Nifty dips for 2nd day, Midcap underperforms ahead of exit polls
Wed Mar 08 2017
Ramesh Sridharan (877 articles)

Nifty dips for 2nd day, Midcap underperforms ahead of exit polls

After volatility, equity benchmarks ended lower for second consecutive session Wednesday as investors awaited exit polls for the Uttar Pradesh assembly elections due tomorrow and Federal Reserve policy meeting next week.

The 30-share BSE Sensex plunged 184 points in mid-day trade but short covering in select stocks helped it recoup some losses in last couple of hours of trade. The index was lower by 97.62 points at 28,901.94 while the 50-share NSE Nifty slipped 22.60 points to 8924.30.

The broader markets fell more than equity benchmarks, with Midcap losing over half a percent on weak breadth. About 1,760 shares declined while 1068 shares advanced on the BSE.

Experts say they expect the volatility to continue but bulls still have control over Dalal Street.

“Going ahead, we expect choppiness to continue as market will react to exit polls combined with cues from global front,” Jayant Manglik of Religare Securities says.

However, the year is expected to be strong as Ridham Desai of Morgan Stanley says the market could be heading for best year since 2009.

Strong net demand for equities, improving growth and reasonable valuations continue to push equities higher, Desai feels.

Today is the last day of assembly elections for five states. Exit polls will be announced on March 9 and the actual elections results on Saturday, March 11.

Tata Motors fell further, down nearly 1 percent after lower-than-expected JLR retail sales in February but analysts remained positive about the stock and maintained buy rating. Nomura has retained its buy call on the stock with a target price of Rs 563, implying a 19 percent upside.

Commodity related stocks remained under pressure on further fall in commodity prices in international market. Tata Steel, Hindalco and ONGC were down 1-2 percent.

Reliance Industries, Infosys, ICICI Bank, M&M, L&T and Hero Motocorp among others fell 0.6-1.2 percent whereas HDFC Bank, TCS, SBI, Sun Pharma and Cipla were moderately higher.

There was lot of action in midcap stocks today as Bharat Financial Inclusion rallied further by 4.3 percent on hopes of merger with leading private banks.

MTNL shares surged 16 percent on media reports indicating renewed discussion of its merger with BSNL.

Retail stocks saw buying interest as the Rs 1,870-crore IPO of Avenue Supermarts, the parent company of retail chain D-Mart, opened for subscription. The issue is fully subscribed on first day itself. V-Mart Retail shot up 20 percent while Future Retail and V2 Retail gained around 5 percent.

Airline stocks InterGlobe Aviation, Jet Airways and SpiceJet advanced 2-3 percent after Delhi government slashed jet fuel tax to 1 percent from 25 percent.

Ramesh Sridharan

Ramesh Sridharan

Ramesh Sridharan is our Stock Market Correspondent covering events and daily movements of stock markets in Asia. He is based in Mumbai