The News International Team
Equity benchmarks lost zeal to rally further on Wednesday as investors preferred profit-taking after six-day gains. Oil and gas, banking and financials and FMCG stocks dragged the market while healthcare stocks bucked the trend with huge gains.
The 30-share BSE Sensex declined 106.38 points to 26314.29 and the 50-share NSE Nifty fell 22.20 points to 7875.30 after rallying more than 4 percent in past six consecutive sessions. However, the broader markets outperformed benchmarks with the BSE Midcap and Smallcap gaining 0.06 percent and 0.93 percent, respectively.
The weakness seen in today’s trade was just a profit booking amid consolidation and that may continue for rest of the week, say experts. They advise buying largecaps on every correction.
“We remain positive on the market and recommend buying large cap quality stocks on any weakness,” say Rakesh Arora, Macquarie, adding global newsflow may come back to dominate.
State-run ONGC was the top loser among largecaps, down 2.8 percent followed by ITC, Reliance Industries, Tata Motors, Larsen and Toubro, HDFC, State Bank of India, Axis Bank and Mahindra and Mahindra with 1-1.5 percent.
Private sector lender HDFC Bank, which rallied more than a percent in early trade, lost ground in last couple of hours of trade on profit booking. Media report indicated that Foreign Investment Promotion Board (FIPB) may take up bank’s FDI proposal in next meeting.
The fall in banks stocks may also be because of loan growth concerns in near term. CLSA, in its note, says loan growth for Indian banks may fall to less than 10 percent in August-September 2014 due to a high base effect and subdued demand near term. However, it expects growth to recover thereafter led by normalisation of base, uptick in demand and market-share gains from mutual-fund products; FY15 credit growth is likely to be 15%. The brokerage advises buying banks stocks on every weakness.
However, pharma stocks hogged the limelight with the BSE Healthcare Index surging 3 percent on huge buying. Not only largecap but also midcap and smallcap stocks too were on buyers’ radar. Sun Pharma, Cipla and Dr Reddy’s Labs were prominent gainers among largecaps, up 4.64 percent, 3.8 percent and 2.25 percent, respectively.
In the broader space, Shasun Pharma, Indoco Remedies, Sun Pharma Advanced, Marksans Pharma, Nectar Life and Alembic Pharmaceuticals gained 5-14 percent.
Venus Remedies jumped 5 percent after it received first marketing authorisation from Swiss drug authority in Switzerland for anti-cancer drug Gemcitabine while Cadila Healthcare rose over a percent on getting approval from US Food and Drug Administration for anti-viral drug Acyclovir. Glenmark Pharma was up 0.4 percent as it entered into oncology with discovery and initiation of an innovative bispecific antibody, GBR 1302 molecule.
However, public sector lenders Dena Bank and Oriental Bank of Commerce dropped 5 percent and 3.6 percent, respectively after a media report indicated that the Mumbai-based branches of these banks have misappropriated funds to the tune of Rs 436 crore. However, while clarifying the same, SL Bansal, chairman and managing director, OBC told CNBC-TV18 that the bank has recovered Rs 110 crore of the entire Rs 180 crore that were misappropriated in the fixed deposit scam.
Advancers beat decliners on the Bombay Stock Exchange by a ratio of 1691 to 1291.