Sensex closes mildly lower, rupee hits 2-month low after Fed meet; Pharma shines
The market trimmed its losses in last couple of hours of trade and ended mildly lower on Thursday. The Sensex fell 236 points intraday due to sharp depreciation in rupee post Federal Reserve hinted rate hike by December and announced unwinding of balance sheet, but recovered over 200 points in later part of session.
Banks, auto, FMCG and metals stocks pulled the market lower but healthcare stocks outperformed throughout session.
The 30-share BSE Sensex was down 30.47 points at 32,370.04 while the 50-share NSE Nifty held its psychological 10,100 level, falling 19.25 points to 10,121.90.
“The short term trend of Nifty is choppy with weak bias. The emergence of selling from near the all-time highs is not gaining momentum at the same time sharp buying is emerging from the lows,” Nagaraj Shetti, Technical Research Analyst, HDFC securities said.
This pattern could be encouraging signal for bulls to make a comeback again in the next few sessions, he feels.
The rupee fell sharply in trade today after the US Federal Reserve announced a plan to begin winding down its USD 4.5 trillion balance sheet (consists of treasuries and mortgage-backed securities) in October and hinted at another interest rate hike by December. The rupee dropped by 56 paise to 64.82 against the US dollar.
On the global front, Asian markets ended mostly lower while European markets were trading higher after Federal Reserve monetary policy meeting. Germany’s DAX and France’s CAC were up around 0.4 percent at the time of writing this article.
Back home, the broader markets underperformed benchmarks as the BSE Midcap and Smallcap indices lost 0.3-0.5 percent on weak breadth. Nearly two shares declined for every share rising on the BSE.
Pharma stocks were star performers of the day as the Nifty Pharma index ended with 3.3 percent gains following positive regulatory developments.
Dr Reddy’s Labs led the charge, rising 7.4 percent after receiving establishment inspection report from USFDA for its formulation unit at Srikakulam. Even the audit of CPS facility at Miyapur has been completed by US FDA with no observations.
Orchid Pharma was locked at 20 percent upper circuit after it received establishment inspection report for API manufacturing unit at Alathur in Tamil Nadu. Cadila Healthcare was up 3.5 percent as Zydus received approval from the US health regulator for Itraconazole 100 mg capsules.
Divis Labs rallied 5 percent as Axis Capital has upgraded rating on the stock to buy and hiked its target price to Rs 1,080 from Rs 625 per share, following increase in FY19 EPS estimates by 15 percent with improved visibility on US FDA resolution.
The rally also spilled over other pharma stocks – Ipca Labs, Sun Pharma, Cipla, Lupin, Glenmark Pharma and Aurobindo Pharma gained 1-16 percent.
Among others, HDFC and TCS advanced over a percent whereas ICICI Bank, Eicher Motors, Axis Bank, HCL Technologies, GAIL, ONGC, ACC and Bank of Baroda were down 1-2 percent. Index heavyweights Reliance Industries, HDFC Bank and ITC fell over half a percent.
Vivimed Labs rose 3 percent as its Hyderabad FDF manufacturing unit was approved & accredited with Good Manufacturing Practice Certificate from Ukraine ministry of Health.
Matrimony.com had a subdued listing today as the stock closed lower at Rs 901.20, down 8.5 percent from issue price of Rs 985 due to weak market condition.
Reliance Capital slipped 3.7 percent ahead of listing of Reliance Home Finance on Friday. ITI rallied 20 percent on winning Rs 7,000 crore ASCON Phase-IV project.
