North Korea crisis, ITC drag Sensex 148 pts but RIL, HDFC help Nifty hold 9,900
The market reversed previous day’s gains amid consolidation on Wednesday, tracking global weakness amid fears surrounding future relationship between US and North Korea.
FMCG, select technology, healthcare and banks stocks dragged the Sensex 147.58 points to 31,661.97.
The 50-share NSE Nifty also closed lower but managed to hold the 9,900 level on the back of support by Reliance Industries and HDFC Group stocks, down 36 points to 9,916.20.
“Markets are currently dancing on global tunes and there’s no clear indication from that front,” Jayant Manglik, President, Retail Distribution, Religare Securities said.
Traders shouldn’t venture into risky counters and prefer index majors for trading, he advised.
The broader markets, however, managed to rebound on bargain hunting. The BSE Midcap and Smallcap indices gained 0.17 percent and 0.35 percent, respectively. About 1,332 shares advanced against 1,239 declining shares on the BSE.
Global markets were under pressure today amid a backdrop of lingering geopolitical tension. European markets – France’s CAC, Germany’s DAX and Britain’s FTSE were down 0.1-0.7 percent at the time of writing this article. Asian markets also ended lower.
Back home, ITC was biggest contributor to Nifty’s losses, down 2.5 percent after Macquarie downgraded the stock to neutral and slashed target price to Rs 304 from Rs 340 on lower volumes.
Brokerage Jefferies also downgraded the stock to hold and also cut the target price, citing regulatory uncertainties leading to pressure on volumes and earnings growth.
Reliance Industries gained 0.8 percent today, taking total gains of six consecutive sessions to more than 7 percent as the stock will go ex-bonus on September 7.
In addition, global research firm CLSA sees several positive near-term triggers for the Reliance Industries, like a likely major cut in interconnect usage charge (IUC), Jio phone and gradual reduction in discounted tariffs. It has maintained its Buy rating with a target price of Rs 1,920 per share.
Kotak Mahindra Bank rose 0.8 percent after JPMorgan upgraded the stock to overweight as the bank is strongly positioned for growth. It has also raised target price on the stock to Rs 1,100 per share from Rs 875.
Coal India continued to its upmove for third consecutive session, up 0.77 percent on top of 6 percent gains in previous two days.
Sun Pharma was biggest loser among Nifty50 stocks, down 3.6 percent. CLSA has retained its sell rating with target price of Rs 370, saying the worrying trend is ex-Taro EBIT margins are on constant decline that collapsed to as low as 5 percent in Q1FY18. It expects margin to remain under pressure.
TCS, Axis Bank, Tata Motors, Lupin and HCL Technologies fell between 1 percent and 2 percent. Indiabulls Housing, UltraTech Cement and Hindalco Industries gained 1-2 percent while HDFC and HDFC Bank ended with moderate gains.
Among midcaps, Just Dial rallied 5 percent as HDFC MF bought 4.6 percent stake in the company through block deals. Bajaj Finance rose 3.6 percent on reports that the company launched QIP (qualified institutional placement) to raise up to Rs 4,500 crore.
Tata Global Beverages, Bajaj Finance, Bharat Financial, Container Corporation, JSW Steel, HDIL, CG Power and Karur Vysya Bank gained 2-4 percent.
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