The News International Team
Equity benchmarks snapped six-day winning streak due to profit booking on Monday. Both frontline indices failed to hold the psychological levels (8400 on Nifty and 28000 on Sensex). Technology, PSU banks, telecom, HDFC twins and select metals stocks were under pressure whereas auto and FMCG stocks bucked the trend.
The 30-share BSE Sensex declined 45.58 points to 27842.32 and the 50-share NSE Nifty fell 17.05 points to 8378.40 after hitting intraday highs of 28064.49 and 8445.60, respectively. The broader markets outperformed frontline indices with the BSE Midcap and Smallcap indices closing flat with positive bias.
Experts feel the market may consolidate ahead of December quarter earnings season that will kick off with Infosys on Friday. According to them, 15 percent earnings growth by India Inc can be possible in current calendar year.
The Nifty might inch toward 9000 by Budget if not before, is the word coming in from Andrew Holland, Ambit Investment Advisors. He says there is a lot of expectation from finance minister Arun Jaitley and most people believe that almost every sector will be a winner.
Meanwhile, Hiren Ved, director and CIO, Alchemy Capital Management believes 2015 will be a good year for Indian equities. According to him, there is a lot of macro positives like lower oil prices, slide in interest rates and a hope of earnings pick up from next quarter that might continue driving the market.
PSU banks were in focus today after the 2-day meet, ‘Gyan Sangam’. In a blueprint, seven recommendations provided by PSU banks to the government, saying setting up a bank bureau and a bank investment company and eventually a reduced government shareholding to below 51 percent. Banks fell on profit booking; State Bank of India and Punjab National Bank declined nearly a percent.
Telecom operator Bharti Airtel and drug maker Dr Reddy’s Labs were top losers, down more than 2 percent. HDFC, Reliance Industries, HDFC Bank, Hindalco Industries and Sesa Sterlite declined 0.6-1.9 percent.
TCS and Infosys lost around a percent ahead of earnings season. Deutsche Bank (in its note to client) said a double whammy of seasonal weakness and cross-currency headwinds may have hurt dollar revenues of frontline IT services firms during the December quarter.
However, car maker Maruti Suzuki surged 2.6 percent as CLSA retains the company as top auto pick in 2015. The brokerage reiterates buy with a target price of Rs 4,400/share on the stock as it believes new products & exports will boost volume growth, margins will expand on yen weakness and expects premium PE multiples to sustain.
Engineering and construction major Larsen and Toubro was up 1.4 percent as Citi upgraded the stock to buy from neutral and raised target price to Rs 1,849/share from Rs 1,707/share.
Among others, Tata Motors was up 2.4 percent. ONGC and Tata Steel gained more than a percent.
In the broader space, Cadila Healthcare climbed over 4 percent as Credit Suisse maintains outperform rating and raised target price to Rs 1,900/share and also raised FY15/16/17e EPS by 10/14/23 percent. The brokerage believes the benefit of higher prices and market share will be visible in the December quarter and the company is one of preferred picks due to strong US pipeline.
Ashok Leyland jumped over 8 percent on strong December auto sales numbers. Total sales grew by 48 percent at 9290 units in the month gone by Y-o-Y.
Tata Teleservices surged 5.6 percent as NTT Docomo filed an arbitration request on January 3 with the London Court of International Arbitration to ensure its stake in company is sold after Tata failed to do so by December 3, 2014. Tata Sons said they are committed to honouring company’s obligations to NTT Docomo and they have made application to RBI.
Ashiana Housing was up 5 percent as CARE revised its credit rating upwards from BBB+ to A- while Fedders Lloyd rallied 10 percent as it bagged orders worth Rs 106.99 crore from Odisha Power Transmission Corporation.
Va Tech Wabag spiked 6 percent as the company won an order of Rs 220 crore for the Ganga pollution treatment.
Among others, Core Education, GSPL, Elder Pharma, Tilaknagar Industries, Zee Mdia, Unitech, DHFL, IVRCL, Apollo Tyres and JK Tyre were up 3-18 percent.
However, IRB Infrastructure fell 8 percent as CBI conducted raids and searches at company’s offices in Pune and Mumbai.
About 1563 shares advanced while 1419 shares declined on the Bombay Stock Exchange.