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Markets ended the session on a mixed note, amid choppy trades, as investors turned cautious ahead of May F&O expiry due on Thursday.
Disappointing earnings from Tata Motors and Tech Mahindra were a major drag on the markets. However, buying demand among financials and oil shares limited the losses to a great extent.
Meanwhile, the sentiment was dampened further by concerns surrounding US interest rate hike after the US reported better-than-expected economic data.
The Sensex ended the session at 27,564.66, higher by 33.25 points or 0.12%, while the Nifty settled below the crucial technical level of 8,350 at 8,335, down 5 points or 0.06%.
The broader markets had a listless closing, with the midcap and smallcap indices ending marginally lower at 10,616.47 and 11,162.41 respectively. The market breadth was negative. Out of 2,740 stocks traded on the BSE, there were 1,191 advancing stocks as against 1,439 declines.
On the macro-economic front, gross domestic product (GDP) data, which is due on May 29 and Reserve Bank of India’s (RBI’s) bi-monthly policy preview, which is due on June 2, also led to caution among the traders.
EXPERT VIEW
According to Ranak Merchant, Technical Analyst - Strategies from Sushil Financial Services, "The week, as expected, was volatile as we head into NSE Derivatives expiry tomorrow followed by the RBI policy on June 02. Last week's hopes of a pullback were shattered as Nifty faced stern resistance near the psychological barrier of 8,500, world market weakness to be blamed along with a series of disappointing results."
She adds, "Today's trade saw Nifty slip below an important support of 8,341 and towards the next crucial support zone of 8,242-8,270. Pullbacks failed to re-conquer 8,341 and selling pressure resurfaced. For the next two sessions and the coming week Nifty is expected to be confined to this range lest a breakout or breakdown occurs beyond the said levels. A move above 8,341 is keenly eyed for a pullback towards 8,449 for starters and then beyond".
SECTORS & BUZZING STOCK
BSE IT and Auto indices ended lower by 2% each. However, buying was visible among banks, Capital Goods, Consumer Durables and Oil & Gas segment.
Tata Motors was the top Sensex loser, down around 5% after the company reported lower-than-expected consolidated net profit at Rs 1,717 crore for the fourth quarter ended March 31, 2015 (Q4) on account of lower-than-expected operating performance at Jaguar Land Rover (JLR) and mark-to-market (MTM) loss provisioning at JLR (on commodity hedges and revaluation of foreign currency debt). Meanwhile, Tata Motors is set to get its annual dividend of 150 million pounds (Rs 1,500cr) from Jaguar Land Rover.
Shares of Tech Mahindra tanked almost 14%, the sharpest intra-day fall since February 2011 on the NSE, after the company reported a nearly 500 basis points (bps) decline in EBITDA margins at 15.2% for the fourth quarter ended March 31, 2015 (Q4) against 20.2% in the December 2014 quarter.
In the IT space, Infosys and Wipro slipped 1-2% each. According to Dun & Bradstreet, Infosys and Wipro are among 35 companies in Karnataka making it to India's Top 500 Companies.
GAIL declined around 2% after the company reported a lower-than-expected net profit at Rs 511 crore for the quarter ended March 31, 2015 (Q4) due to poor performance from the petrochemicals business..
Vedanta has bought upto 5.33% stake in subsidiary Cairn India at an average market price of Rs 220.40 per share, the oil company said in an exchange filing today. The shares of Vedanta declined over 1.5%.
On the gainer's side, financial shares witnessed buying demand on hopes of a rate cut by the RBI. According to the results of a Reuters poll, the Reserve Bank of India is likely to cut its benchmark interest rate by 25 basis points to 7.25% when it meets early next week and make a similar move before December. Axis Bank, SBI, HDFC Bank, HDFC and ICICI Bank surged 1-2% each.
Bharat Heavy Electricals (BHEL), the country’s largest power equipment manufacturer, has posted a 52% drop in net profit during the fourth quarter ended March on slowdown in project execution. However, the stock was the top Sensex gainer, up around 2%.
Bharti Airtel rose by nearly 2%. Tanzania's government has agreed to buy back a 35% stake in the state-run telecom company from the local subsidiary of Bharti Airtel for 14.6 billion shillings ($7.07 million), a senior official said.
Other notable gainers included ONGC, Coal India, NTPC, ITC and L&T.
