The sell-off continued on Monday as equity benchmarks lost over half a percent, in addition to 1.3 percent loss in last week as investors remained cautious ahead of September quarter earnings. Weakness across the globe and fall in index heavyweights drove the market down.
The 30-share BSE Sensex was down 143.63 points at 27529.97 and the 50-share NSE Nifty fell 63 points to 8520.40. The broader markets also caught in bear grip as the BSE Midcap falling nearly a percent on weak breadth. About 1513 shares declined against 1298 advancing shares on the exchange.
The current fall is unlikely to impact the bull run, believe experts. The Nifty can fall another 100-200 points amid rangebound trade but that is a part of this bull run, they say.
“Bull market is still alive and well,” Jagdish Malkani, member of NSE says. He believes that unless anything major happens globally, the market is likely to continue its upward movement.
According to Neelkanth Mishra of Credit Suisse, September 2016 results are likely to be weak, and the pace of cuts may pick up. He says add global volatility, and broader markets may stay rangebound till signs of a broad-based economic pick-up become visible. He remains cautious and watchful on broader markets for now.
European markets were under pressure as investors remained cautious ahead of earnings, key data and a European Central Bank (ECB) meeting later this week. France’s CAC, Germany’s DAX and Britain’s FTSE fell 0.5-0.8 percent, at the time of writing this article. Most Asian markets too ended lower with China’s Shanghai and Hong Kong’s Hang Seng losing over 0.7 percent.
Back home, ICICI Bank was the biggest gainer, up 7 percent on hopes of repayment of loan from Essar Group after Essar Oil-Rosneft deal. SBI also gained half a percent.
Essar Group signed an agreement on Saturday to sell its Gujarat-based refining company along with its Vadinar Port to Russia’s Rosneft and a consortium led by Trafigura and United Capital Partners (UCP). The Russian investors will acquire 98 percent in Essar Oil and have paid Rs 72,800 crore for the company’s refining and retail assets, and Rs 13,300 crore for the Vadinar Port. This deal will help Essar substantially reduce its interest cost and debt.
Among others, HDFC Bank, Reliance Industries, HDFC, L&T, M&M, Tata Motors, Maruti Suzuki and Hero Motocorp lost 1-3 percent whereas NTPC gained 1.8 percent followed by ITC and HUL.
After quarterly earnings, UltraTech Cement was down 0.7 percent as operating profit margin missed analysts’ expectations, which was 18.6 percent in Q2 against 20 percent estimated by CNBC-TV18 poll. Profit beat estimates, up 31.5 percent on other income and operational performance.
Housing finance company DHFL gained 2 percent after profit grew by 28.9 percent and total income 19.7 percent on yearly basis. Even the management is extremely optimistic about next 2 quarters.
Lakshmi Vilas Bank lost 0.4 percent as asset quality during July-September quarter weakened further. Gross non-performing assets increased to 2.7 percent from 2.14 percent and net NPA climbed to 1.87 percent from 1.3 percent on sequential basis.
In the broader space, Prozone Intu Properties shares were locked at 20 percent upper circuit after ace investor Radhakishan S Damani, the guru of Rakesh Jhunjhunwala, bought 1.29 percent stake in the company during July-September quarter.
Mirc Electronics also jumped 20 percent as investor Vijay Kishanlal Kedia purchased around 1.2 percent stake in the quarter gone by.