Markets end flat ahead of RBI monetary policy; Nifty holds 8,400

Weakness in healthcare shares weighed on indices with Sun Pharma contributing the most to the decline on dismal results

Markets finished flat as caution prevailed on the bourses ahead of the RBI monetary policy review due tomorrow dragged by financials. Weakness in healthcare shares also weighed on market with Sun Pharma contributing the most to the decline on weak earnings post the acquisition of Ranbaxy.

The Sensex gained 21 points to end at 27,849 and the Nifty closed flat at 8,433 levels. 

Meanwhile, the Q4 GDP data released on Friday ensured that India became the world’s fastest growing economy, outpacing China, with a growth of 7.5% in the March quarter and the HSBC report stated that India’s manufacturing PMI increased to a four-month high of 52.6 in May from 51.3 in April, with a reading above 50 signaling expansion.

Further, monsoon is likely to arrive on southern Kerala coast in the next five days as the rains have missed their normal start date of June 1, reported IMD.

MARKET VIEW

According to Mudit Goyal, Technical Analyst, SMC Global Securities, "It appears from daily chart that stock is forming the “Cup and handle” pattern and likely to give the breakout of same. From current level, 8,490 can act as a good resistance for coming days. Any breakout of same can add further buying upto 8,620 levels. On the lower side, 8,270 is seen as good support for near term, breakdown can open the door for further downside by 8,070 levels".

RUPEE

At 3.40 PM, the rupee was trading at 63.69 against the US dollar on persistent selling of dollars by banks and exporters in view of fresh foreign capital inflows into the equity market.

BUZZING STOCKS

On the sectoral front, BSE Capital Goods, Realty and FMCG indices soared up to 2% however, BSE Healthcare and Bankex lost sheen and were down up to 1%.

Capital goods majors, L&T and BHEL gained 3% and 1% each on the achieving fresh orders. L&T won orders worth Rs 1,099 crore in May 2015 while BHEL bagged Rs 369-crore order for supply and installation of a power cycle piping (PCP) package for Barh project of NTPC. Meanwhile, NTPC closed 1.6% higher.

Shares of Reliance Industries soared 3% after the company overtook Oil and Natural Gas Corp (ONGC) to become the nation's most profitable company, reporting a consolidated net profit of Rs 23,566 crore in the 2014-15 fiscal. On the other hand, ONGC lost 2%.

Maruti Suzuki surged 2% on reporting a growth of 13% in domestic sales for the month of May 2015, outperforming most of its rivals.

Cipla climbed 2% after the total income reported by the company increased from Rs 10,439 crore to Rs 11,511 crore on year-on-year basis and the domestic sales in March 2015 appreciated from Rs 900 crore in the year ago period.

Shares Sun Pharma plunged 9% after the company reported lower than expected earnings. The company reported a 44% decline in its final quarter net profit, on the back of the Ranbaxy acquisition.

Sales of Jaguar Land Rover, owned by Tata Motors dropped by a fifth year-on-year in China for the first three months of the year. Reacting to the news, shares of Tata Motors slipped 2%.

Banking shares lost sheen today ahead of the RBI policy review due tomorrow.  HDFC Bank, Axis Bank and ICICI Bank lost between 0.3-1.5%.

In the broader market, BSE Midcap and Smallcap indices ended flat in tandem with the larger peers. The market breadth ended weak on the BSE with 1,525 shares declining versus 1,211 shares advancing.

On the global front, European shares gained, shrugging off the concern surrounding the Greek debt crisis after China's benchmark index  Shanghai Composite soared nearly 5% on hopes of new stimulus measures.