Stock Market

Fed-led Sensex rally fizzles out in late trade; HDFC twins drag


Chillicious Team

In late trade, the market failed to hold 1 percent rally driven by Federal Reserve meet outcome, closing flat on Thursday due to correction in European markets. HDFC group, pharma, metals stocks and Reliance Industries were under pressure in last hour of trade.

The 30-share BSE Sensex fell 5.11 points to 24677.37 after rising more than 260 points intraday. The 50-share NSE Nifty managed to hold 7500-mark, rising 13.80 points to 7512.55. The BSE Midcap index was up half a percent but Smallcap ended flat.

After the US Federal Reserve stayed put and did not raise rates, Vikas Khemani of Edelweiss Securities believes the focus will shift to local issues such as earnings, corporate performance, Reserve Bank’s April policy move, among others.

According to him, unless liquidity concerns make a comeback, Nifty may not once again test levels of 6800-7000.

European equities opened higher but could not sustain gains, trading sharply lower despite the US Federal Reserve signalling fewer interest rate hikes this year. Germany’s DAX and France’s CAC fell nearly 2 percent followed by Britain’s FTSE with 0.6 percent loss (at 16 hours IST). Asian markets closed mostly higher with China’s Shanghai and Hong Kong’s Hang Seng up 1.2 percent each.

On home turf, Lupin was biggest loser on Sensex, down more than 4 percent after USFDA’s nine observations on Goa plant disclosed by the company, which include poor sanitary condition in buildings, inappropriate test procedures etc. Spillover effects were seen on other stocks – Cipla, Sun Pharma and Dr Reddy’s Labs were down over a percent.

However, midcap pharma stocks saw buying interest. Orchid Pharma rallied 11 percent on getting USFDA approval for Rasagiline generic formulation. Marksans Pharma jumped 14 percent after the UK health regulator allowed company to manufacture and market critical products for UK markets.

GAIL surged 4 percent after the Petroleum and Natural Gas Regulatory Board (PNGRB) revised company’s KG basin pipeline tariff to Rs 45.32/mbtu that will be effective between April 2016-February 11, 2017.

Bharti Airtel gained 0.6 percent as the country’s largest telecom operator has decided to acquire Videocon Telecom’s spectrum for Rs 4,428 crore. Videocon Industries rose 1.3 percent.

Adani Enterprises rose 1.7 percent. Jeyakumar Janakraj, CEO of Adani Mining Australia says the company has secured landholder’s agreement for Australian coal mine, a very significant project for the company. He expects legal proceedings with respect to Carmichael Mine (which has a life of over 100 years) to close by August-October 2016. “Mine will yield 60 million tonne of coal per year post full ramp-up,” Janakraj says.

HDFC, HDFC Bank, Mahindra & Mahindra and Tata Steel fell over a percent while Adani Ports, ONGC and BHEL rally 3-4 percent.

In broader space, Mphasis surged 5 percent as a media report indicated that US private equity firm Blackstone Group is set to acquire Hewlett-Packard’s 60.48 percent stake in company.

Deep Industries gained 8 percent on order worth Rs 247 crore from ONGC and Career Point was up 3 percent on partnership with government-owned NSDC for skill development programs. Financial Technologies rose 2 percent on concluding transaction of sale of stake in Dubai Gold & Commodities Exchange.