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Sensex falls 244 pts, Nifty ends below 8050; pharma steady

14:00

The News International Team
Live Market Commentary

03:30 Market closing:

After a tough struggle, the market ended on a lower note. The Sensex was down 244.48 points or 0.9 percent at 26816.56 and the Nifty slipped 63.50 points or 0.8 percent at 8042.00. About 1750 shares advanced, 1310 shares declined, and 96 shares were unchanged.

Cipla, Hero, Dr Reddy’s Labs, HDFC Bank and Infosys were top gainers while Hindalco, Tata Steel, ONGC, Sesa Sterlite and Coal India were among the laggards.

02:55pm Atlas Cycle in demand

Atlas Cycle rallied 8 percent after Uttar Pradesh Chief Minister Akhilesh Yadav announced exemption of VAT for bicycles costing less than Rs 3,500.

“A large number of population in the state uses bicycles as their mode of conveyance specially farmers, labourers, students and the poor people and is used in both urban and rural areas,” a press release quoting the Chief Minister said here.

“It is most necessary to give impetus to the economic growth of poor and weaker sections of society”, he said while deciding to remove VAT on bicycles costing less than Rs 3,500.

Therefore, keeping in view the welfare of these sections, the state government has decided to lower the cost of bicycles”, he said.

The Chief Minister said bicycle is also a mode of travel which is pollution free and helps in fitness, reports PTI.

02:40pm Shipping stocks on buyers’ radar

ABG Shipyard, Essar Shipping and GE Shipping rallied more than 7 percent followed by Bharati Shipyard, Shipping Corporation, Shreyas Shipping and Varun Shipping with 3.5-5 percent.

Transport Minister Nitin Gadkari says the cabinet note on shipbuilding policy is ready.

02:30pm Lupin at record high

Shares of Lupin hit a record high of Rs 1,386 on the Bombay Stock Exchange on a media report that the company is in advanced talks to sign a blockbuster deal with Merck Serono.

As part of the deal, Lupin will manufacture Merck Serono’s USD 1.5 billion worth branded mature drugs at its facilities, a media report said quoting unnamed sources.

Meanwhile, Citi says business development remains a core part of Lupin’s growth strategy, with the latest deal (Salix) providing it a good foothold in Canada.

Lupin on last Friday entered into a definitive agreement with Salix Pharmaceuticals. Under this agreement, Salix granted Lupin the exclusive right to market, distribute and sell certain Salix products in Canada.

02:20pm Rupee weakens further

Indian rupee is trading at 61.10 a dollar, down 45 paise compared to Friday’s close.

Brokerage house Emkay Share & Stock Brokers feels a combination of global events, slower-than-expected GDP growth and a fairly valued rupee could drag the currency down to 63-64 to the dollar over the next six months.

In the last few months, the dollar has strengthened against developing market currencies, mainly the Euro, due to the diverging monetary policies being followed by the US Fed and the ECB.

The dollar index has been now climbing for 9 weeks in a row and is currently trading above 84, with the US dollar quoting close to a six-year high against the Japanese.

But the strength in emerging market currencies is unlikely to sustain, and a trend reversal is on the cards, feels Dhananjay Sinha, Head of Research, Emkay.

02:10pm Inflation at 5-year low

Inflation data based on wholesale price index (WPI) for August hit a five-year low at 3.74 percent courtesy declining vegetable prices and other food articles. August WPI inflation stood at 5.19 percent in July. A CNBC-TV18 poll estimated it to be at 4.1 percent.

Food inflation in August hit a lowest level since January 2012. It eased to 5.15 percent versus 8.43 percent on a month-on-month (MoM) basis. Vegetable prices contracted 4.88 percent.

Further, August fuel inflation also hit a five-year low with the fuel and power group inflation declining to 4.54 percent versus 7.40 percent (MoM).

02:00pm Equity benchmarks continued to reel under selling pressure with the Sensex declining 194.86 points to 26866.18 and the Nifty falling 54.45 points to 8051.05 despite fall in inflation but the broader markets outperform.

The BSE Midcap and Smallcap indices gained 0.4 percent and 0.77 percent, respectively. Advancing shares outnumbered declining ones by a ratio of 1707 to 1223 on the BSE.

Shares of TCS, HDFC, ITC, Reliance Industries, ONGC, Infosys, Larsen and Toubro, ICICI Bank, Mahindra and Mahindra, Tata Motors and Axis Bank rallied 0.7-1.8 percent.

Jindal Steel and Hindalco Industries remained top losers, down 3-4 percent while Cipla kept its top position in the buying list, up 2.5 percent followed by Hero Motocorp with 1.5 percent. HDFC Bank, SBI, BHEL, and Dr Reddy’s Labs advanced 0.4-0.6 percent.
 
In the midcap space, GSFC, Trent, Zydus Wellness, Fortis Healthcare and ABG Shipyard surged 8-11 percent while HMT, Tilak Finance, Kaveri Seed, Bhushan Steel and Jaypee Infra lost 4-7 percent.

Among smallcaps, NDTV, Minda Industries, MBL Infra, Hubtown and Zensar Tech jumped 11-20 percent whereas PFL Infotech, Signet Industries, Pearl Agri, Swadeshi Industries and Sanghi Industries slipped 5-20 percent.

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