Thu Jun 01 2017
Ramesh Sridharan (877 articles)

Sensex ends lower but Midcaps outperform again; ICICI drags Nifty Bank, FMCG up

Equity benchmarks ended the range-bound session lower on Thursday but the broader markets maintained their outperformance for the third consecutive session. Investors awaited RBI policy due next week and monsoon for further market direction, especially after 17 percent rally since the start of the calendar year.

The 30-share BSE Sensex fell 8.21 points to 31,137.59 and the 50-share NSE Nifty dropped 5.15 points to 9,616.10.

Experts believe the consolidation may continue for a couple of days, especially ahead of RBI policy. For the time being, the 9500 level looks like the immediate support for the Nifty, they feel.

They said long-term investors should not get swayed by the short-term volatility in the market as the bull market scenario remains intact. Valuations looked stretched at current levels, but as earnings catch up, things may become a lot more reasonable, they feel.

With the benchmark indices trading at record high, further consolidation cannot be ruled out on Friday, Jayant Manglik, President, Retail Distribution, Religare Securities said.

Traders should remain cautious and be selective in stock picking, while investors can continue to accumulate quality stocks on dips, he added.

Sanjay Dutt, Director of Quantum Securities, believes that from a long-term perspective, prospects of the market look better and will rise higher. The research firm sees around 15 percent upside from the current levels for both Sensex and the Nifty.

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The BSE Midcap index gained half a percent and smallcap rose 1 percent, though market breadth was marginally in favour of advances. About 1413 shares advanced against 1261 declining shares on the exchange.

Auto sales were mixed. Maruti Suzuki declined 1 percent and Ashok Leyland was down 3.4 percent after May sales data missed analysts’ expectations. M&M and Eicher Motors gained 0.5-1 percent after reporting 3 percent and 25 percent sales growth YoY, respectively.

Nifty Bank failed to hold on to opening gains, losing half a percent, largely hit by ICICI Bank that shed 2 percent on profit booking. HDFC Bank, SBI and Axis Bank were down 0.4-0.9 percent.

PSU oil & gas companies were under pressure today, with ONGC, GAIL, IOC, HPCL and BPCL down 1-4 percent. FMCG stocks continued to gain momentum on good monsoon hope, with ITC and HUL rising 0.8 percent and 2.7 percent, respectively.

Nifty Pharma index gained for third consecutive session after a 10-day fall, up nearly a percent. Sun Pharma rebounded 1.4 percent after a sell-off in previous session.

Among others, Reliance Industries, Infosys, Bharti Airtel, Lupin and Tata Steel fell 0.6-1.4 percent while L&T and Adani Ports gained 2-3 percent.

In broader space, Vijaya Bank, Karnataka Bank, DCB Bank, Ceat, Apollo Tyres, Avenue Supermarts, Voltas, Max Financial and Max Ventures rallied 4-10 percent.

Liquor stocks like United Spirits, Pincon Spirit and Globus Spirits gained 2-12 percent after Kerala High Court allowed liquor shops on stretch between Kannur, Vengalam and Kuttipuram.

Future Group stocks like Future Enterprises, Future Consumer, Future Retail and Future Lifestyle Fashions rallied 2-12 percent.
On the global front, European stocks were higher as investors eyed oil prices and continued to monitor politics in the region with UK elections just a week away. France’s CAC, Germany’s DAX and Britain’s FTSE were up 0.4-0.7 percent at the time of writing this article. Asia continued to close mixed.

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

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