Sensex below 29,300; financials crack

Benchmark indices continued to trade lower on Friday as investors booked profits at higher levels. Also, lower than expected corporate earnings posted by blue chip companies such as Dr Reddy’s Lab and HDFC Bank are weighing on the bourses.  

At 1 PM, the 30-share Sensex is down over 403 points at 29,278 and the 50-share Nifty is down 112 points at 8,840. In early trades, the Sensex hit an all-time high of 29,844.16 and Nifty touched the life-time high of 8,996.60.

However, BSE Midcap and Smallcap indices are down over 0.2%. Market breadth on the BSE is weak with 1,133 advances against 1,465 declines.

Meanwhile, foreign institutional investors were net buyers in Indian equities worth Rs 1,723.77 crore on Thursday, as per provisional stock exchange data.

Local Currency:

The partially convertible rupee is stronger at 61.75 versus Thursday's close of 61.86/87 per dollar, as most of the Asian currencies rise against dollar. Month-end dollar demand from importers to keep the rise limited, traders

Global Markets:

On the global front, Asian shares edged up on Friday, talking heart from a late earnings-led surge on Wall Street even as continuing concerns about global growth tempered gains.

MSCI's broadest index of Asia-Pacific shares outside Japan was up about 0.1% on the day, but up more than 1% for the month.

Overnight, US stocks enjoyed a late afternoon rally and closed higher on Thursday as an upturn in oil prices and a rally in Apple Inc. and Boeing Co. shares helped offset some disappointing earnings and lingering questions over U.S. monetary policy, Reuters reported. The Dow Jones industrial average up 1.31%, the S&P 500 up 1% and the Nasdaq Composite up 1%.

Japan's Nikkei stock average added about 0.8%, clawing back some of the 1.1% lost the previous session, its biggest one-day drop in two weeks.

Key Stocks:
 

On the sectoral front, BSE Bankex is the top loser down over 2% followed by BSE Consumer Durables, FMCG and Metal indices trading lower up to 1%. However, BSE Realty is the top gainer up 2.4%.

Coal India is down nearly 4% after the government’s offer for sale (OFS) opened for subscription on Friday. The floor price — the base price at which it intends to sell its 10 per cent stake in Coal India — has been set at Rs 358 a share, translating into a 4.5% discount to Thursday’s closing price.

Dr Reddys Lab has declined over 4% after reporting a 7.1% decline in consolidated net profit to Rs 574.5 crore for the quarter ended December on the back of higher operational costs and subdued revenue growth particularly in the most profitable US market.

Bharti Airtel has declined around 1%. Airtel M Commerce Services Ltd (AMSL), a wholly owned subsidiary of the country’s largest telecom service provider Bharti Airtel, said on Thursday that it would apply to the Reserve Bank of India (RBI) for a licence and Kotak Mahindra Bank will acquire 19.90 per cent stake in it. Currently, AMSL offers mobile money services under the brand name Airtel Money.

HDFC has slipped by over 2.5%. India's top mortgage lender, Housing Development Finance Corporation (HDFC), posted a 12 per cent rise in net profit for the third quarter of FY15 at Rs 1,425 crore on the back of higher loan growth. As on December 31, 2014, the loan book stood at Rs 2.2 lakh-crore, against Rs 1.9 lakh-crore a year ago, a growth of 14 per cent.

Shares of ICICI Bank are trading lower up to 2% ahead of Q3 results due to be released later during the day.

Shares of public sector undertakings (PSU) in the banking sector are under pressure with the National Stock Exchange (NSE) CNX PSU Bank index declining 6% after the Bank of Baroda reported a weak set of numbers for the third quarter ended December 31, 2014 (Q3). SBI is down over 4%.

On the gaining side, NTPC, BHEL, Tata Power, Hero Moto and Maruti Suzuki have risen between 1-3%.

NTPC is the top Sensex gainer, up over 2%. The company has restricted the building of three new solar power projects to domestic manufacturers, even as India pushes for overseas companies to lead fresh investments into a renewable energy drive. Also, the company is due to release its Q3 results later during the day.

BHEL has gained around 2%. The company has announced commissioning of 600 MW thermal power project in Odisha.

GAIL said its LPG recovery plant at Lakwa, Assam would be converted to supply feedstock for the petrochemical unit of Brahmaputra Cracker and Polymer (BCPL) being set up at Lepetkata near Dibrugarh. The stock is up 0.2%.

While there were little concrete announcements, specifics including civil nuclear liability and insurance pool in the defence and nuclear industries, and extension of defence manufacturing collaborations are likely to boost plans for companies such as Larsen & Toubro (L&T) and Tata Power among others. Tata Power is up 1.4%.

Shares of real estate companies are in demand and trading higher by up to 10% on the bourses in otherwise subdued market.

Housing Development and Infrastructure Limited (HDIL), DB Realty, Indiabulls Real Estate, Kolte-Patil Developers, Unitech, DLF, Anant Raj, Parsvnath Developers and Mahindra Lifespace Developers have rallied between 4-10% on BSE.

Hindustan Construction Company (HCC) has rallied 14% to Rs 33.15 on BSE after reporting a five-fold jump in standalone net profit at Rs 27.1 crore for the quarter ended December 31, 2014 (Q3), on the back of a higher turnover.