Sensex falls for 3rd day; Nifty below 8150, sinks 1.5% for week
Equity benchmarks closed the Friday’s rangebound session on a negative note with the Nifty ending below 8150 level, weighed by banks, FMCG and telecom stocks. However, index heavyweights Infosys, HDFC and Reliance Industries capped the downside.The 30-share BSE Sensex was down 29.51 points to 26489.56 and the 50-share NSE Nifty fell 14.15 points to 8139.45. The market breadth weakened further in late trade as about 1489 shares declined against 1121 advancing shares on the Bombay Stock Exchange.
Experts expect the market to be listless for the next two weeks as activity at the FIIs desk will slow down due to Christmas vacation. Hence, the trading volumes will be thin as is usual in the last fortnight every year.
They feel equity benchmarks fully priced in recent events like demonetisation and Federal Reserve’s expected rate hike of 25 basis points. However, December quarter earnings will be eyed for the impact of demonetisation.
The volatility is expected to continue, Rajesh Iyer of Kotak Wealth Management says. He believes that the market adjustment to the Federal Reserve and US political realities, and political uncertainty in Europe will likely position investors against emerging markets.
Sudip Bandyopadhyay of Destimoney Securities says the market slowdown will continue till companies come out with their third quarter earnings in January while Vinod Nair of Geojit BNP Paribas Financial Services says India is likely to underperform in the near term as the strengthening dollar and the rising oil price will add pressure to an already disrupted market.
For the week, the Sensex lost 1 percent and the Nifty fell 1.5 percent while the broader markets underperformed benchmarks. The Nifty Midcap index declined 2 percent and BSE Smallcap was down 1.7 percent.
The rupee recovered a bit after yesterday’s sharp fall of 40 paise. It closed at 67.76 against the dollar, up 7 paise from previous close.
Rajesh Iyer says factoring in possible realignment of global risk appetite along with expectations of further accommodation by the RBI, the rupee will have depreciating bias against US dollar. However, India’s relatively strong macroeconomic fundamentals – growth, external position, inflation – should lead the rupee to fare better than most of the emerging market peers, he adds.
Meanwhile, both houses – Lok Sabha and Rajya Sabha – were adjourned sine die today after passing the Rights of Persons with Disabilities Bill 2014. In the entire winter session, opposition parties disrupted the proceedings of parliament over demonetisation.
Aurobindo Pharma recovered sharply in late trade, down 0.55 percent at close against 4 percent fall intraday. Media report indicated that 19 State Attorney Generals in the US filed civil suits against pharma companies including Aurobindo Pharma on alleged price collusion undertaken on 2 drugs with Heritage Pharma being the ring leader.
Axis Bank fell nearly a percent on profit booking. The bank has suspended its 24 employees due to irregularities in transactions related to exchanges and deposits of old Rs 500 and Rs 1,000 notes. Meanwhile, Nomura has upgraded the bank to buy from neutral with increased target price at Rs 550 (from Rs 540 earlier) as asset quality risks priced in.
ITC, ICICI Bank, Bharti Airtel, Adani Ports, ONGC, Hero Motocorp and Tata Steel were biggest losers among Sensex 30 stocks, down 1-3 percent while Infosys, Tata Motors, TCS and Cipla gained 1-2 percent.
In the broader space, Claris Lifesciences ended off day’s high on profit booking, up half a percent compared with 20 percent rally intraday. The company sold its injectable business to US healthcare company Baxter International for USD 625 million. The management said it will repatriate significant cash to shareholders.
Anuh Pharma shares climbed 16.5 percent after getting European Medicines good manufacturing practice certificate for its 2 products. J&K Bank surged 4.5 percent after slippages in Q2 declined to Rs 1,062.5 crore from Rs 1,377.4 crore in previous quarter.
Tree House was locked at 20 percent lower circuit after a media report indicated that the nursery shut its 113 branches across India as it hasn’t been able to pay staff salaries.
On the global front, European stocks gained strength amid volatility. France’s CAC, Germany’s DAX and Britain’s FTSE were up 0.3-0.5 percent at the time of writing this article. Asian markets ended mixed.
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