Sensex closes at two-week low on profit-booking
The Sensex closed down 32.14 points at 28,850.97, while the Nifty ended down 12 points at 8,711.70
Mumbai: Equity markets failed to hold on to gains made in the earlier part of the day, retreating from a 1.3% rise to close marginally lower, after investors booked profits. The markets fell for the fifth straight day to a two-week low as investors were also cautious ahead of the Delhi Assembly polls which will be held on 7 February. According to Bank of America Merill Lynch Equity Strategy report dated 4 February, a loss in Delhi polls for the Bharatiya Janata Party (BJP) could provide an excuse for a correction.
“We think the market is likely to see a correction of around 5% over next two months on account of supply of paper, rich valuations and weak earnings", the report added.
Earlier in the day, the Sensex gained 1.4%, or 395 points, to 29,277.83 points while Nifty jumped 1.3%, or 115 points, to 8,838.45 points.
The BSE’s 30-share Sensex closed down 0.11%, or 32.14 points, at 28,850.97 points, while the National Stock Exchange’s broader 50-share Nifty closed down 0.14%, or 12 points, at 8,711.70 points.
Since 29 January, the Sensex has fallen over 800 points and foreign investors have sold equities worth ₹ 1,750 crore, according to provisional data from exchanges.
Information technology (IT) companies rose after Cognizant Technology Solutions Corp. beat analysts’ sales forecasts in the three months ended 31 December, following strong services demand and a boost in revenue from its recent acquisition of US-based healthcare services provider TriZetto Corp. Wipro Ltd rose 3.2% to ₹ 637.30, Infosys Ltd 2.4% to ₹ 2,193.60 and Tata Consultancy Services Ltd (TCS) 1.5% to ₹ 2,551.90.
Among losers, Tata Power Co. Ltd fell 7.5% to ₹ 83.45 and Sesa Sterlite Ltd fell 4.1% to ₹ 207.80.
Among the sectoral indices, the IT index was the top sectoral gainer, up 2.1%, followed by the Teck and FMCG indices, which were up 1.3% and 0.6%, respectively. The power and realty indices were the top sectoral losers, down 2.8% each, followed by the consumer durables index which was down 2.3%. The metal and oil and gas indices were down 1.9% and 1.2%, respectively. Helathcare and capital goods indices were down 1% each. The auto index and Bankex fell 0.7% and 0.5%, respectively.
Indian Overseas Bank fell 10% to ₹ 50.30 after the bank’s gross non-performing loans as a percentage of advances rose to 8.12% in December quarter from 7.35% a quarter earlier. IOB reported its second straight quarterly loss.
UCO Bank fell 5.7% to close at ₹ 68.35 after its gross non-performing assets (NPA) widened to 6.5% in December quarter from 5.2% in the September quarter.
Allahabad Bank fell 3.1% to ₹ 107.30 after its gross NPA surged to 5.46% in December quarter compared with 5.36% in the previous quarter
Godrej Consumer Products Ltd rose 5% to ₹ 1,077 after the company reported a 35% increase in its net profit to ₹ 263.57 crore for the December quarter as compared with ₹ 195.77 crore a year ago.
Tata Motors Ltd fell 0.4% to ₹ 589.55 ahead of its December quarter earnings. A Bloomberg poll of 34 analysts estimated the company may post a consolidated net profit of ₹ 4,972.6 crore on net sales of ₹ 66,836.7 crore. On a stand-alone basis, according to three analysts, the company may post a net loss of ₹ 945.9 crore while net sales will be ₹ 8,609.9 crore.
HDFC Bank Ltd started the process of raising ₹ 10,000 crore from domestic qualified institutional investors and foreign investors after it received a formal approval from the foreign investment promotion board (FIPB) earlier on Wednesday, four people familiar with the development said. The book for the domestic part of the issue has already opened, according to two of the four. Housing Development Corp. Ltd rose 1.3% to ₹ 1,248.90 while HDFC Bank Ltd rose 1% to ₹ 1,077.25.
Pipavav Defence and Offshore Engineering Co. Ltd rose 6.9% to ₹ 53.45 after The Economic Times reported that Mahindra and Mahindra Ltd and the Hero group have started separate discussions with the company’s promoters to purchase a 19% stake in the company that has facilities to build warships, submarines and liquefied natural gas carriers.
Aurobindo Pharma Ltd fell 5.1% to ₹ 1,149.85 after the company reported a 7.93% decline in consolidated net profit at ₹ 384.35 crore for the December quarter, compared with ₹ 417.49 crore a year ago.
Novartis India Ltd fell 5.5% to ₹ 639.85 after the company reported a net loss of ₹ 1.18 crore for the December quarter as compared to a net profit of ₹ 15.23 crore in the same period last year.
Ramco Systems Ltd rose 13.2% to ₹ 524.30 after the company reported a net profit of ₹ 8.03 crore in December quarter as compared with net loss of ₹ 5.49 crore a year ago.
KEC International Ltd fell 10.4% to ₹ 85.85 after the company reported 14.15% decline in net sales to ₹ 1,586.79 crore in December quarter as compared with ₹ 1,848.43 crore last year same quarter.
So far in 2015, the Sensex has gained 4.9%, while foreign institutional investors have bought $2.75 billion from local equity markets and bought $4.42 billion from debt markets.
European markets opened lower following the European Central Bank’s (ECB) refusal to accept Greek bonds for funding. In the European markets, Dax Index fell 0.2%, FTSE 100 fell 0.2% while CAC40 Index fell 0.3%. The Athex Composite Index fell 5.3%.
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