Sensex ends rangebound session flat ahead of exit poll results
Thu Mar 09 2017
Ramesh Sridharan (877 articles)

Sensex ends rangebound session flat ahead of exit poll results

Equity benchmarks as well as broader markets closed rangebound session on a flat note Thursday as investors maintained cautious stance ahead of exit poll results for assembly elections later today and Federal Reserve policy meeting next week.

The 30-share BSE Sensex gained 27.19 points at 28,929.13 and the 50-share NSE Nifty rose 2.70 points to 8,927 despite global weakness.

Bharat Iyer of JPMorgan expects the market’s reaction to the elections results to be asymmetric. A win for the BJP should result in a positive reaction but a weak showing will likely result in a more adverse reaction, he feels.

Meanwhile, Ashwani Gujral of says the UP elections outcome is not very important to the market, it is merely being overstated by some commentators.

“If the outcome is negative, the Nifty can correct to around 8,700 level, which can give investors an opportunity for fresh buying,” he adds.

Generally exit poll gives some indication about outcome of elections results. Results of assembly elections of five states – Uttar Pradesh, Punjab, Uttarakhand, Goa, and Manipur – will be announced on March 11. All eyes are on results of Uttar Pradesh elections that gives parliament most number of representatives.

Pharma major Dr Reddy’s Labs shares tanked 5 percent as the US Food & Drug Administration issued Form 483 with 13 observations for Duvvada facility after completion of audit of this formulation manufacturing unit.

Lupin gained 0.13 percent after it announced the launch of pain relief drug Hydrocodone Bitartrate and Acetaminophen in the US market.

Banks and Auto indices outperformed equity benchmarks, rising 0.2 percent and 0.5 percent, respectively. Maruti Suzuki, Axis Bank, SBI and Tata Motors gained more than 1 percent.

HDFC and HDFC Bank, which also supported the market in late trade to turn higher, were up 0.3 percent each.

State-owned gas transmission company GAIL plunged nearly 2 percent after the stock adjusted for bonus issue in proportion of one bonus share for every three shares held.

Adani Ports, ONGC, Wipro and Idea Cellular were other major losers among Sensex & Nifty stocks, down 1.5-2 percent.

Vedanta gained 0.24 percent. Morgan Stanley has initiated coverage on the stock with an overweight call, citing the company‚Äôs potential to grow going forward. The research firm feels that it is the fastest-growing aluminum and zinc company globally. “The balance sheet risk has subsided, which has positioned Vedanta on par with global miners and better than local peers. We forecast a 30 percent free cash flow CAGR for FY17-19,” it says.

Jindal Steel fell 3.3 percent after Delhi HC has upheld cancellation of Jindal Power’s bid for Gare Palma and Tara blocks in coal block auction case, saying it cannot interfere with government decision to cancel company’s bid.

Petronet LNG shares recovered in late trade after falling more than 2 percent intraday as GDF International decided to sell its entire 10 percent stake in company.

The market breadth was in favour of declines. About 1,622 shares fell while 1,185 shares advanced on the BSE.

Markets in Europe were lower as investors reacted to a fall in oil prices and looked ahead to a rate decision from the European Central Bank. Asian equities finished lower today after China’s inflation data painted a mixed picture.

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