The News International Team
After a choppy trade, equity benchmarks saw huge profit booking in last hour of trade on Wednesday, the expiry day of derivative contracts of December month. Frontline indices lost one percent each but the broader markets outperformed benchmarks.
The 50-share NSE Nifty closed below the 8200 level, down 92.90 points at 8174.10 and the 30-share BSE Sensex plunged 297.85 points to 27208.61, continuing decline for the second consecutive session today. However, the BSE Midcap and Smallcap indices closed flat with a positive bias.
For the series, the Sensex shed 4.3 percent and the Nifty lost 3.6 percent weighed by oil & gas, banks, technology, capital goods and metals stocks.
The equity and currency markets will remain shut on Thursday for Christmas holiday.
Meanwhile, the Cabinet today approved promulgation of an ordinance to hike foreign direct investment cap in the insurance sector to 49 percent from 26 percent. Insurance companies like Max India and HDFC Life say foreign investors may be tentative and uncertain till ordinance gets replaced by a law. Max India and Reliance Capital gained 2-4 percent.
Cabinet also cleared ordinance on coal and approved formula & methodology for floor/reserve price for coal auction with the first tranche of bid documents to be released on December 27. Coal and Insurance Bills could not get passed yet in the Rajya Sabha (upper house).
Mahesh Nandurkar, CLSA feels the BJP will continue to face headwinds till April 2018 as the party is unlikely to have clear majority in the upper house till then.
In national news today, former prime minister and BJP veteran Atal Bihari Vajpayee and freedom fighter Madan Mohan Malviya will be honoured with the country’s highest civilian award, the Bharat Ratna.
Sectors and Stocks
All BSE sectoral indices (except) Realty closed in red with the FMCG, Healthcare, IT and Oil & Gas indices down more than a percent.
Dr Reddy’s Labs lost 2 percent as reports suggested that Canadian importers agreed to quarantine products from the company’s Srikakulam plant.
Shares of HDFC, Infosys, HDFC Bank, TCS, ONGC, Larsen & Toubro, Mahindra & Mahindra, Sun Pharma, NTPC, BHEL and Gail were down 1-2 percent. However, Sesa Sterlite bucked the trend with minor gains.
UltraTech Cement and Jaiprakash Associates gained 3 percent and 9 percent, respectively on news that Ultratech will buy JP Associates’ two cement plants in Madhya Pradesh for Rs 5,400 crore. Deutsche Bank says it is another sweet deal for Ultratech Cement allowing it to truly become a pan-India player.
In the broader space, medical equipment maker Opto Circuits surged 15 percent after the Cabinet approved 100 percent foreign direct investment in medical devices.
Torrent Pharmaceuticals gained 4 percent after brokerage CLSA reinitiated coverage with a buy on stock and target price of Rs 1,260 apiece, citing strong earnings momentum going ahead. “Earnings momentum for Torrent is set to accelerate over the next two years led by an improving product mix and scale benefits in key markets of India and Brazil. Strong positioning in these markets which have high growth visibility and robust core earnings growth of 25 percent will support current valuations,” says the report.
3i Infotech was up 7 percent after its step down subsidiary agreed to sell Western Europe units to Objectway Financial Software, the wealth management and digital software solutions provider in Europe, the Middle East and Africa (EMEA).
Novartis gained 1.8 percent as Competition Commission of India cleared the deal between company and GSK Pharma Inc. GSK will acquire Novartis global human vaccines business and both companies will form consumer healthcare joint venture.
MTNL climbed 13 percent. Telecom ministry is likely to give incentives to BSNL and MTNL on December 25, reports media agency quoting unnamed sources.
About 1348 shares advanced while 1485 shares declined on the Bombay Stock Exchange.
It was a mixed bag for global equities today. Japan’s Nikkei moved higher with 1 percent gain while China’s Shanghai shed 2 percent. In Europe, France’s CAC was down 0.3 percent while Britain’s FTSE gained 0.2 percent ahead of Christmas holiday (at 16 hours IST).