Markets end lower on May F&O expiry; Sensex sheds 58 points

The markets had a sluggish closing on the last day of May derivatives series due to selling pressure in financials and pharma shares. The weakness in most Asian markets, muted corporate earnings and growing prospects that the Federal Reserve may raise interest rates led to cautiousness on the Street.

The tepid close, however, masked the intra-day volatility that resulted from F&O rollover pressures. The Sensex oscillated in a range of around 300 points before ending at 27,506, lower by 58 points or 0.2% and Nifty settled at 8,319, down 16 points.

The broader markets also ended in the red, with BSE Midcap and Smallcap indices shedding 0.5% and 0.1% at 10,560 and 11,145 respectively.

The market breadth was weak. Out of 2,776 stocks traded on the BSE, there were 1,258 advancing stocks as against 1,404 declines.

In economy-related news, India's economic growth rate in the January-March quarter is likely to slip to 7.2% from 7.5% in the previous three months, mainly on account of lower production and weak global demand, credit rating agency Moody's said today. It also raised questions on the new GDP data series by the Central Statistical Organisation (CSO), which takes 2011-12 as the base year, saying that new data "is dubious" as they do not align well with other indicators of economy.

In other related news, the government is scheduled to announce the data on India's gross domestic product (GDP) growth for Q4 March 2015 on Friday.

On the monsoons front, Skymet said that conditions are favorable for the onset of Southwest Monsoon in India. The private weather forecaster expects monsoons to hit Kerala around 30 May.

RUPEE

The rupee staged a smart recovery, by 15 paise to 63.86, against the US dollar Thursday at the Interbank Foreign Exchange on fresh selling of the dollar by exporters. The rupee had weakened in the past three trading sessions.

GLOBAL MARKETS

China stocks dived by 7% at 4620 on Thursday, posting their biggest fall in four months, after several major brokerages tightened requirements on margin financing, triggering fears of further measures by regulators to reduce leverage in the red-hot market. Media reports also suggested that China's sovereign wealth fund has reduced its stake in China's banks. Hang Seng has slumped by 2%, while SET, Jakarta and Straits Times indices are also trading in the red, albeit marginally.

The European indices, including the FTSE and CAC edged lower by about 0.5% in early trades as a reported deal between Greece and its creditors failed to materialize.

BUZZING SECTORS AND STOCKS

Financials and pharma shares dragged the markets lower; select IT and auto stocks provided support at lower levels.

In the pharma space, Cipla tanked 2.5% at Rs 643, while Dr Reddy's and Sun Pharma shed between 1% and 2% each.

In the financials space, HDFC and HDFC Bank lost about 1% each. And State Bank of India declined about 1% on turning ex-dividend.

And in the metal space, Hindalco and Tata Steel shed 1-2% each.

On the other hand, select auto stocks saw buying interest. Tata Motors rebounded from yesterday’s lows to add 2.5% at Rs 483 and thereby emerge as the leading gainer on the BSE. The stock had witnessed a steep decline in the previous session after the company had reported lower-than-expected consolidated net profit at Rs 1,717 crore for the fourth quarter ended March 31, 2015 (Q4). And Hero Motocorp gained nearly 2%. IT names were also in the limelight, with Infosys strengthening by more than 2%; TCS and Wipro also ended in the green.

RESULTS IMPACT

Godrej Industries rallied 3.9% to Rs 377 after the company reported a 22% year-on-year (YoY) jump in its consolidated net profit at Rs 139 crore for the fourth quarter ended March 31, 2015 (Q4). The company had posted a net profit of Rs 114 crore in the same quarter of the last fiscal.

Hindalco Industries dipped 1.5% at Rs 132 after posting a decline in quarterly profit that missed estimates, hurt by lower margins. The net income for the quarter ended March 31, Hindalco's fiscal fourth, was Rs 160 crore ($25.1 million) compared with Rs 248 crore a year earlier.

BPCL shrugged off weak Q4 results to rise 2.5% to Rs 817. The company reported a 29.87% decline in net profit to Rs 2852.89 crore on 30.94% decline in total income to Rs 51928.12 crore in Q4 March 2015 over Q4 March 2014.

AstraZeneca Pharma India soared 13% to Rs 975 after the company reported a standalone net profit of Rs 38.13 crore in the fourth quarter ended March 31, 2015 (Q4) against a loss of Rs 2.57 crore in the year-ago quarter.

Bank of India plunged 6.2% to Rs 191, also its 52-week lows on the NSE, after the bank reported a standalone net loss of Rs 56 crore in the fourth quarter ended March 31, 2015 (Q4), due to lower interest income and higher employee costs.