India : Sensex snaps 4-day gains, Nifty below 8200; banks, telecom drag
Equity benchmarks as well as broader markets snapped four-day winning streak Thursday with the Nifty breaking 8200 level in late sell-off, weighed by banks and telecom stocks. Profit booking after a relief rally, weak European cues and domestic liquidity concerns caused selling pressure.The 30-share BSE Sensex was down 92.89 points at 26559.92 and the 50-share NSE Nifty lost 31.60 points to 8192.90 amid consolidation while the broader markets underperformed benchmarks.
The BSE Midcap index fell 1.15 percent and Smallcap dropped 0.64 percent as about 1566 shares declined against 1114 advancing shares on the exchange.
UR Bhat of Dalton Capital Advisors said he would be cautious with a negative bias because in addition to demonetisation drive, a lot more factors play a role. He flagged uncertainty around the Italian referendum on Sunday, Donald Trump policy, and US potential interest rate. All this will keep markets in reasonable jitters, he feels.
“The continued selling by FIIs is likely to pull the market to consolidation and at the same time investors are awaiting RBI’s monetary policy for taking further bet,” Vinod Nair of Geojit BNP Paribas Financial Services said.
Foreign institutional investors net sold nearly Rs 23,000 crore worth of equity shares in October-November.
Meanwhile, sources told CNBC-TV18 that after banning legal tender of Rs 500 and Rs 1,000 notes on November 8, more than Rs 11 lakh crore have been deposited in banks till November 30.
Telecom stocks like Bharti Airtel (down 1.66 percent), Idea Cellular (down 5.93 percent) and Reliance Communications (down 5.05 percent) lost ground after Reliance Jio Chairman Mukesh Ambani said starting December 4, all subscribers will get voice, data, video and full bouquet of other jio applications free till March 31, 2017. The scheme is called “Jio Happy New Year offer”. Reliance Industries gained 0.5 percent. (Disclosure: Reliance Industries, the parent company of Reliance Jio, owns Network 18 that publishes Moneycontrol.com.)
Auto sales were mixed in November. Despite demonetisation, Maruti Suzuki beat analysts’ estimates with sales rising 12.2 percent year-on-year while Eicher Motors showed a 41 percent growth in Royal Enfield which was in line. Mahindra & Mahindra’s total sales declined 22 percent with tractor segment showing a 21 percent fall, dented by impact of demonetisation.
Mahindra & Mahindra and Ashok Leyland were down more than 2 percent. Ahead of auto sales data due later today, Hero Motocorp gained 1.5 percent and Tata Motors was down 2.4 percent.
Nifty Bank lost 1 percent as ICICI Bank, Bank of Baroda, PNB, SBI and Axis Bank declined 1-2 percent. Asian Paints shed 3 percent on profit booking.
ONGC and GAIL gained 1 percent and 2.9 percent, respectively after OPEC production cut while oil retailers HPCL, BPCL and IOC fell 2-5 percent. IOC hiked petrol prices by 13 paise per litre and cut diesel by 12 paise per litre on Wednesday.
Aviation stocks like SpiceJet, Jet Airways and InterGlobe Aviation plunged 2.5-4 percent despite jet fuel prices cut by 3.7 percent (Rs 1,881) to Rs 48,379/kL in Delhi.
Healthcare stocks – Sun Pharma and Dr Reddy’s Labs climbed over a percent. Lupin was up 0.7 percent on expansion of partnership with US pharma company Eli Lilly in India and USFDA approval for cholesterol-lowering drug.
Bharti Infratel shares rallied 2 percent. Canada-based asset management company Brookfield is in exclusive talks to buy majority stake in the company, reports CNBC-TV18 quoting agencies.
Gitanjali Gems, PC Jeweller and TBZ gained 1-5 percent after the government scrapped excise duty on branded gold coins, which was at 1 percent.
Mumbai-based construction company HCC surged 20 percent as it will get 75 percent arbitral award amount of around Rs 2,000 crore in 4-6 weeks.
On the global front, European markets were slightly lower as investors focused on political developments in Italy ahead of a key referendum on Sunday and key data releases after the oil-producing cartel OPEC agreed to cut production. France’s CAC, Germany’s DAX and Britain’s FTSE were down 0.4 percent each at the time of writing this article.
However, Asia closed higher with the Japan’s Nikkei rising 1 percent as regional manufacturing surveys led by China beat expectations. Brent crude oil futures gained 1 percent on top of 8.8 percent rally in previous session after OPEC and Russia agreed to restrict production.
