Key benchmark indices declined on profit booking after rallying in the past few trading sessions. The barometer index, the S&P BSE Sensex, fell 96.74 points or 0.36% to 26,781.50, as per the provisional closing data. The Nifty 50 index fell 30 points or 0.36% to 8,243.80, as per the provisional closing data. Weakness in European stocks spoiled investors' sentiment.
The Sensex and the Nifty, both, reversed direction soon after hitting their highest intraday level in almost two months in mid-morning trade. The Sensex fell 144.91 points, or 0.54% at the day's low of 26,733.33 in late trade. The index rose 131.37 points, or 0.49% at the day's high of 27,009.61 in mid-morning trade, its highest level since 11 November 2016. The Nifty fell 40.55 points, or 0.49% at the day's low of 8,233.25 in late trade. The index rose 33.05 points, or 0.40% at the day's high of 8,306.85 in mid-morning trade, its highest level since 11 November 2016.
Among secondary barometers, the BSE Mid-Cap index provisionally fell 0.18%. The decline in this index was lower than the Sensex's decline in percentage terms. The BSE Small-Cap index provisionally fell 0.39%. The decline in this index was higher than the Sensex's decline in percentage terms.
The market breadth, indicating the overall health of the market, was negative. On BSE, 1,509 shares fell and 1,217 shares rose. A total of 167 shares were unchanged.
The total turnover on BSE amounted to Rs 3323.60 crore, higher than turnover of Rs 3151.34 crore registered during the previous trading session.
IT stocks tumbled on reports two US Congressmen have reintroduced a bill to curb the use of H-1B visas, on which the Indian IT sector is particularly dependent. MindTree (down 4.31%), Tech Mahindra (down 3.8%), Hexaware Technologies (down 3.78%), HCL Technologies (down 3.71%), Infosys (down 2.65%), Oracle Financial Services Software (down 2.57%), Wipro (down 2.18%), TCS (down 2.17%) and Persistent Systems (down 1.8%), edged lower.
According to reports, the new bill would require workers on the H-1B visa pay a minimum of $100,000, up from $60,000 currently. The bill also removes the Master's degree exemption to the cap on the number of visas available, as per reports. The bill comes after companies such as Disney and Southern California Edison have come under fire for outsourcing their IT operations to Indian companies.US is the biggest outsourcing market for Indian IT firms.
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Most telecom shares declined. Reliance Communications (down 2.31%), MTNL (down 2%) and Bharti Airtel (down 0.37%), edged lower.
Idea Cellular lost 2.48% to Rs 72.85 on reports a foreign brokerage has downgraded the stock to underperform. The brokerage sees significant decline in operating profit of Idea Cellular going forward. Unlimited voice uptake makes risk-reward unfavourable, it added.
Bharti Infratel rose 1.29% to Rs 354.25 on reports a foreign brokerage has upgraded its recommendation on the stock to buy. The brokerage expects stronger tenancy growth for Bharti Infratel. Bharti Airtel's stake sale in the company could be a catalyst, it added. The brokerage has raised its earnings estimates for Bharti Infratel by 2-3% for FY 2018-19.
Natco Pharma jumped 4.49% to Rs 624.10 after the company said it received the final approval of abbreviated new drug application (ANDA) containing a paragraph IV certification filed with the US Food and Drug Administration (FDA) for generic version of Bendamustine Hydrochloride powder for Injection, 25 mg/vial and 100 mg/vial (singe-dose vial). The announcement was made during market hours today, 6 January 2017.
Pursuant to the settlement of the Paragraph IV litigation, Natco plans to launch this drug on 1 November 2019, or earlier under certain circumstances, through its marketing partner Breckenridge Pharmaceutical, Inc., in the US market. Natco and Breckenridge filed their ANDA with a Paragraph IV certification on the first-to-file date and expect to share 180-day exclusivity with other ANDA first filers.
Cephalon (acquired by Teva in 2011) sells Bendamustine Hydrochloride powder for Injection, 25 mg/vial and 100 mg/vial (singe-dose vial) under Brand name TREANDA in the US market. TREANDA is indicated for the treatment of patients with chronic lymphocytic leukemia (CLL) and non-Hodgkin's lymphoma. TREANDA had US sales of approximately $133 million for twelve months ended November 2016, according to IMS Health.
Overseas, the main European bourses edged lower today, 6 January 2017. Most Asian stocks edged higher today, 6 January 2017. China's Shanghai Composite fell 0.35%. Japan's Nikkei 225 fell 0.34%. In US, the tech-heavy Nasdaq closed at a record yesterday, 5 January 2017, as the broader stock market finished lower, dragged down by a steep slide in the financial sector and major retailers. Mixed data on jobs also raised concerns a day before the closely watched December employment report due today, 6 January 2017.
In US, the private sector added 153,000 jobs in December, according to ADP, a rate that was below forecasts, while first-time jobless claims fell 28,000 in the latest week, dropping to a nearly 43-year low. Separately, a reading on the US services sector held steady at a 12-month high in December, suggesting growth in non-manufacturing activity, mainly the service sector, remains strong.
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