Stock Market

Profit booking, global cues drag Sensex, Nifty lower; PNB up 3%


Chillicious Team

Equity benchmarks erased some of previous day’s gains on Wednesday due to profit booking and weak global cues. Auto, technology and select private banks stocks fell while PSU banks, select FMCG and pharma stocks gained.

The 30-share BSE Sensex fell more than 250 points intraday but managed to trim losses in last couple of hours of trade. The index slipped 69 points to close at 25704.61.

The 50-share NSE Nifty declined 20.60 points to 7870.15. The market breadth was marginally negative as about 1319 shares declined against 1227 advancing shares on Bombay Stock Exchange.

Experts expect the consolidation to continue in near term but they don’t see major fall in market.

Gautam Shah of JM Financial says he remains of the view that unless 7,780 and 7,700 break on a closing basis the trend shall remain up. He expects the index to re-test 8,000, take it out and move onwards to 8,150 levels.

State Bank of India gained 1.8 percent after the country’s largest lender said the board has given in principle approval to merge five subsidiaries (along with Bhartiya Mahila Bank) with itself. Brokerages feel the merger is long term positive for the bank but financially, it may be negative in the near term due to higher retirement cost. State Bank of Mysore rallied 9 percent and State Bank of Travancore gained 2 percent while State Bank of Bikaner and Jaipur lost 3 percent on profit booking.

Punjab National Bank rallied 3 percent after its CMD Usha Ananthasubramanian says recovery expectation for FY17 are at Rs 15,000-20,000 crore and the bank has done major cleansing during the quarter. The bank posted a loss of Rs 5,367 crore (the highest ever loss by any Indian bank) against profit of Rs 306.6 crore and its provisions jumped nearly 3-fold to Rs 10,485 crore on yearly basis.
Auto stocks were under pressure today, especially Maruti Suzuki (down 0.8 percent) and Mahindra & Mahindra (down 1.6 percent) after their popular passenger vehicle models in India — Celerio, Eeco and Scorpio — failed crash test by vehicle safety group Global NCAP with ‘zero star’ ratings. Ripple effect was seen in other auto stocks – Tata Motors, Bajaj Auto and Hero Motocorp declined more than 1 percent.

Lupin was up over a percent ahead of fourth quarter earnings. A CNBC-TV18 poll expects profit to increase 32.7 percent and revenue to rise 20 percent compared to year-ago period, led by US business.

JSW Steel gained 1.5 percent after better-than-expected earnings in Q4. Profit jumped nearly 3-fold to Rs 171 crore YoY, supported by other income and operational performance.

Among others, HDFC Bank, HDFC, TCS, Infosys and HUL were down 0.4-1 percent while ITC, L&T, ONGC, Dr Reddy’s Labs and Tata Steel gained 0.5-2 percent.