 "Markets snap 4-day winning streak")
After posting gains for four straight sessions, markets closed lower today as participants book profits at higher attractive valuations amid a weak trend in the global peers. Meanwhile, the revision in the GDP growth target for FY16 down to 7-7.5% from its earlier projections of 8-8.1% estimated in February on account of rising retail inflation and poor monsoons hurt the domestic sentiments.
Provisionally, the S&P BSE Sensex lost 289 points to end at 25,515 and the Nifty50 shed 82 points to close at 7,762.
_____________________(updated at 2:30 PM)
After posting gains for four straight sessions, markets are trading lower today as participants book profits at higher attractive valuations amid a weak trend in the global peers. Meanwhile, the revision in the GDP growth target for FY16 down to 7-7.5% from its earlier projections of 8-8.1% estimated in February on account of rising retail inflation and poor monsoons hurt the domestic sentiments.
At 2:25 pm, the S&P BSE Sensex was down 156 points at 25,647 and the Nifty50 was down 47 points at 7,798.
MACROECONOMIC DATA
The government at its mid-year economic review forecasted consumer price inflation of 6% for FY16 adding that the economy had made progress but challenges remained.
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It also promised to hold fiscal deficit at 3.9% of total GDP, while projecting a revenue deficit of 2.8% for FY16. It cautioned that it would reassess commitment to cut fiscal deficit by 0.4% by FY2017
It also warned that the proposed wage hike for central government employees by the Seventh Pay Commission could adversely impact the fiscal deficit.
NOTABLE STOCKS
Shares of IT companies continue to trade weak after the US Congress doubled a special fee on the popular H-1B and L-1 visas raising it up to $4,500 to fund a 9/11 healthcare act and biometric tracking system that will hit Indian IT companies. The Indian IT companies will take a hit of $400 million annually with the hike in H-1B and L-1 visas. Infosys, TCS, Tech Mahindra have lost between 1%-2%.
Another sector which has been hit in today’s tarde is the banks. Bank stocks have lost sheen after the RBI released the final guidelines on computing interest rates on advances of commercial banks based on the marginal cost of funds. Among state-run banks, United Bank of India, IDBI Bank, Bank of Baroda, Allahabad Bank, Dena Bank, Indian Bank, Vijaya Bank, Andhra Bank, Punjab National Bank, Bank of Maharashtra, SBI, UCO Bank and Bank of India lost between 0.5%-1%.
Among private sector banks, HDFC Bank, Kotak Mahindra Bank, IndusInd Bank, City Union Bank, Federal Bank and ICICI Bank have shed between 0.4%-1%.
Meanwhile, HDFC lost 0.7% % after the company announced that it has agreed to sell 12.33 crore shares representing 22.902% stake held in HDFC ERGO General Insurance Company (HDFC ERGO), a subsidiary of the company, to ERGO International AG, Düsseldorf at a price of Rs 90.973 per share aggregating Rs 1122 crore.
Shares of oil exploration and production (E&P) companies also fell as global crude oil prices declined. Reliance Industries, Cairn India and ONGC dropped between 0.5%-1.5% as lower crude oil prices would result in lower realization from crude sales for oil exploration firms.
Among individual names, Bajaj Auto is the top loser down 2% tracking Argentina’s peso that plummeted 26.5 per cent after the country lifted currency controls. Bajaj Auto gets nearly 20 per cent of its revenue from exports to Latin America and Argentina is a key market for the auto company in terms of exports.
Vedanta declined nearly 2% after the company said that its arm Sesa Goa may suspend iron ore mining in Goa due to the ongoing dispute between the firm and truck operators.
On the gaining side, Maruti Suzuki is treading flat with a positive bias after the car maker announced the receipt of approval from its minority shareholders to allow its Japanese parent Suzuki invest and own an upcoming plant in Gujarat, where a total investment of Rs 18,500 crore has been envisaged in the long term.
Among its peers, M&M) gained 0.5% after the company unveiled its much awaited compact sports utility vehicle (SUV) Mahindra KUV100.
Other prominent gainers include NTPC, HUL and Cipla trading higher between 0.3%-1.5%.