Thursday, 11 September 2014

Profit booking drags Sensex below 27K; mid & smallcap shine

4:30 PM: Profit booking drags Sensex below 27K; mid & smallcap shine
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Equity benchmarks fell for the third consecutive session on Thursday but the broader markets retained their outperformance supported by fertiliser, PSU banks, technology, auto and auto ancillary stocks.

The 30-share BSE Sensex closed below the 27000 level, down 61.54 points to 26995.87 while the 50-share NSE Nifty fell 8.40 points to 8085.70. However, the BSE Midcap and Smallcap indices were up 1-1.5 percent. The Midcap index gained for the ninth consecutive session while Smallcap rallied for the fifth straight day.

Experts feel the current pullback is a good thing as it would help the market to consolidate and build a strong base for the next leg of upmove. Infact, they advise buying on these dips because fundamentals of the economy started improving.

" I don't think the correction worries me at all . On the contrary it is quite positive... it gives an opportunity to people who were left out, it gives an opportunity for the additional money to come in at lower price points, lower valuations," said Kunj Bansal, ED & CIO, Centrum Wealth Management, adding that overall the market continued to be in an uptrend.

According to Nitin Jain, principal investment manager, Kotak Mahindra (UK) Partner, earnings growth will be the key driver for Indian stock market from hereon.

State-run oil & gas producer ONGC, top coal miner Coal India and hydro power generation company NHPC were down 3.6 percent, 3.5 percent and 4.9 percent, respectively after cabinet committee on economic affairs approved stake sale in these companies. The government will sell 5 percent stake sale in ONGC, 10 percent in Coal India and 11.36 percent in NHPC.

Drug maker Sun Pharma topped the buying list, down 4.3 percent on US drug regulator's surprise audit at the company’s Halol facility (which contributes 40 percent of US sales and 25 percent to consolidated profit) in Gujarat. In a ripple effect, Ranbaxy Labs, which is going to be a subsidiary of Sun soon, fell 4.6 percent.

Tata Motors declined 0.4 percent on reporting 11 percent degrowth month-on-month in August sales by UK subsidiary Jaguar Land Rover. Utility vehicle maker Mahindra and Mahindra fell for the second day, down 0.65 percent.
Top private sector lenders ICICI Bank and HDFC Bank saw marginal loss but rival Axis Bank gained 0.2 percent as Macquarie maintains outperform rating on the stock with a target price of Rs 447. According to the brokerage, the stress on incremental asset quality of the bank is easing.

However, PSU banks saw huge buying interest with the top lender State Bank of India gaining 1.9 percent. Syndicate Bank, Union Bank, Bank of India, OBC and Allahabad Bank gained 2.5-4 percent.

Among others, state-run power equipment maker BHEL, private power producer Tata Power, FMCG major HUL and two-wheeler maker Hero Motocorp climbed 1-1.5 percent.

Largecap IT stocks were mixed in trade but midcap IT names were strong in trade. TCS and Wipro fell 0.3 percent and 1.4 percent, respectively while Infosys rose 0.4 percent but Polaris Financial Technology and HCL Infosystems rallied 5 percent each. In the broader space, new F&O additions like Eicher Motors, Motherson Sumi, Mindtree, SKS Microfinance and TVS Motor rallied 2-9 percent.
Fertiliser stocks too were in action today with the GNFC, Chambal Fertilisers, Coromandel International, FACT, Madras Fertiliser, National Fertilisers and Zuari Agro Chemical surged 4-11 percent.
Gujarat State Fertilizers and Chemicals was locked at 20 percent upper circuit on company’s bullish outlook and confidence. In an analyst and fund manager meet the management said turnover of the company will rise to Rs 15000 crore over next five years. It is expecting FY15 to deliver almost 100 percent growth in profitability as fertiliser business has picked up.

Among others, HOEC, Future Consumer, Texmo Pipes, Balaji Telefilms, Gabriel India, Maxwell Industries, Abbott India and Infinite Computer spiked 10-20 percent. About two shares advanced for every one share declining on the Bombay Stock Exchange.


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  2. The BSE Midcap and Smallcap indices gained 0.2 percent each on positive breadth. About 1126 shares advanced against 720 declining shares on the exchange.capitalstars