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Sensex remains below 27000; midcap, smallcap outperform

14:21

The News International Team
Live Market Commentary

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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