Mumbai: The market fell more than 1 per cent on Monday, reacting to the disappointing March quarter earnings of ITC and SBI. The broader markets outperformed benchmarks marginally. The 30-share BSE Sensex fell 313.62 points to 27643.88 and the 50-share NSE Nifty closed below the 8400-mark, down 88.70 points to 8370.25.
The BSE Midcap and Smallcap indices closed flat with negative bias. Experts believe the market may remain rangebound for the next couple of months. Tushar Pradhan of HSBC Global Asset Management believes there is no consensus on whether the economy has turned.
Meanwhile, the negative news in the market, in terms of poor quarterly earnings, has now been taken care of and it will now take cues from positive global sentiments and the RBI policy on June 2, said Dipan Mehta, member, BSE & NSE. The market breadth was in favour of declines with the advance:decline ratio of 1153: 1532 on the Bombay Stock Exchange.
FMCG, capital goods, banking & financials, healthcare, metals and select technology stocks saw selling pressure. ITC dropped 3.3 percent after posting a dismal set of earnings in the fourth quarter. Most brokerages maintained their ratings, but cut target price and the FY16-17 EPS estimates on the stock. CLSA has downgraded Tata Steel to sell with a target price of Rs 290 per share after it reported dismal March quarter earnings.
The brokerage also slashed FY16-17 EBITDA by 9-19 percent. Shares of the steel conglomerate fell 2.5 percent. Tata Motors plunged 2 percent and BHEL declined 0.2 percent ahead of March quarter earnings on May 26. A CNBC-TV18 poll expects Tata Motors to report 0.3 percent growth in Q4 profit and BHEL to register 57.5 percent decline in profit.
Shares of HDFC, Infosys, L&T, Reliance Industries, State Bank of India, Axis Bank, Vedanta and HUL dropped 1-3 percent. However, ONGC bucked the trend, up 1.9 percent followed by Bharti Airtel with 1.25 percent gains and Wipro with 0.6 percent upside. Lupin gained 1 percent while Tata Power fell 1.2 percent on news that Lupin will replace Tata Power in the BSE Sensex 30 list with effect from June 22.
Public sector lender Canara Bank was down 3.7 percent after its asset quality weakened in Q4. Profit grew by 0.3 percent while net interest income fell 1.9 percent. Asian markets outperformed Indian equities today. Shanghai surged 3.35 percent, closing at its highest level since 2008 after China Government announced a list of more than 1000 infra projects that it is inviting private investors to help fund and build.
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