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Sensex falls 200 pts; Bajaj Auto slips, Eicher Maruti up

12:01

The News International Team

12:30pm Market Expert

As far as markets are concerned, the middle of the last week where it was at around 8900, I had expressed concern that the Sensex juggernaut looked likely to halt in the short-term because we were at that point in time trading at 13 percent premium to last 10 years’ average, said Ajay Bodke, Head – Investment Strategy and Advisory at Prabhudas Lilladher, adding that the Nifty has seen a 100-point correction from there.

It was a rude check for the markets, the way PSU banks came out with numbers last week. Even private bank behemoth ICICI Bank showcased stress in its loans.

Bodke said the Nifty is still trading at 11.3 percent premium (to last 10 year’s average) and hence he expects another 2-3 percent correction. More so, he sees global cues to further drag it down.

According to him, the banking sector is clearly the weakest spot.

12:00pm Market Check

The market extended losses amid consolidation in noon trade. The 30-share BSE Sensex fell 211.23 points to 28971.72 and the Nifty shed 52 points to 8756.90 led by weakness in financials, auto stocks and select FMCG names.

However, the BSE Midcap and Smallcap indices outperformed benchmarks, up 0.5-0.7 percent. Advancing shares outnumbered declining ones by a ratio of 1419 to 1080 on the BSE.

Bajaj Auto slumped 2 percent after the company posted a 9 percent drop in January auto sales, the lowest in 18 months. Rajiv Bajaj told CNBC-TV18 that the impact came on the back of the excise duty hike. He is hopeful of a bump in exports post Nigeria polls next month. On the other hand, Maruti Suzuki recorded a 14 percent jump in total sales led by the near doubling in export sales. The stock gained 1.5 percent. Eicher Motors too gained 2 percent post a 25 percent rise in total sales.

Future Retail surged 11 percent as the company announced its plans to apply for a payment bank license. The new entity, if approved will be named nu-future payments bank. Reports suggest that the new payment bank will not come under any listed entity. Additionally, sources indicate that IDFC too may pick up a stake in the payments bank.

Despite posting a weak set of Q3 earnings, Monsanto rallied over 13 percent and posted a fresh 52-week high on reports that genetically modified crops could soon become a reality in India. Advanta too gained about 4 percent.

Berger Paints is under pressure, down 3 percent after Q3 earnings missed street expectations with standalone revenue growth in low double digits. However, margins expanded beyond 13 percent as the softening of input costs starts reflecting in numbers. Peer company Asian Paints topped the selling list on the Nifty, down 5.5 percent.

HCL Technologies added another 5 percent to Friday’s rally as brokerages appeared bullish on the stock. CLSA raised target price to Rs 2,200 and expects to see continued earnings surprises & re-rating potential. Citi too raised the target to Rs 2,175 on their sole ‘buy ‘ call in the Indian IT services space.

Sun Pharma and Ranbaxy Labs traded at all-time highs. The US Federal Trade Commission has given a conditional nod to the USD 4 billion merger based on divestment of anti-bacterial drug. The merger now just needs approval from Punjab and Haryana High Court which will be hearing on the merger today.

Jet Airways and SpiceJet gained 3 percent after jet fuel prices cut for the seventh time since August last year. HSBC expects Jet to post a profit of Rs 430 crore in FY16.

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