Market Live: Sensex, Nifty off day#39;s high on correction in pharma stocks

12.19 pm Market Check: Benchmark indices continued to be rangebound in afternoon trade, with the Nifty hovering around 9,600 level due to lack of global as well as domestic cues. Experts feel GST implementation and June quarter earnings would be next triggers.

The 30-share BSE Sensex rose 26.60 points to 31,102.33 and the 50-share NSE Nifty was up 8.60 points at 9,586.65.

The BSE Midcap and Smallcap indices outperformed benchmarks, up 0.2-0.4 percent on positive market breadth. About 1,330 shares advanced against 1,073 declining shares on the BSE.

Lupin topped the selling list among Sensex stocks, down more than 4 percent followed by Dr Reddy’s Labs, Infosys, Sun Pharma and Wipro while ITC, HDFC and Tata Motors were gainers.

11:50 am BoAML on RIL: While it is good that RIL has decided to restart projects in D6, these are currently long dated projects, Bank of America Merrill Lynch said.

The new D6 fields could add USD 1.3 billion (2 percent) to RIL sum-of-the-parts, but more importantly drive core earnings growth post the ongoing chemical projects (in the FY21-22 period), it said.

The new energy partnership is still in early stages and needs definition. Spending, inflow on this will take time, it feels.

In the near term, the RIL stock should depend on Jio’s revenue fortunes, which may become clear only around September/December 2017. With 5 percent upside potential, it stayed neutral on the stock, BoAML said.

11:30 am Technical outlook: Domestic equity benchmarks regained bullish momentum since the start of CY17 after climbing the wall of worries in the backdrop of demonetisation and rate hike by the US Federal Reserve. A slew of financial and legislative reforms coupled with good monsoon forecasts for 2017 have boosted investor sentiments, ICICIdirect said.

The Nifty has behaved in line with expectations as it registered a breakout past two year consolidation and went onto achieve target of 9600, it added.

Based on the findings from bottom up analysis, the research house believes the renewed strength among major underlying constituents will continue to fuel the up move in Nifty towards 10500-10700 zone over the medium term.

Within the ongoing uptrend, there will be intermediate phases of consolidation that shall provide fresh opportunities, it said. It believes the support base for Nifty has shifted upwards to 8800-8900 zone. Any intermediate cool off from here on should be used as incremental buying opportunity, it advised.

11:10 am Market Check: Equity benchmarks erased some early gains on sharp correction in healthcare stocks.

Lupin fell 5 percent followed by Sun Pharma, Cipla and Dr Reddy’s Labs. Infosys and HUL too were under pressure.

However, Reliance Industries rebounded after early losses, up 0.5 percent. ITC, Tata Motors, HDFC and HDFC Bank continued to support the market.

The 30-share BSE Sensex was up 16.82 points at 31,092.55 and the 50-share NSE Nifty rose 14.75 points to 9,592.80.

10:50 am Market Outlook: After a sharp rally witnessed so far in the last 12 months, the market does looks expensive and the valuations have stopped making sense, Sanjeev Prasad, Sr ED & Co-Head, Kotak Institutional Equities said in an interview with CNBC-TV18.

“If you look at market valuations, it has stopped making sense. If we look at Nifty, it is trading 20x March 18 numbers, which is still expensive. The bigger challenge is that the composition of Nifty has got nothing to do with India,” he said.

“As much as 60 percent of the earnings are either got to do with global commodity stocks or global commodity companies,” said Prasad. The bottom line is that I really can’t find too much value in this market, he added.

10:25 am CLSA on RIL: Reliance and British Petroleum announced a USD 6 billion plan to develop discoveries in the D6 block which will deliver sustainable production of 30-35mmscmd beyond 2022.

The partnership has also been expanded beyond upstream to focus on fuel marketing, unconventional energy and new technology initiatives, to deliver value to customers.

“While these are clear long-term positives, start of projects worth over USD 40 billion in next 6- 9 months remains the key near-term trigger for the stock,” CLSA said while retaining buy call on the stock.

Disclosure: Reliance Industries owns Network 18 and Moneycontrol.com.

10:00 am Market check: Equity benchmarks continued to trade marginally higher in morning trade but the broader markets outperformed.

The 30-share BSE Sensex was up 36.37 points at 31,112.10 and the 50-share NSE Nifty rose 22.55 points to 9,600.60 while the BSE Midcap and Smallcap indices gained over half a percent on positive market breadth.

About two shares advanced for every share falling on the BSE.

ITC, Tata Motors, ICICI Bank, M&M and Axis Bank were top contributors to Sensex’ gains while Reliance Industries, Infosys, Wipro and TCS were under pressure.

9:30 am FII View: Ridham Desai of Morgan Stanley said three-month return correlations across stocks have plummeted to single-digit levels for only the third time in 15 years.

The previous two occasions were accompanied by a major upward move in the market.

“The directional view on the market is more difficult for us to judge, even though in our base case we think that the pace of returns will slow down in the second half of 2017, Desai said.

Also read – Buy, Sell, Hold: 3 stocks and 1 sector on analysts’ radar today

9:15 am Market Check: Equity benchmarks opened moderately higher on Friday, with the Nifty reclaiming 9600 level despite mixed Asia trade.

The 30-share BSE Sensex was up 66.32 points at 31,142.05 and the 50-share NSE Nifty rose 26.40 points to 9,604.45.

HDFC Bank and Tata Motors were leaders in early trade while Infosys, Reliance Industries, HDFC and Asian Paints were under pressure.

The broader markets marginally outperformed benchmarks, with the BSE Midcap and Smallcap indices rising 0.4 percent each. Four shares advanced for every share falling on the National Stock Exchange.

Bhushan Steel (down 3 percent), Jyoti Structures (down 13 percent) and Amtek Auto (down 13 percent) were sharply under pressure after sources told CNBC-TV18 that these companies are in the list of 12 accounts to be sent to Insolvency and Bankruptcy Code (IBC).

Ipca Labs was down 13 percent after USFDA said all drugs manufactured at Ratlam unit will not be allowed to sell in the US.

BPCL, HPCL and IOC gained 1-3 percent.

The Indian rupee declined in the early trade. It has opened lower by 12 paise at 64.66 per dollar, lowest level since May 30, against 64.54 on Thursday.

Ashutosh Raina of HDFC Bank said the shrinking of Fed balance sheet can impact the EM currencies including rupee, and one can expect some weakness going ahead. He expects the USD/INR currency pair to trade in 64.40-64.70/dollar range today.
Indexes in Asia traded mixed following the declines in tech stocks on Wall Street and the Bank of Japan announced monetary policy. Japan’s benchmark Nikkei 225 index gained 0.53 percent while South Korea’s Kospi erased earlier gains to trade lower by 0.11 percent.