India : Sensex pares gains, Nifty fails to hold 8150 amid late sell-off
Tue Nov 29 2016
Rajesh Sharma (2003 articles)

India : Sensex pares gains, Nifty fails to hold 8150 amid late sell-off

Equity benchmarks started off Tuesday’s trade on a strong note with the Sensex rising 237 points intraday but pared gains amid late profit booking. The selling pressure was seen in FMCG, technology and select banks while auto, oil and telecom stocks gained. Investors maintained cautious stance ahead of macro-economic data – GDP, fiscal deficit and core sector.The market gained for the third consecutive session, though it closed off day’s high. The 30-share BSE Sensex rose 43.84 points to 26394.01 and the 50-share NSE Nifty advanced 15.25 points to 8142.15 after hitting a two-week high of 8197.35.

The broader markets also halved gains with the BSE Midcap and Smallcap indices rising half a percent each on positive breadth.

“By and large, almost all the major sectors, barring banking, have played their part in recent rebound but failed to change the prevailing negative sentiments. So now, all depends on the performance of banking pack for next directional move in index,” Jayant Manglik of Religare Securities said.

He advised investors to maintain caution and wait for further clarity.

Meanwhile, Fitch Ratings today lowered India’s GDP growth forecast for this fiscal to 6.9 percent from 7.4 percent, saying there will be “temporary disruptions” to economic activity post demonetisation.

It said economic activity will be hit in the October-December quarter because of the cash crunch created by withdrawal and replacement of Rs 500 and 1,000 notes that accounted for 86 percent of the value of currency in circulation.

Nifty Bank slipped 204 points from day’s high to close in the red, down 0.42 percent. Axis Bank slipped 1.5 percent, HDFC Bank lost 0.4 percent and SBI shed 0.3 percent while ICICI Bank gained 0.2 percent.

Eicher Motors surged 5.5 percent and Maruti Suzuki rallied 4 percent on value buying as well as short covering as analysts feel the demonetisation impact almost priced in. Tata Motors, M&M, Hero Motocorp and Bajaj Auto gained 1-2 percent.

Telecom stocks gained strength. Last Thursday, the government allowed old Rs 500 notes to use for pre-paid mobile recharges. Bharti Airtel was up 2 percent and Reliance Communications rose 1.8 percent.

Idea Cellular surged 4.4 percent after sources close to the telecom operator told CNBC-TV18 that the company is likely to sell 100 percent stake in its tower subsidiary.

Reliance Industries (up 0.95 percent) and HDFC (up 0.66 percent) also helped the market close in green. However, the selling pressure in ITC (down 0.99 percent) and Infosys (down 0.71 percent) capped upside.

Bharat Financial Inclusion was the biggest gainer among F&O stocks, up 7.6 percent on strong improvement in collection efficiency after currency demonetisation.

On the global front, European bourses were mixed as investors focused on talks between OPEC members and the political uncertainty ahead of a key referendum in Italy. Asia also ended mixed.

Oil prices fell on doubts over production cut by oil exporters. The Organization of the Petroleum Exporting Countries will meet in Vienna on Wednesday. Brent crude futures were down 1.39 percent at USD 47.57 a barrel and US crude futures shed 1.55 percent to USD 46.41 a barrel, at the time of writing this article.

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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