Stock Market

Weak global cues, oil drag Sensex 253 pts ahead of FOMC meet


Chillicious Team

Fall in global peers and oil prices dragged Indian equity benchmarks 1 percent Tuesday ahead of Federal Reserve’s two-day meeting that will begin tonight. Pharma, FMCG, technology and HDFC group stocks were under pressure.

The 30-share BSE Sensex fell 253.11 points to 24551.17 and the 50-share NSE Nifty declined 78.15 points to 7460.60. The broader markets also caught in bear grip as the BSE Midcap and Smallcap indices slipped 0.8 percent and 0.6 percent, respectively.

On the global front, European equities were under pressure with FTSE, CAC and DAX falling around a percent, tracking a shaky lead in Asia where markets were mostly lower. The Bank of Japan decided to keep its monetary policy steady rather than increasing its firepower. Japan’s Nikkei and Hong Kong’s Hang Seng fell 0.7 percent each while Shanghai gained 0.2 percent.

Oil prices fell for a second day today, as concerns took hold that a six-week rally may have run its course after OPEC doused hopes for a speedy erosion of an overhang of unwanted crude. Brent crude futures declined 2.7 percent to USD 38.45 a barrel and WTI crude futures slipped 2.6 percent to USD 36.2 a barrel (at 16 hours IST).

On home turf, HDFC plunged 3.6 percent. Goldman Sachs downgraded the stock to sell from neutral as it believes that the stock will continue to underperform broader Sensex and retail private banks on structurally lower growth and profitability. The brokerage also slashed target price to Rs 990 from Rs 1,190 earlier as it cut FY17-18 earnings per share estimates by 9-13 percent to factor in lower lending spreads and higher credit costs.

Lupin topped selling list on Sensex, down 7.6 percent after it said US health regulator cited 9 observations in Goa inspection last week.

Among others, ITC, Sun Pharma, Dr Reddy’s Labs, Cipla, TCS, Tata Motors and HUL declined 1.5-3 percent while SBI (up 1.8 percent), Tata Steel (up 1.2 percent), Bharti Airtel (up 0.8 percent), Reliance Industries (up 0.2 percent) and Axis Bank (up 0.8 percent) bucked the trend.

In broader space, Anuh Pharma crashed 10 percent as European health regulator suspended certificate of suitability for three drugs – Erythromycin Ethyl Succinate, Erythromycin and Pyrazinamide.

Crompton Greaves shares lost 71.7 percent after demerger of consumer products business. Shareholders will get one share of consumer products business for every one share held in the company.

About 1633 shares declined against 1006 advancing shares on the Bombay Stock Exchange.