 "Indices fall over 0.5% ahead of Oct F&O expiry; FMCG shares fall")
Markets finished lower for the fourth straight session following the expiry of October derivative contracts with bluechips taking a beating after US Fed rekindled hopes of an interest rate hike in the month of December.
Provisionally, the Sensex closed 179 points lower at 26,860 and the Nifty slipped 55 points to close at 8,116
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(updated 2:30 PM)
Benchmark indices have extended losses with Sensex and Nifty trading lower by almost 1% weighed down by FMCG, Power, oil and bank shares.
Further, markets across the globe are trading lower after US Federal Reserve bolstered prospects for a December interest-rate increase.
Meanwhile, investors have turned cautious ahead of the October derivatives expiry today.
At 14:30 PM, the Sensex was at 26,893 down 147 points while the Nifty has lost 44 points at 8,128.
The broader markets are outperforming the benchmark indices- BSE Midcap and Smallcap indices are trading marginally lower. The market breadth is marginally weak with 1,291 declines against 1,180 advances on the BSE.
In the currency front, the rupee has depreciated by 22 paise to 65.15 against the US dollar on strong demand for the US currency from importers after the US Federal Reserve indicated it may hike interest rates in December.
MARKET VIEW
According to Motilal Oswal’s market report, “Nifty has formed a second “Doji” continuation structure after a two consecutive bearish gaps suggesting aggressiveness of sellers leading to strong possibility of a corrective move towards 8050-8100 zone. Expiry day coupled with oversold intraday set up may lead to some short term bounce towards 8250, which should be utilized for creating fresh short positions.”
Ritesh Jain, CIO, Tata Asset Management says, “The key takeaway from the FOMC statement released yesterday was that the FED has guided that December is very much on the cards but at the same time stressing that the final decision still remains data dependent. These data points are unemployment levels and inflation. The FED is targeting maximum employment and 2% CPI inflation. More importantly, in a sort of a U turn, the FED almost dropped its cautious commentary about fragility of the global economy which means that the door is wider open for December that what was previously thought.
He further adds, "In September, following concerns about the health of the Chinese economy, the committee said: “Recent global economic and financial developments may restrain economic activity somewhat and are likely to put further downward pressure on inflation in the near term.” This was modified on Wednesday to: “The committee continues to see the risks to the outlook for economic activity and the labor market as nearly balanced but is monitoring global economic and financial developments."
GLOBAL MARKETS
Asian shares fell and the dollar stood tall on Thursday, after the U.S. Federal Reserve revived market expectations that it may yet raise interest rates by year-end.
While Wall Street ended a volatile session with solid gains, apparently underpinned by the Fed's vote of confidence in the US economy, MSCI's broadest index of Asia-Pacific shares outside Japan extended losses to 1.10%.
The reaction in Asia was typical of recent tentative trading in global markets as the backdrop of slowing global growth made investors anxious over the Fed's policy direction.
SECTORS & STOCKS
BSE FMCG and Power indices have slumped over 1% followed by counters like Capital Goods and Oil & Gas, both slipping by almost 1%each. However, BSE Consumer Durables, Realty and Auto indices are up 0.2-1%.
The top losers from the Sensex pack are BHEL, GAIL, Sun Pharma, Axis Bank and Bharti Airtel, all falling down between 2-4%.
Sun Pharmaceutical Industries has initiated a recall of a little over a million boxes of Loratadine, an anti-allergic drug, from the US market after checks revealed the tablets were ‘super potent’ and ‘out of specification’. Shares of Sun Pharma are down over 2%.
Bharti Airtel and Eaton Towers have announced conclusion of the sale and purchase of the former’s tower assets in Burkina Faso. Bharti Airtel is down over 2%.
On the losing side, Dr Reddy’s Labs, Tata Motors, Lupin, NTPC and Vedanta have surged between 1-2%.
Lupin has rebounded in trades today after witnessing sharp fall in last two trading session post the announcement dissapointing Q2 numbers.
Dr Reddy’s Lab has gained over 2% ahead of Q2 numbers.
Metal shares are witnessing a mixed trend as investors awaited a possible announcement from an economic meeting in Beijing.
Foreign companies are in talks to buy a stake of up to 24% in Bina refinery in Madhya Pradesh, which is jointly owned by Bharat Petroleum Corp and Oman's state oil firm, BPCL's chairman told Reuters on Thursday. BPCL has dipped over 2%.
Q2 RESULTS IMPACT
Yes Bank traded 2.5% higher at Rs 746, bouncing back over 5% from intra-day low on the National Stock Exchange (NSE), after the bank reported a better-than-expected 26.5% year-on-year (y-o-y) growth in net profit at Rs 610 crore for the quarter ended September 30, 2015 (Q2FY16), on back of strong operational income.
Local search engine Just Dial has reported a 47.03% surge in its net profit at Rs 46.30 crore for the quarter ended September 30, on rise in income. However, shares of Just Dial are down over 10%.
NTPC has slipped marginally after the company's net profit rose 39.9% to Rs 2898.28 crore on 5.25% rise in total income to Rs 18173.90 crore in Q2 September 2015 over Q2 September 2014.
Bharat Forge has dipped 6% to Rs 815, its lowest level since November 2014 on the NSE, after the company reported a lower than expected net profit and revenues for the quarter ended September 30, 2015 (Q2FY16).
MRF today reported a 45.38% surge in its net profit at Rs 460.73 crore for the quarter ended September 30. Shares of MRF are down almost 2%.
With Reuters input
