Markets near day's low; Sensex slips below 28,000

Benchmark indices were trading near their day's lows in late trades as investors booked profits ahead of the meeting of global central banks.

At 3:10pm, the Sensex was down 124 points at 27,972. The Nifty was down 45 points at 8,590.

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(Updated at 2pm)

Benchmark indices remained choppy oscillating into positive and negative terrain as gains in index heavyweights helped cap downside.

At 2pm, the Sensex was up 31.06 points or 0.11% at 28,126.40. The Nifty was currently up 0.55 points or 0.01% at 8,636.20. In the broader market, the BSE Midcap and Smallcap indices were up 0.2%-0.8% each. Market breadth turned weak with 1331 losers and 1224 gainers on the BSE.

Index heavweights Infosys and Reliance Industries were up 0.6%-0.9% each.

Axis Bank extended gains and was up nearly 3% after losses in the previous session post weak first quarter earnings. The private lender reported 21% year on year (YoY) decline in net profit at Rs 1,556 crore for the quarter ended June 30, 2016 (Q1FY17), due to higher provisioning for bad loans.

Dr Reddy's Labs was down nearly 1% ahead of its first quarter earnings later today.

Among other shares, Swaraj Engines has rallied 10% to Rs 1,294, also its 52-week high on the BSE in intra-day trade, after the company reported its best ever quarterly performance in terms of volumes and financials, driven by growth in the tractor industry during the first quarter ended June 30, 2016 (Q1FY17).

Claris Lifesciences rallied nearly 8% to Rs 270 on the BSE after the company announced that it has received Abbreviated New Drug Application (ANDA) approval for Bupivacaine injection. The stock is trading at its 52-week high after rebounding 10% from its intra-day low of Rs 246.

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(Updated at 11:15am)

Amid a divergent trend among various index constituents, the Nifty 50 index traded near the flat line. The barometer index, the S&P BSE Sensex, traded a tad higher.

At 11:15 AM, the Sensex was up 31.06 points or 0.11% at 28,126.40. The Nifty was currently up 0.55 points or 0.01% at 8,636.20. The Sensex rose 46.15 points or 0.16% at the day's high of 28,141.49 in early trade, its highest level since 11 August 2015.

The barometer index lost 37.03 points or 0.13% at the day's low of 28,058.31 in morning trade. The Nifty rose 8.30 points or 0.09% at the day's high of 8,643.95 in early trade, its highest level since 23 July 2015. The index lost 15.20 points or 0.17% at the day's low of 8,620.45 at the onset of trading session.

In overseas stock markets, Asian stocks witnessed a mixed trend. Japanese stocks edged lower as expectations receded with regard to the government's soon-to-be announced fiscal stimulus package. The Nikkei 225 Average was currently down 1.45%. According to reports, Japanese government will inject 6 trillion yen ($57 billion) in direct fiscal outlays into the economy over the next few years, double the amount initially planned. However, the spending will come over several years, which means the initial impact will be less than hoped.

Meanwhile, investors are hoping for further easing of monetary policy from the Bank of Japan (BOJ) after the conclusion of a two-day monetary policy meeting on 28-29 July 2016. Strength in the yen against the dollar post last month's Brexit vote and data showing a slowdown in the Japanese economy have triggered expectations of further easing of monetary policy from the BOJ. A stronger yen hurts the competitiveness of Japanese exporters.

US stocks closed lower yesterday, 25 July 2016, as investors turned cautious ahead of a busy week of earnings and central bank meetings. The Federal Open Market Committee (FOMC) is widely expected to keep the benchmark fed funds rates unchanged after the conclusion of two-day monetary policy meeting on 26-27 July 2016. Market participant will scrutinize the Fed statement for clues on policy direction. The Fed has kept the benchmark fed funds rate unchanged after raising it for the first time in nearly a decade in December 2015.

Closer home, the market breadth indicating the overall health of the market was positive. On BSE, 1,162 shares rose and 1,033 shares declined. A total of 145 shares were unchanged. The BSE Mid-Cap index was currently up 0.38%. The BSE Small-Cap index was currently up 0.35%. Both these indices outperformed the Sensex.

IT stocks edged higher. Persistent Systems (up 3.52%), Wipro (up 1.26%), HCL Technologies (up 0.5%), Oracle Financial Services Software (up 0.33%) and Tech Mahindra (up 0.3%) edged higher. TCS (down 0.15%) edged lower.

Index heavyweight and software major Infosys was up 0.22% at Rs 1,082.85. The stock hit a high of Rs 1,086.30 and a low of Rs 1,074 so far during the day.

Pharma stocks declined. Alkem Laboratories (down 1.84%), Lupin (down 1.15%), Ipca Laboratories (down 0.48%), Divi's Laboratories (down 0.97%), Glenmark Pharmaceuticals (down 0.57%), Aurobindo Pharma (down 0.34%), Wockhardt (down 0.23%), Sun Pharmaceutical Industries (down 0.06%) and Strides Shasun (down 0.07%) edged lower. Cadila Healthcare (up 1.44%), Cipla (up 0.92%) and GlaxoSmithkline Pharmaceuticals (up 0.18%) edged higher.

Dr Reddy's Laboratories was down 0.23% at Rs 3,467. The company is scheduled to announce Q1 June 2016 results today, 26 July 2016.

JK Paper dropped amid volatility. The stock was down 2.36% at Rs 60.10. The stock hit a high of Rs 64.75 and a low of Rs 59.55 so far during the day. The company's net profit surged 79% to Rs 26.66 crore on 4.7% rise in net sales to Rs 606 crore in Q1 June 2016 over Q1 June 2015.

Earnings before interest, taxation, depreciation and amortization (EBITDA) rose 14% to Rs 116.70 crore in Q1 June 2016 over Q1 June 2015. The result was announced after trading hours yesterday, 25 July 2016.

JK Paper Vice Chairman & Managing Director Harsh Pati Singhania said that the improvement in performance in Q1 June 2016 is mainly due to higher production and sales, enriched product mix, continuous improvements in operating efficiencies and input cost reduction in comparison to Q1 June 2015.

Meanwhile, the government intends to get the Goods and Services Tax (GST) constitutional amendment bill passed in the Rajya Sabha during the ongoing monsoon session. The GST bill, which has been approved by the Lok Sabha is pending in the Rajya Sabha because of opposition to the bill in its current form by the Congress party. A constitutional amendment bill requires at least 50% attendance and support of two-third of those present and voting in the house.

For the GST bill to become a law, the bill also needs to be approved by half the state assemblies after its passage in the parliament. GST, touted as the single biggest indirect taxation reforms since independence, will simplify and harmonise the indirect tax regime in the country. The GST seeks to create a seamless national market in the country by replacing plethora of state taxes and central taxes by one tax. The month-long monsoon session of the parliament will conclude on 12 August 2016.

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