Equity benchmarks ended with a three-week closing low on Thursday following negative leads from global peers after investors digested expected interest rate hike and hawkish view from US Federal Reserve.
The 30-share BSE Sensex was down 80.18 points at 31,075.73 while the 50-share NSE Nifty ended below 9,600 level for the first time since May 26, down 40.10 points at 9,578.05 despite positive market breadth.
According to V Srivatsa of UTI MF, market may consolidate while trying to digest the impact of GST in the short-term as it is underestimating the impact of GST on the near-term financials of most of the companies on the manufacturing side.
There could be earnings surprises on the downside for manufacturing companies at least for one quarter or even two, according to him.
With no major event around, Jayant Manglik of Religare Securities feels global cues and further update on monsoon will dictate the market trend ahead.
Meanwhile, Federal Reserve raised interest rate by 25 basis points to 1.25 percent, which was expected line. It also outlined its plan to reduce USD 4.2 trillion portfolio of treasury bonds and mortgage-backed securities, with one more rate hike during the year, followed by three such rate hikes in 2018.
Bourses in Europe moved lower, with the France’s CAC, Germany’s DAX and Britain’s FTSE down around 0.8 percent as investors waited to hear from the Bank of England. Asia also mostly ended lower, with the Hong Kong’s Hang Seng and Australia’s ASX 200 falling over a percent.
Back home, healthcare stocks were in action today, with the Pharma index up over a percent. Dr Reddy’s Labs, Sun Pharma and Cipla gained more than 1 percent.
Aurobindo Pharma was the biggest gainer among Nifty stocks, up nearly 7 percent on approval from USFDA for Sevelamer carbonate oral suspension that filed from its unit-VII facility in Hyderabad.
Lupin gained 0.4 percent after the pharma major launched its Bupropion hydrochloride extended-release tablets, the AB rated generic equivalent of Valeant Pharmaceuticals’ Wellbutrin XL, which is indicated for the treatment of major depressive disorder and prevention of seasonal affective disorder in adults.
IT major Wipro was up nearly 2 percent on winning IT applications managed services contract from Finnish company Valmet.
Reliance Industries extended gains, up 2.1 percent on top of over 3 percent rally in previous session while TCS, L&T, HDFC, ICICI Bank, HDFC Bank, Infosys, M&M and Tata Motors were down 0.6-2.4 percent.
PSU oil and gas companies’ shares prices saw selling pressure, with the IOC, HPCL, BPCL, GAIL and ONGC down 1-5 percent.
In broader space, Shipping Corporation of India gained nearly 8 percent on buzz of stake sale.
PSU banks like Vijaya Bank, United Bank, Union Bank, UCO Bank, Syndicate Bank, PNB, IOB, IDBI Bank, Central Bank, Corporation Bank, Canara Bank, Bank of Maharashtra and Bank of Baorda declined up to 4.4 percent.
About 1,372 shares advanced against 1,275 declining shares on the Bombay Stock Exchange.