The News International Team
It was a consolidation day for the market on Tuesday as investors turned cautious ahead of Maharashtra and Haryana elections that will be held on Wednesday. Benchmarks indices started of day on a strong note with more than 160 points gains on the Sensex due to easing CPI inflation in September and Reliance Industries’ Q2 earnings, but those gains could not sustain for long – the index lost as much as 170 points intraday. Post steep fall in WPI inflation, the index managed to trim losses.
The 30-share BSE Sensex fell 34.74 points to close at 26349.33 and the 50-share NSE Nifty declined 20.25 points to 7864.
Investors are currently awaiting the Maharashtra and Haryana state election results on the assumption that once this event is out of the way, the Prime Minister will finally settle down and look at administration changes and reforms, says Saurabh Mukherjea, chief executive officer, Institutional Equities at Ambit Capital.
“We need reforms to come in soon now. Also the next Budget will be very critical for the market as the July Budget was a damp squib. The government should be able to convey its focus on fiscal discipline come what may,” he adds.
Mukherjea isn’t too worried about global slowdown. He has a year-end target of 30000 on the Sensex with a 10 percent downside risk if the policy reforms don’t come in.
Equity, currency, commodity and debt market will remain shut on October 15 on account of general assembly elections in Maharashtra.
Meanwhile, wholesale price index (WPI) inflation in September eased to 2.38 percent (hit a five-year low) from 3.74 percent in previous month aided by lower food inflation which hit a 33-month low at 3.52 percent. The WPI was expected to come in at 3.1 percent.
The consumer price inflation data for the month of September, which was released yesterday, cooled off to its all-time low of 6.46 percent (the lowest since India started computing consumer price index (CPI) in January 2012) from 7.73 percent in August led by lower food prices and fuel costs.
Realty major DLF was the biggest loser, falling 28.5 percent to close at record low of Rs 104.95 after falling as much as 30 percent intraday at Rs 102.70 after Sebi barred company and its six executives from accessing capital markets for three years. Analysts say there will be no major impact on company’s operations but it will push forward any plans for further equity issuance and could postpone value unlocking.
Sesa Sterlite fell as much as 12.4 percent intraday post Supreme Court order but managed to recover in later part of the day, down just 0.3 percent at end after the company clarified that SC order on Goa mining is not related to company. Goa Mineral Ore Exporters’ Association also clarified that Supreme Court order will impact only a part of total inventorised cargo of 15.2 million tonne out of which Sesa’s share is seen to the tune of about 3-4 million tonne.
Among others, HDFC, Tata Motors, ITC, HDFC Bank, TCS, Infosys and ONGC were down 0.6-13 percent.
However, petrochemical and oil major Reliance Industries trimmed its gains in late trade to 0.3 percent. The stock gained as much as 2.3 percent intraday after reporting second quarter net profit at Rs 5,972 crore, beating street estimates, led by higher than expected USD 8.30 per barrel gross refining margins. Macquarie reiterated outperform rating on the stock, with a target of Rs 1100 while CLSA expects EBITDA to double over three years due to downstream capax plan.
Bajaj Auto rose 2.5 percent ahead of its September quarter earnings. A CNBC-TV18 poll sees net profit rising 4 percent to Rs 870 crore. Superior product mix, currency benefits and operating leverage are expected to aid margins.
State Bank of India, HUL, Bharti Airtel, BHEL, Tata Power and Coal India were other prominent gainers, up 1-4 percent.
On the global front, Asian markets closed mixed with the Nikkei falling over 2 percent. European markets declined with the France’s CAC, Germany’s DAX and Britain’s FTSE slipping 0.6-0.9 percent post economic data (at 16 hours IST).
Brent crude fell further, down 1 percent to USD 87.97 a barrel after oil producing countries like Saudi Arabia, Iran and Iraq denied oil output cut.
About 1303 shares advanced while 1624 shares declined on the Bombay Stock Exchange.