Sensex Falls For Second Day; PSU Bank, Pharma Stocks Weigh

Foreign institutional investors sold shares worth Rs 400 crore on Tuesday.

Foreign institutional investors sold shares worth Rs. 400 crore on Tuesday.
The Sensex and Nifty ended lower in today’s session on the back of broad-based selloff. Earlier in the day, the Sensex rose as much as 169 points and Nifty intraday touched high of 9,432 on the back of better-than-expected earnings reported by Tata Motors. However, in the noon deals, the benchmark indices fell from the highs amid geo-political tensions between India and Pakistan. In today’s session, state-run banking, metal, pharma and real estate stocks were among the worst hit.

Analysts say the Indian markets have showcased a stellar rally in last six months wherein the Nifty has moved up from levels of 7,890 all the way up to 9,500 and the ongoing correction is a welcome move as it will help in lowering expensive valuations.

AK Prabhakar, head of research at IDBI Capital Markets and Securities, says, “The Indian markets have been moving higher since the last six months and some profit-booking is expected which is a healthy sign for the markets. Meanwhile, the trigger for the recent correction is geo-political tensions along the border between India and Pakistan.”

The Senex ended 64 points lower at 30,302 and Nifty declined 26 points to settle at 9,361.

From the Nifty basket of shares, 37 ended lower while 14 closed higher. Bank of Baroda was the top Nifty loser, down 3.43 per cent at Rs. 175.75. Larsen & Toubro, Aurobindo Pharma, Cipla, Dr Reddy’s Labs, Lupin, ACC and Hindalco were also among the top losers in the Nifty. On the other hand, Tata Motors was the top Nifty gainer after the company surprised the Street with better-than-expected March quarter earnings. GAIL India, Adani Ports, Yes Bank, Indian Oil and TCS were also among the losers.

The broader markets underperformed the benchmark indices. The BSE mid-cap and small-cap indices fell 1.4 per cent each.

The overall market breadth was extremely bearish as 2,034 shares ended lower while 657 closed higher on the BSE.

Here are the key highlights of today’s session:

3:14 pm: Lupin reports net profit of Rs. 380 crore on sales of Rs. 4,253 crore. Misses street estimate, shares fall as much as 6.6 per cent to Rs. 1,167.

2:45 pm: Reliance Communications shares slump 10 per cent hits record low of Rs. 25.30 on reports that company’s credit rating was cut as the carrier struggles to compete in mobile-phone market.

2:11 pm: NMDC, Vedanta, SAIL, Hindustan Zinc, Hindalco, Tata Steel and NALCO were among the top losers from the metals space.

1.35 pm: Selling pressure visible across the board. Realty, metal, power and auto shares among the worst hit.

1:10 pm: Market breadth turns bearish as 1,757 shares were declining while 734 were advancing on the BSE.

1:01 pm: Bharat Forge shares rise as much as 3.1 per cent to hit intraday high of Rs. 1,080 as company reports that its net profit in March quarter rose to Rs. 207 crore from Rs. 165 crore during the same period a year ago. Its revenues from operations came on at Rs. 1,183 crore.

12:45 pm: Solar Industries, Voltas, BEML, Shree Cements, Jubilant FoodWorks, Yes Bank and Sintex were among some of the shares witnessing spurt in volumes on the BSE.

12:37 pm: Hemant Kanawala, head of equity at Kotak Life Insurance, says valuations have corrected for pharma sector and there is no reason to increase exposure to pharma companies. He however, adds that one needs a bottoms-up approach for investing in pharma companies.

12:24 pm: Shares of Voltas Ltd jumped as much as 10 per cent to hit intraday high of Rs. 450.80 after the company post market hours on reported that better-than-expected net profit of Rs. 200 crore on sales of Rs. 2,021 crore. Analysts on an average expected the AC maker to report net profit of Rs. 142 crore.

12:03 pm: The overall market breadth remains neutral as 1.227 shares were declining while 1,139 were advancing on the BSE.

11:42 am: Videocon Industries was the top loser from the small-cap space, the stock was locked in lower circuit, down 10 per cent at Rs. 58.35. Prabhat Dairy, NCC, Cupid Ltd, Gujarat NRE Coke DVR and Flexituff International were also among the losers from the small-cap space.

11:15 am: Shares of Videocon Industries fall for third day in a row. Crashes 42 per cent in three sessions after Dena Bank became the first bank to recognise loan given to Videocon Industries as a non-performing asset.

11:07 am: Deven Choksey, MD of KR Choksey Securities, said: “Many pharma companies are reasonably valued and in some cases they are quoting at attractive valuations. There is some amount of pricing pressure on pharma companies and my reading says that Indian pharma is in a safe zone and it is time to buy shares in some pharma companies for two years and above.”

10:55 am: Pharma shares were witnessing selling pressure. The Nifty pharma index was down 0.7 per cent; Dr Reddy’s Labs, Piramal Enterprises, Glenmark Pharma, Biocon, Cadila Healthcare and Cipla were also among the losers.

10:34 am: Tata Motors shares surged over 5 per cent on Wednesday after the Jaguar Land Rover (JLR) owner reported strong earnings in the January-March quarter post market hours on Tuesday. Tata Motors reported a consolidated net profit of Rs. 4,336 crore in Q4 which was ahead of Street estimates. Analysts polled by NDTV Profit had estimated its net profit at Rs. 2,810 crore.

10:08 am: The overall market breadth was marginally negative as 1,045 stocks were advancing while 912 were declining on the BSE.

9:56 am: Max Financial Services was the top loser from the mid-cap space, down 5.78 per cent at Rs. 585. IDBI Bank, Union Bank, Biocon, Central Bank of India, GMR Infra and Glenmark Pharma were also among the losers from this space.

9:49 am: Stock markets give up initial gains. The Sensex was up 71 points at 30,436 and Nifty was at 9,394, up 8 points.

9:32 am: PSU banking shares were witnessing selling pressure for third day in a row. The Nifty PSU index was down 1 per cent; IDBI Bank was the top loser from the PSU banking space, down 3.2 per cent at Rs. 62.85. Union Bank of India, Syndicate Bank, Oriental Bank of Commerce, Bank of India, Allahabad Bank and Andhra Bank were also among the losers, down 1.35-3 per cent.

9:25 am: The broader markets were trading on a flat note. The BSE mid-cap index was down 0.05 per cent and the small-cap index was up 0.16 per cent.

9:20 am: From the Nifty basket of shares, 27 were trading lower while 24 were advancing. HCL Technologies was the top Nifty loser, down 2 per cent at Rs. 847. Aurobindo Pharma, Bank of Baroda, Bharti Infratel, Sun Pharma, Eicher Motors and UltraTech Cement were also among the losers. On the other hand, Tata Motors, Tata Motors DVR, Adani Ports, HDFC, Power Grid, TCS and Larsen & Toubro were among the gainers.

9:09 am: Tata Motors on Tuesday reported a 17 percent fall in fourth-quarter net profit, hurt by lower income from operations. Consolidated net profit for the three months to March 31 fell to Rs. 4,336 crore from Rs. 5,211 crore a year earlier. Analysts had expected the company to post a profit of Rs. 2,695 crore, according to Thomson Reuters data.

Foreign institutional investors sold shares worth Rs. 400 crore on Tuesday while domestic institutional investors bought shares worth Rs. 352 crore.

Lupin will report its March quarter earnings later in the day. Analysts expect the company net profit to fall to Rs. 638 crore from Rs. 807 crore during the same period a year ago. EBITDA margin (operating profit) is expected to come down to 25.2 per cent from 31 per cent in March quarter of last financial year.

Adani Ports will also report its earnings today. Analysts expect the company to report net profit of Rs. 946 crore on sales of Rs. 2,304 crore.
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Story first published on: May 24, 2017 09:09 (IST)


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Loknath Das

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