The market reversed morning losses to close higher Wednesday, aided by healthcare and technology stocks. However, equity benchmarks failed to hold psychological levels – 28000 on the Sensex and 8500 on the Nifty due to profit booking in PSU banks after one way rally. After hitting a fresh two-year low in early trade, the rupee recovered smartly in later part of the session.
The 30-share BSE Sensex rose 100.10 points to 27931.64 and the 50-share NSE Nifty gained 28.60 points at 8495.15, outperforming global peers.
Experts believe the market has been in tight range and that may continue in near term, at least till the clarity over GST & Land bills. According to them, Chinese volatility is a near term concerns and not a long term.
Globally, volatility hit Chinese markets as the country’s central bank injected more liquidity to avoid capital outflows. Shanghai Composite reversed a 5 percent drop to finally close higher by 1 percent. Other markets in the region ended in the red. European markets tracked losses ahead of the German parliament’s vote on the Greek bailout. Britain’s FTSE, France’s CAC and Germany’s DAX fell 1 percent each.
Back home, the rupee tumbled to a 2-year low in morning trade but recovered smartly in the second half. It gained 12 paise at 65.19 a dollar as exports and banks stepped in to sell dollars. The recovery was seen despite the Greenback’s strength against several Asian currencies today.
Sun Pharma was the biggest gainer on the Sensex, up 4.3 percent after the Bank of America Merrill Lynch upgraded stock to buy from neutral with a target price of Rs 1,070, implying 20 percent upside. It also raised FY17/18 earnings per share forecast by 10 percent each driven by potential synergy benefits of USD 400 million from Ranbaxy integration in FY18; recent price hikes in Taro and sequential improvement in ex-Taro US business including supply from Halol.
Cipla gained 1.8 percent. HSBC added the stock to its Global Emerging Market (GEM) Super 15 portfolio. It has a buy rating on the stock with a target price of Rs 795. “Earnings will be driven in the near term by new product launches in emerging markets and certain product approvals in UK & US,” it said, adding respiratory franchise will double in next 4-5 years.
Shares of Glenmark Pharma also saw buying interest, up 3.5 percent on getting approval from USFDA for oral contraceptive drug, Drospirenone & Ethinyl Estradiol tablets.
Infosys hit a record high of Rs 1186 intraday, up 1 percent at close on getting order from the Fidelity Bank Of Nigeria. Additionally, chairman R Seshasayee said the company’s cash should be utilised for acquisitions and dividends. He believes Vishal Sikka’s 5-year growth target is achievable.
UltraTech Cement and Ambuja Cements gained 1-2 percent as brokerage CLSA has retained its overweight rating on these stocks, saying these are top picks in the sector. It believes that the worst is behind for the industry, which is on course for a gradual recovery after seven years of contraction in the utilisation rate.
Among others, Wipro, Lupin, Dr Reddy’s Labs and Bajaj Auto gained 1-2 percent while SBI, Coal India, Hindalco Industries and Axis Bank were down 1-3 percent.
Jaypee Infratech gained 5.3 percent after the environment minister Prakash Javadekar confirmed the limitation of the eco-sensitive zone around Okhla Bird Sanctuary. According to JP Morgan, the company has a large 1150 acre project where deliveries can finally commence.
Javadekar told CNBC-TV18 that the government is looking to standardise real estate approvals across the country, adding that the structure of the National Green Tribunal may be changed to make it more efficient.
Insurance software services provider Majesco closed at Rs 325.50, down 25.69 percent compared to Rs 438.05 on day one. Its parent company Mastek lost 5.4 percent.
Amtek Auto was the stock of the day. It crashed 30.77 percent amid high volumes. Gautam Malhotra, managing director of the company said the selling pressure in the stock could be on the back of F&O exclusion. However, he refuted that the company is facing any problems (payment) with lenders, terming them as ‘rumours’. Its June quarter earnings, which were announced on August 14, were howler as it reported a loss of Rs 157.6 crore (for the first time ever) against profit of Rs 86.1 crore year-on-year on higher interest cost.