Wednesday, 10 September 2014

Nifty closes below 8100, heavyweights drag Sensex 208 pts

4:30  PM: Nifty closes below 8100, heavyweights drag Sensex 208 pts

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Worries of Federal Reserve probably raising interest rates earlier than expected and profit booking spooked the Indian equity benchmarks. The rupee also saw depreciation against dollar.

The market extended losses for the second consecutive session today following Monday’s 293 points rally on the Sensex. The index lost 207.91 points or 0.76 percent to 27057.41 while the Nifty closed below the 8100 level, down 58.85 points or 0.72 percent.

However, the broader markets outperformed benchmarks with the BSE Midcap and Smallcap indices rising 0.08 percent and 0.6 percent, respectively.

The market saw some profit booking and consolidation after hitting record highs on Monday, which may continue for some more time, believe experts. However, they don’t rule out market hitting new record highs going ahead.

“Markets seem to be taking a much needed pause and consolidating, which could potentially provide good entry points and a renewed vigor for its journey northwards,” said Devang Mehta, senior VP & Head - Equity Advisory, Anand Rathi Financial Services.

According to him, the mood seems to be buoyant and sentiment upbeat with good all-round participation by various set of investors. Good quality midcaps which still have decent valuation and price upside are coming to the fore, he added.

Meanwhile, the rupee touched nearly one month low of 61.02 against dollar intraday, though it recovered in late trade.

On the sectoral front, banking and financials (barring ICICI Bank), capital goods, oil and gas, cigarette and FMCG stocks declined while metals and shipping stocks saw buying interest.

Shares of Cairn India, Infosys, Reliance Industries, HDFC, Larsen and Toubro, HDFC Bank, TCS, Hero Motocorp and Coal India were prominent losers, down 1-2.7 percent.

Utility vehicle maker Mahindra and Mahindra declined 1.4 percent as Kotak Institutional Equities cut rating on the automaker to reduce from add, lowering the target price to Rs 1,310 from Rs 1,404 apiece. Kotak said M&M lost 13 percent market share in the utility vehicle segment over the past two years, describing that as a "significant loss".

Cigarette producers like ITC, Godfrey Phillips and VST Industries declined 2-6 percent on reports of government tightening norms to put a check on smoking.

However, top private sector lender ICICI Bank bucked the trend, up 1.5 percent as the bank announced the sub-division of shares from Rs 10 to Rs 2. Sesa Sterlite, Bajaj Auto and Tata Power were other gainers, rising 1-1.6 percent.

Shipping stocks like shipping stocks Bharati Shipyard, Mercator, Varun Shipping and SCI surged 5-19 percent as in a bid to promote domestic shipbuilding industry, the government is mulling a financial assistance scheme, which could include a shipbuilding fund to provide soft loans to players.

Largest private sector shipbuilder ABG Shipyard gained 13 percent as it will receive Rs 650 crore infusion from lenders by this month-end as part of the Rs 10,000-crore debt recast deal worked out in March, a top company official has said. Advancers beat decliners on the Bombay Stock Exchange by a ratio of 1743 to 1272.


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