India : Sensex falls 115 pts, Nifty manages to hold 8100; HDFC drags
Equity benchmarks fell further in late trade with the Nifty breaking 8100 level intraday amid low volumes on Monday. Banking & financials, auto and select healthcare stocks drove the market lower but ICICI Bank, Reliance Industries and ITC arrested the fall.The market ended at two-week closing low. The 30-share BSE Sensex dropped 114.86 points to 26374.70 and the 50-share NSE Nifty slipped 35.10 points to 8104.35. The broader markets underperformed benchmarks with the BSE Midcap and Smallcap indices down half a percent each on weak breadth.
Experts say the market is expected to be in a range of 8000-8300 for atleast next one month and then, especially after December quarter earnings, it may start inching towards new highs. They believe that the earnings improvement is likely in second half of next calendar year.
Despite uncertainties surrounding the economy right now, Ridham Desai of Morgan Stanley expects double-digit earnings growth next year.
India’s growth trajectory has turned positive and going into 2017 the external sector has seen improvement and global trade is off lows, Desai says. From a Nifty perspective 45 percent of earnings come from outside India and this is a better environment for growth, albeit uncertainty on depth and breadth of currency exchange (after demonetisation) as well as from US policies, he notes.
Nifty will move towards levels of around 8,600-8,700 points after the Budget, says Sanjiv Bhasin of IIFL. He is confident that Nifty will touch new highs before the end of current fiscal.
European shares were lower as investors reacted to fresh German data and eyed a speech from Janet Yellen, the chair of the US Federal Reserve. France’s CAC and Britain’s FTSE were down 0.3 percent each at the time of writing this article. Asian markets too were mostly lower.
Back home, Aurobindo Pharma rebounded over a percent after the company in its clarification note says it has not received any further requests for information pursuant to that March 2016 subpoena, nor we have received any further subpoenas from the US Department of Justice.
Lupin was up half a percent as the pharma major launched antifungal drug Voriconazole tablets and Voriconazole oral suspension in the US. Bank of America Merrill Lynch prefers the stock (along with Biocon) in the pharma space, which is only large cap company with no pending regulatory issues.
Sun Pharma lost 2.3 percent after Credit Suisse has downgraded the stock to neutral from outperform and cut target to Rs 620 from Rs 800. It says US Department of Justice risk is still a large overhang and investors are focussing on potential penalty.
Among others, Asian Paints, SBI, L&T, Maruti Suzuki, Axis Bank, Adani Ports and Bharti Airtel fell 1-2 percent while GAIL retained its top position in the buying list, up 2.25 percent followed by Reliance Industries, ICICI Bank and ITC.
IOC shares gained 3 percent after it hiked petrol prices by Rs 2.21 per litre and diesel by Rs 1.79 per litre.
Tree House crashed 20 percent again after Zee Learn has withdrawn merger plan with the company. Zee Learn also lost over 4 percent.
Laurus Labs closed first day with a 12 percent premium at Rs 480.40 against issue price of Rs 428.
About 1576 shares declined against 1087 advancing shares on the Bombay Stock Exchange.
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