The News International Team
The market continued its downtrend for the third consecutive session on Friday due to profit booking and weak global cues. The broader markets followed the same trend too.
The 30-share BSE Sensex lost 223.94 points to 28442.10. The 50-share NSE Nifty saw an intraday low of 8596.70, down 100.70 points or 1.16 percent to close at 8606.
Gautam Chhaochharia, Head of India Research, UBS cut his Nifty December 2015 target to 9200 from 9600 earlier as the reality of slow growth recovery is now being acknowledged. The top down earnings growth forecast for Nifty is just 10 percent for FY16, he said.
In global markets, Shanghai stocks ended at fresh 7-year high, up 3 percent today while rest of Asian equities ended loser. European shares also plunged as Greece downgrade by S&P weighed on sentiment. France’s CAC, Germany’s DAX and Britain’s FTSE were down 1-2 percent (at 16 hours IST).
Back home, for the week, the market snapped two-week winning streak on fears of weak March quarter earnings and cut in benchmarks’ target by brokerages. The Sensex shed 437.3 points and the Nifty lost 2 percent. BSE Auto, Pharma and IT indices were down 3.5-4.6 percent followed by Bankex with 2.4 percent loss. BSE Midcap fell 3 percent and Smallcap declined 1.9 percent.
Meanwhile, trade deficit in March has widened to USD 11.79 billion from USD 6.85 billion reported in previous month due to higher imports of oil and gold. Imports jumped 26 percent and exports grew 11 percent during the month compared to previous month.
The BSE Midcap and Smallcap indices today fell 1.5-2 percent. The market breadth was negative as 1665 shares declined against 1166 shares advanced.
TCS was the biggest contributor to Sensex’s fall, down 4.2 percent as the constant currency growth of 1.6 percent in Q4 missed street estimates. The management alluded to headwinds in the telecom, energy and insurance vertical, saying it could take all of FY16 to solve problems in Diligenta business.
Mindtree tanked nearly 7 percent as its reported dollar revenue growth was flat while organic revenue declined 1.8 percent. Citi trimmed estimates by 3-6 percent and cut target price to Rs 1,180 from Rs 1,230 per share.
Bajaj Auto slipped 1 percent as CLSA downgraded the stock from underperform to sell with a target of Rs 1,925 per share. CLSA also cut FY16-17 EPS by 3-6 percent and recommended shifting to 4-wheeler stocks from 2-wheeler stocks. The brokerage also maintained its negative stance on TVS Motor and Hero Motocorp.
IndusInd Bank plunged 6 percent. Barlcays said it was disappointing quarter for the bank as reported profit before tax growth of 24 percent would have been 30 percent lower if credit costs on NPAs sold had been recognised concurrently. CLSA said numbers were a tad disappointed by the rise in delinquencies to 3.3 percent of past year loans.
In important earnings today, Reliance Industries (which announced earnings after market hours) beat street expectations on profit and GRM front. Standalone profit came in at Rs 6,243 crore in Q4, up 22.8 percent over previous quarter and gross refining margin at USD 10.1 a barrel against USD 7.3 a barrel during the same period. Analysts had expected profit at Rs 6,000 crore and GRM at USD 9.9 a barrel for the quarter. The stock closed flat ahead of earnings.
Shares of Lupin fell 7 percent (in addition to 2.5 percent decline in previous session) after the brokerage Nomura downgraded the stock to neutral, citing slower US sales growth. Target price reduced to Rs 1,661 from Rs 1,738.
Sun Pharma was the biggest loser on Sensex, down 4.6 percent followed by Axis Bank, HDFC Bank, Bharti Airtel, Tata Motors, Maruti Suzuki, Wipro and GAIL with 1-3 percent losses.
However, metals stocks were in the limelight today. Sesa Sterlite gained 3.2 percent while Tata Steel jumped 2.5 percent on reporting best ever performance in FY15 in hot metal, crude steel, saleable steel production. Aluminium major Hindalco Industries was up 1.9 percent after LIC raised its stake in the company to 11.3 percent.
Shares of ITC, ONGC, NTPC, HUL, BHEL and Tata Power were other gainers, up 0.5-1 percent.