Global weakness drags Sensex, Nifty for 2nd day but midcap outperforms
Equity benchmarks extended losses for second day on Wednesday, with the Nifty closing below 9650 on profit-booking and weakness in global peers.
The fall could be on the back of likely outflow of money after addition of China A-shares in MSCI Emerging Markets Index. Investors also remained cautious ahead of GST rollout from July 1 and RBI minutes due later today.
The 30-share BSE Sensex fell 13.89 points at 31,283.64 and the 50-share NSE Nifty slipped 19.90 points to 9,633.60.
The MSCI decided to add China A-shares to its benchmark MSCI Emerging Markets Index, with an initial weightage of 0.73 percent. Experts feel the inclusion of 222 China A large cap stocks is unlikely to have any major impact on India but there may be outflow of around USD 215 million in the near term due to rebalance of portfolios across the globe by fund managers.
On the global front, European markets were lower after further correction in oil prices. France’s CAC, Germany’s DAX and Britain’s FTSE were down 0.3-1 percent at the time of writing this article.
Asia also ended mostly lower, with Hong Kong’s Hang Seng down 0.6 percent and Japan’s Nikkei down 0.5 percent but China’s Shanghai gained 0.5 percent on addition of China A shares in MSCI Emerging Markets Index.
Back home, the broader markets outperformed benchmarks despite negative breadth, closing flat with a positive bias. About 1,366 shares declined against 1,263 advancing shares on the exchange.
FMCG was biggest gainer among sectoral indices, up 0.77 percent while Nifty Metal lost a percent.
Hindustan Unilever ended at record closing high of Rs 1,123.70, up 2.5 percent followed by ITC with 0.2 percent gains.
Healthcare stocks were also in action today but Lupin (down 1.6 percent) and Cipla (down 1 percent) pulled Nifty Pharma index lower by 0.26 percent.
Sun Pharma gained 0.8 percent as subsidiary Taro received approval from US FDA for anti-convulsion drug, Felbamate and Ranbaxy got approval from US FDA’s REMS (risk evaluation & mitigation strategy) for acne prevention drug, Absorica tablet.
Dr Reddy’s Labs added half a percent on US FDA’s REMS approval for acne prevention drug, Zenatane capsule. Alembic Pharma surged 2 percent on approval from US FDA nod for hypertension drug, Candesartan cilexetil tablets.
Correction in global oil prices pushed shares of oil marketing companies (IOC, HPCL, BPCL) down nearly 1 percent but helped aviation stocks (Jet Airways, SpiceJet and InterGlobe Aviation) gain 1.5-4 percent.
TCS was down 1.5 percent as CLSA lowered earnings estimates for Q1FY18 as well as for FY18-20 due to likely rupee strength and wage hikes, though it has maintained its buy rating.
Among other largecaps, Tata Motors, Adani Ports, ONGC and Hero Motocorp were down 1-2 percent while HDFC Bank, Kotak Mahindra Bank, Reliance Industries, Maruti Suzuki and Asian Paints gained 0.4-0.9 percent.
In broader space, Amtek Auto was locked at 10 percent upper circuit on a media report indicated that 21 investors showed interest to buy a stake in the debt-ridden company.
Monnet Ispat surged 17 percent as sources told CNBC-TV18 that Joint Lenders Forum has given a nod to sending Monnet Ispat case to National Company Law Tribunal and assent to file application under Insolvency & Bankruptcy Code.
