counters, which are available at good bargain, he says.

According to him, the next major support is at 8300 in Nifty while in case of rebound, 8500 would now act as hurdle.

Foreign investors have been underweight on emerging markets for a while, Jonathan Schiessl of Ashburton Investments says, adding FIIs have been holding off investments due to uncertainty of US presidential elections.

The broader markets continued to underperform benchmarks with the BSE Midcap and Smallcap indices falling 1-2 percent on weak breadth. About three shares declined for every share rising on the exchange.

For the week, the Sensex and Nifty shed more than 2 percent while the Nifty Midcap and BSE Smallcap tanked 4 percent each.

Selling by foreign investors ahead of US events (election and policy meeting) also added fuel to the fire. FIIs net sold around Rs 6,500 crore worth of shares since October.

European stocks remained under pressure, following declines overnight on Wall Street amid uncertainty over the US presidential race. France’s CAC, Germany’s DAX and Britain’s FTSE were down 0.8-1.3 percent at the time of writing this article. Asian markets closed lower with Nikkei losing over a percent.

Back home, pharma stocks, especially which have large exposure to US drug market, hit badly on fears of US probe in price collusion . The Nifty Pharma plunged 4.66 percent as heavyweights Sun Pharma (down 7.4 percent, Dr Reddy’s Labs (down 5.67 percent) and Lupin (down 3.6 percent) butchered.

Larsen and Toubro was down 1.8 percent after the government sold 1.6 percent stake via block deals in early trade, mopping up Rs 2,100 crore .

FMCG stocks outperformed with the Nifty FMCG index rising 1.87 percent. It was majorly driven by ITC that gained 3.6 percent as fears of goods and service tax (GST) overhang has subsided after GST council has finalised four-tier tax structure. HUL was up 0.9 percent and Colgate rose 3.4 percent.

Among others, Reliance Industries (down 1.92 percent, HDFC (down 1.4 percent) and HDFC Bank (down 1.03 percent) also drove the market lower while Infosys, M&M, TCS, ONGC, Tata Motors and Asian Paints gained 0.4-1 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.

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