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Sensex bleeds; midcaps banks hurt, Bharti falls 3%


The News International Team

The market saw some sharp cuts on Monday, dragged sharply by oil & gas, pharma, FMCG and banking stocks. The Sensex closed down 260.95 points or 0.9 percent at 27176.99 and the Nifty ended at 8213.80, down 91.45 points or 1 percent at 8213.80.

Poor performance by most companies in March quarter earnings has been wrecking investor sentiment. “Earnings have been disappointing so far. Investors should go through the earnings season and look for companies that show some sort of visibility,” says analyst Dipan Mehta. According to him, at a fundamental level, even as many individual stocks have corrected 25-30 percent, there should be no urgency to buy stocks.

Market expert Ambareesh Baliga also feels one will see time wise correction and one must avoid catching the falling knife.

Meanwhile, earning specific stocks kept traders busy today with Maruti outperforming the market by its stellar March quarter numbers. The stock gained 3 percent as its Q4 profit rose a whopping 60.5 percent, supported by higher volumes and favorable foreign exchange. The profit increased to Rs 1,284 crore from Rs 800 crore in the year-ago period. Strong operational performance also boosted bottomline. Revenues increased by 12.5 percent to Rs 13,625 crore in the quarter ended March 2015 from Rs 12,101.4 crore in the same quarter last year.

Vedanta, Wipro, Bajaj Auto and Tata Motors were top gainers in the Sensex.

However, investors snubbed ICICI Bank on its worsening asset quality. It’s Q4 gross non-performing assets (NPA) jumped 75 basis points year-on-year (up 38 bps sequentially) to 3.78 percent. Though the private bank matched street expectations with the profit rising 10.2 percent year-on-year to Rs 2,922 crore in the quarter ended March 2015, the stock took a knock of 2 percent. Bank Nifty lost over 1 percent dragged by SBI and HDFC as well.

Kotak Mahindra began the day with some gains on listing on the bourse but soon lost steam thereafter. It has listed new equity shares of the merged entity on exchanges. As per the scheme of merger, shareholders of ING Vysya Bank received 725 shares of Kotak Mahindra Bank for 1,000 shares of ING Vysya Bank.

Meanwhile, Bharti Airtel slipped 3 percent ahead of announcing Q4 results tommorow. Analysts expect another lacklustre quarter for Bharti’s Africa business; in fact this could be the weakest quarter historically.

Sharp depreciation of African currencies may impact the performance. Hence, dollar revenue may show a sharp decline. Citi estimates a 7.5 percent Q-o-Q decline while Kotak expects a 5 percent de-growth.

Midcaps and smallcaps also took a beating today as market fell sharply in the last few hours. BSE Midcap slipped 2 percent while BSE Smallcap fell 3 percent from previous close. Symphony, Strides Arcolab, Gujarat Gas, Vakrangee and Apollo Hospital were major laggards among the midcaps.

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