Profit booking drags Nifty below 8,650; ICICI Bank falls 5%

Markets ended flat with negative bias, amid a volatile trading session, with L&T and ICICI Bank leading the decline amid weak corporate earnings. Investors also engaged in profit booking in the recent gainers at attractive and higher valuations.

The S&P BSE Sensex ended down 49 points at 28,003 and the Nifty50 slipped 2 points to settle at 8,637. Among broader markets, BSE Midcap and the Smallcap index inched up between 0.1%-0.4%.  

Rohit Gadia, Founder & CEO, CapitalVia Global Research said, "Nifty in its daily time series chart has formed a Doji pattern. Going forward key level to watch is 8,750-8,625. Market is expected to move much higher if it manages to move above the breakout level of 8,750. Important support is at 8,625-8,610 and resistance is visible around 8,700-8,750. Among domestic macro economic data, Services PMI data is schedule to announce on Wednesday which is expected to witnessed an uptick from previous level of 50.3. Meanwhile, investors are awaiting the progress on the Goods and Services Tax (GST) constitutional amendment bill in parliament. Government is planning to list GST bill for consideration and passage in Rajya Sabha's agenda this week".

Markets had rallied in early trades with the benchmark Nifty50 recording its highest level since April 16, 2015 after recent developments in the parliament rekindled hopes of the crucial GST Bill getting passed this week.

In overseas stock markets, European and Asian shares rose as the chances of a US interest-rate increase diminished, after the nation's economic growth for the second quarter came in below expectations.

The odds of a September US interest rate rise dropped to 12% from 18%, Fed Funds futures data showed, after the US economy grew at just 1.2% in the second quarter from a year earlier, well below estimates, data showed on Friday. Low US interest rates could support demand for emerging-market assets.

In mainland China, the Shanghai Composite closed 0.87% lower. In Hong Kong, the Hang Seng index was currently up 1.19%. China's official manufacturing purchasing managers' index slipped below 50 in July, indicating a contraction in the nation's factory activity for the first time in five months, official data showed today.

Back home, investors are awaiting the progress on the Goods and Services Tax (GST) constitutional amendment bill in parliament. According to reports, the government on Friday, listed the much-awaited GST bill for consideration and passage in Rajya Sabha's agenda for this week.

Further, manufacturing activities gathered pace slightly in July compared to the previous month to post a four-month high expansion on high demand from both domestic and external markets, showed widely-tracked Nikkei purchasing managers' index (PMI). PMI inched up to 51.8 points in July against 51.7 in the previous month, indicating a further improvement in overall business conditions across the sector.

Among sectoral indices, Capital Goods and Banks were the main losers primarily dragged by L&T and ICICI Bank. L&T and ICICI Bank slumped between 4%-5%.

ICICI Bank dropped over 5% after reporting a 25% fall in its net profit at Rs 2,232 crore in the June quarter, compared with Rs 2,976 crore in the same period a year ago. Asset quality pressure continues to persist and gross non-performing assets (NPA) as a percentage of total advances jumped to 5.87% in the quarter under review from 3.68% a year ago.

However, the engineering and infrastructure major L&T’s net profit for the quarter ended June grew 46% to Rs 610 crore against Rs 419 crore for the corresponding quarter of the previous year.

Other notable losers were Lupin, Adani Ports, HDFC Bank, ITC, GAIL and Cipla, all slippingby 1% each. On the gaining side, IT majors like TCS and Wipro surged between 2%-3%.

Maruti Suzuki India has hit its record high of Rs 4,888, gained over 2%, after the company reported 12.7% year-on-year (YoY) growth in total sales at 137,116 units in July 2016.

Among other shares, Advanced Enzyme Technologies listed at Rs 1,210, a 35% premium against its issue price of Rs 896 per share on the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).

Ashok Leyland fell over 3% after the company reported a 7% drop in M&HCV sales during the month of July.

Astra Microwave Products dipped nearly 5% after the company reported net loss of Rs 2.43 crore for the quarter ended June 30, 2016 (Q1FY17), because of lower operational income.

Narayana Hrudayalaya rallied 9% after the company reported consolidated net profit of Rs 16.72 crore in June quarter (Q1FY17) against a loss of Rs 50 lakh in the year-ago quarter.

Quess Corp surged 16% after reporting 37% year on year (Y-o-Y) growth in consolidated net profit at Rs 24.70 crore for the quarter ended June 30, 2016 (Q1FY17), compared to Rs 18 crore in the year-ago quarter.

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