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Sensex drops 491 points ahead of Delhi poll outcome; L&T dips 6%

Benchmark indices finished lower for the seventh straight session as investors remain wary ahead of the Delhi assembly election result due tomorrow. Sustained selling by funds and retail investors, discouraging third quarter earnings by some bluechip companies including GAIL, L&T and Tata Steel coupled with weakness in the rupee dampened market sentiment.

Exit polls conducted on Saturday predicted that Arvind Kejriwal is most likely to be Delhi’s Chief Minister with his party getting a majority in the Delhi assembly.

The 30-share Sensex dropped 491 points to close at 28,227 and the 50-share Nifty lost 135 points to end at 8,526.

In the broader market, both the BSE Midcap and Smallcap indices ended lower in line with the large counter parts and dropped 1.4% and 1.5% respectively.

The government will issue the gross domestic product (GDP) data for the financial year’s third quarter (Q3, October-December) today.

Meanwhile, foreign portfolio investors continued to remain sellers in Indian equities with net sale of Rs 96.45 crore on Friday, as per provisional data.

The Indian rupee weakened to over three week low against the dollar, down 38 paise to Rs 62.07 on sustained bouts of demand for the greenback from banks and importers amid bullish US currency overseas.

Key Stocks:

All the 12 sectoral indices of BSE ended in red. BSE Capital Goods index led the decline and ended down over 4% followed by Metal, Realty, Auto and Bankex indices which lost up to 3%.

ONGC gained 1.6% after media reports suggested that the disinvestment of 5 per cent stake in ONGC is unlikely during this fiscal as the liquidity situation in the market is under stress after recent mega share sales.

Technology stocks ended firm in an otherwise subdued market on the back of a depreciating rupee. Infosys gained 1%. Infosys Finacle has been positioned as a Leader in IDC MarketScape of Worldwide Core Banking Solution Providers. Following the tandem, Wipro gained over 1%.

In the healthcare space, Sun Pharma gained over 1.3% and Dr Reddys Lab emerged as the top gainer up nearly 2% .

Metal stocks reeled under pressure in today’s session amid weak China data. Sesa Sterlite shed over 4.4%. Tata Steel lost 6% after the company posted a drop of 68% in its consolidated net profit at Rs 157 crore for the quarter ended December, 2014.

State-run monopoly Coal is likely to scrap its maiden overseas coal production project as the deposits in the acquired blocks are not good enough. The stock lost nearly 0.7%. 

Financials declined across the exchange. Housing finance major, HDFC lost around 1%, HDFC Bank was down 1.4%, ICICI Bank slumped 3%, SBI plunged 4% and Axis Bank lost 1.3% . Reports suggest that Axis Bank will seek shareholders’ approval for raising up to Rs 15,000 crore by issuing long-term bonds or non-convertible debentures to select investors in the domestic market. 

GAIL lost 4.5% after the company posted a massive 64 % drop in its December quarter net profit as it was unable to sell imported gas contracted at higher price.

Engineering major Larsen & Toubro (L&T) reported a 14% decline in standalone net profit at Rs 1,060 crores for the quarter ended Decmber 2014. It was Rs 1,240 crores for the same period a year ago. The stock emerged as the top loser and was down over 6%.

Cipla, BHEL, Hindalco, Coal India, M&M and SBI are due to release their quarterly results later during the week and ended lower between 0.7-4% on caution.

Market breadth ended weak on the BSE with 1,909 declines against 931 advances.

Global Markets:

European stocks dipped and low-rated bond yields rose on Monday after dismal Chinese trade data and signs of increasingly fraught relations between Greece and its international creditors kept investors cautious.

The pan-European FTSE 300 index fell 1.2%, with Germany’s DAX down 1.7%, France’s CAC down 1.3% and UK’s FTSE down 0.9%.

Asian shares wobbled on Monday after dismal Chinese trade data eclipsed a strong US jobs report, raising concern about a deepening slowdown in the world’s second-largest economy and sending the Australian dollar sliding.

MSCI’s broadest index of Asia-Pacific shares outside Japan slipped 0.8% while US stock futures also shed 0.4%. Japan’s Nikkei share average bucked the trend and rose 0.2% on the back of a weaker yen.


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