 "Battered markets eye Budget boost")
Benchmark indices ended lower for fifth straight trading sessions dragged down by selling pressure in pharma shares while weak global cues also dampened investor sentiment.
Further, consistent selling by foreign portfolio investors along with growing uncertainty over Hillary Clinton's victory in the US Presidential election also weighed on market sentiment.
The S&P BSE Sensex ended down 156 points to settle at 27,274 and the Nifty50 settled 51 points lower at 8,434. Sensex touched its lowest level since July 8, 2016 in intra-day trade whereas the Nifty dropped to its lowest level since July 11, 2016.
The broader markets underperformed the benchmark indices significantly- BSE Midcap and Smallcap indices fell between 1%-2.5%. Market breadth on the BSE ended lower with 200 declines and 500 advances.
Meanwhile, the Goods and Services Tax (GST) Council on Thursday decided upon a four-slab tax structure of 5%, 12%, 18% and 28%, with lower rates for essential items and the highest for luxury and de-merits goods, many of which would also attract an additional cess.
“Stock market has responded positively to every policy initiative of the government in the past and this time looks no different too. Quick finalization of the rate will open up the possibility for implementation of GST law as early as 1st April 2017. Although the imposition of cess is a bit of disappointment but hopefully the same will be removed after a year of implementation,” says Jimeet Modi, CEO, SAMCO Securities.
Shares of L&T ended lower by 3% on the National Stock Exchange (NSE) after huge block deals were executed in the counter. According to Business Standard report, the government plans to offload up to 3% stake in L&T held under Specified Undertaking of the Unit Trust of India (Suuti) through a block deal on Friday, said investment banking sources.
GLOBAL MARKET
Asian shares slipped on Friday and the dollar nursed losses in a week marked by growing uncertainty about the outcome of the US presidential election.
MSCI's broadest index of Asia-Pacific shares outside Japan slipped 0.4% after brushing its lowest levels since early August. It looked set for a loss of 1.7% for the week.
Investors have been unnerved in recent days by signs that the presidential race between Democrat Hillary Clinton and Republican Donald Trump may be tightening just days before Tuesday's vote.
European stocks were trading lower today following declines overnight on Wall Street as the closeness of the US elections continues to rattle nerves in the market.
Meanwhile, the Bank of England scrapped its plan to cut interest rates, which it said could now move up or down, and raised its forecasts for 2017 growth and inflation sharply due to the slide in sterling since Britain's vote to leave the European Union.
Oil prices were on course for their sixth straight day of falls on Friday, dragged lower by a surge in US crude inventories, timid demand and doubts over the ability of producers to coordinate output cuts.
PHARMA SHARES
Shares of pharmaceutical companies were under pressure with the Nifty Pharma index recorded its sharpest intra-day fall in past seven months. According to Bloomberg report, the US prosecutors could file charges by year-end in a criminal investigation of generic makers over suspected price collusion.
Dr Reddys Laboratories, Sun Pharmaceutical Industries, Glenmark Pharmaceuticals, Cadila Healthcare and Lupin fell between 4%-5% on the NSE. Cipla, GlaxoSmithKline Pharmaceuticals, Divis Laboratories, Piramal Enterprises and Aurobindo Pharma from the Nifty Pharma index were down in the range of 1%-7%.
SMS Pharma, Claris Lifesciences, Vimta Labs, Jubilant Life Sciences, Sun Pharma Advanced Research, RPG Life Sciences, Strides Shasun and Aarti Drugs were down 4%-5% on the BSE.
Nifty Pharma index, the largest loser among sectoral indices, was down 4.3% at 10,651, recording sharpest decline since August 24, 2015, when it fell 6.06%. The pharma index ended at its lowest level since June 21, 2016.
Thus far in the current calendar year 2016, the pharma index has underperformed the market by falling 10% against 6.6% rise in the benchmark index.
BUZZING STOCKS
Shares of cigarette makers such as ITC and VST Industries gained upto 4% on BSE after the Goods and Services Tax (GST) Council's propose to place tobacco products in the 28% tax slab and an additional cess. The current rate of taxation on cigarettes is around 64% and 81% on chewing tobacco.
“The structure of the rates is progressive in nature and therefore, will increase the purchasing power of the lower income class as many of the necessities are exempt. This forward looking piece of legislation will be a turning point for the country to be dubbed as golden sparrow of the world. The growth rate will accelerate to 9+ which will be tagged as the fasted growing large economy of the world,” Jimeet Modi added.
Shriram EPC soared 20% to Rs 37.40, extending its Thursday’s rally on the back of heavy volumes in an otherwise weak market.
Gujarat Narmada Valley Fertilizers & Chemicals (GNFC) dipped 4%, extending its yesterday’s 17% fall on BSE, after the company on Thursday after market hours said TDI (Toluene diisocyanate) plant of Dahej has been completely shutdown, as a precautionary measure, following a gas leak.
United Spirits has dropped to its 52-week low of Rs 2,041, down 4% on BSE in intra-day trade, extending it’s month-long decline on the bourses.
With Reuters inputs
