It was a consolidation day on Dalal Street ahead of Q1 GDP data and after a rally in previous two consecutive sessions. Equity benchmarks shed 0.4 percent, dragged by profit booking in capital goods, select banking & financials, oil and technology stocks while pharma stocks bucked the trend.
The 30-share BSE Sensex fell 109.29 points to 26283.09 and the 50-share NSE Nifty slipped 30.65 points to 7971.30. The broader markets, too, lost ground; the BSE Midcap and Smallcap indices declined 0.2 percent each. The market breadth was weak as about 1479 shares declined against 1162 shares advanced on the Bombay Stock Exchange.
Recent market turmoil and delay in earnings & economy recovery led brokerages to slash target price. Ambit Capital reduced its FY16 Sensex target from 32000 to 28000 on expected sharp correction in real estate prices and slowdown in reform momentum while Barclays chopped its Nifty target by roughly 6 percent to 9642 on weak demand recovery.
Meanwhile, the government officials met rating agency Standard & Poor’s and made the case for a ratings upgrade. The rating agency expressed concern on falling exports and rupee. However, the government said growth will hit 8 percent in FY16 based on strong fundamentals and asserted that reform momentum will persist despite the parliamentary logjam.
In August, the Sensex and Nifty crashed more than 6 percent on Chinese concerns.
On the global front, Asian markets ended mixed with the Shanghai falling 0.8 percent on reports that the Chinese government limiting its intervention in the stock market. Nikkei lost 1.3 percent while Hang Seng gained 0.3 percent. European markets, too, were mixed; France’s CAC and Germany’s DAX declined half a percent (at 16 hours IST). Brent and NYMEX crude oil prices fell 2 percent each after last week’s spectacular rebound.
Back home, the gross domestic product data for Q1FY16 will be announced today evening.
The rupee plunged 34 paise to close at 66.48 a dollar against Friday’s value of 66.14 a dollar due to sustained month-end demand for the American currency overseas.
Auto stocks closed lower ahead of August sales data. Nomura expects medium & heavy commercial vehicle and passenger vehicles space may continue to report strong numbers while two-wheeler data may remain weak. Maruti Suzuki, Mahindra & Mahindra and Bajaj Auto declined 0.6-1 percent while Tata Motors and Hero Motocorp were flat.
Pharma stocks were in the limelight with the CNX Pharma index up more than 2 percent. Lupin, Dr Reddy’s Labs and Cipla surged over 3 percent while Sun Pharma gained 1.4 percent.
Among others, ICICI Bank, Infosys, Reliance Industries, Bharti Airtel, ONGC, Tata Steel and Hindalco Industries slipped 1-2 percent while Wipro, Coal India, GAIL and Vedanta gained 1.5-2.5 percent.
In the broader space, Dishman Pharmaceuticals spiked 6 percent after reporting 58.4 percent year-on-year growth in Q1 net profit and 38.4 percent rise in operating profit. Punj Lloyd gained 6 percent on order worth Rs 1,094 crore from IOC. Strides Arcolab climbed 3 percent after completion of acquisition of Aspen’s generic pharma business in Australia.