The Sensex and Nifty fell sharply today as investors traded with caution ahead of the fourth quarter earnings season and Lok Sabha elections. Sentiment was also subdued after the International Monetary Fund (IMF) lowered global economic growth outlook. On Tuesday, the IMF reduced its global economic growth outlook by 0.2 percentage points to 3.3%, citing the US-China trade war and a potential disorderly British exit from the European Union as key risks. It also warned of high chances of further cuts to the outlook.
The Sensex ended 353 points lower at 38,585 while Nifty settled at 11,584, down 0.75%. Losses in financials also weighed on the main board, with the Nifty Bank index falling over 1%.
“While India maybe among the fastest-growing economies of the world, a slowdown in global growth would definitely hurt (the markets) along with factors like higher crude prices,” said Siddhartha Khemka, head of retail research at Motilal Oswal Securities.
“Strong FII inflows over the last couple of months, which lifted domestic markets, could reduce and we could also see profit-booking.”
Among the Sensex stocks, HDFC twins, TCS, Asian Paints and Bharti Airtel were among the top losers. HDFC Bank, HDFC, TCS and Asian Paints fell nearly 2% each while Bharti Airtel lost 3%. TCS and Infosys kick of the fourth quarter earnings season when they report earnings on Friday.
Research firms Nomura and Jefferies forecast a weak quarter for Indian auto and oil and gas companies, citing weak volume growth and refining/petchem margins. Nomura is optimistic on the pharmaceutical sector, saying prescription volumes have increased for most companies year-on-year. The Nifty pharma index rose 0.80%.
“Nifty has been consolidating in a narrow range of 11,550-11,700 since the past few trading session. In the short term, a breach of 11,550 could push the index towards 11,300-11,350 levels. We advise accumulating on meaningful corrections for the larger trend which remains extremely strong,” said Sahaj Agrawal, head of research for derivatives at Kotak Securities.
The broader markets however did not witness intense selling pressure. The BSE midcap index fell 0.33% while the smallcap index ended flat. (With Agency Inputs)
Pharma stocks in limelight, Nifty Pharma index up 2%
Pharma stocks attracted strong buying today with Nifty Pharma index up 2%. Nomura is optimistic on the pharmaceutical sector, saying prescription volumes have increased for most companies year-on-year as they gained market share. Shares of Cipla, Dr Reddy’s and Biocon were up between 1% and 3%.
JM Financial initiates coverage of HDFC AMC with ‘Buy’
JM Financial initiates coverage of HDFC AMC with ‘Buy’ rating and target price of ₹ ₹1,850. “We believe HDFC AMC’s strong brand pull (benefitting from parentage), relatively higher proportion of equity assets and continued delivery on fund performance make it one of the best plays to capitalize on the financial savings opportunity in the country. We see momentum on AUM growth sustaining…Recent TER guidelines, in our view, will lead to large AMCs passing on large proportion of the expense ratio cuts to distributors and thus the impact on profitability should be limited,” JM Financial said in a note. HDFC AMC shares were trading flat at ₹1,545.
Indiabulls Real Estate surges 12% extends gains
Shares of Indiabulls Real Estate extended gains rising 12% to₹121 on BSE. Oberoi Realty and Godrej Properties held on to gains, rising 4% and 3% respectively.
Real estate stocks shine, Indiabulls Real Estate surges 12%
Shares of many real estate companies were in the limelight today. Indiabulls Real Estate surged 10% to ₹119 while Oberoi Realty rose 4% and Godrej Properties jumped 3% to take the Nifty Realty index 2.4% higher.
Asia markets slip after IMF downgrades global growth
Asian shares slipped today as the International Monetary Fund (IMF) lowered its global growth outlook and as tensions over tariffs between the United States and Europe escalated. MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 0.3%, a day after it hit its highest since August 1. The Shanghai Composite Index fell 0.36% and Japan’s Nikkei lost 0.66%. Overnight, on Wall Street, the S&P 500 gave up 0.61% and the Nasdaq Composite declined 0.56%.