Mumbai: It was a consolidation day for the market on Wednesday ahead of expiry of May derivative contracts (on Thursday) and after seeing sell-off in previous two sessions. Banks were the lead gainers today followed by FMCG, capital goods and oil stocks. The 30-share BSE Sensex gained 33.25 points at 27564.66 while the Nifty declined 4.75 points to 8334.60 after hitting an intraday low of 8277.95.
The broader markets too ended flat but the market breadth was negative with advance: decline ratio of 1166:1451 on the Bombay Stock Exchange. Given the bad fourth quarter earnings, the market is unlikely to see any major recovery in short term, feel experts. Market is looking fairly priced at current levels, said Sanjeev Prasad of Kotak Institutional Equities. He is unlikely to see earnings upgrades anytime soon.
According to him, investment cycle will take atleast 3-4 quarters to recover. Meanwhile, the rupee continued its weakness for the third consecutive session, breaching 64 a dollar after the dollar regained its mojo on the back of a batch of upbeat data that bolstered the case for interest rate hike this year in US. The rupee was trading at 64.06 a dollar, down 8 paise (at 16 hours IST).
Banking majors like HDFC Bank, Axis Bank, ICICI Bank and State Bank of India rallied 1-2 per cent ahead of RBI policy meet (on June 2). Reuters poll indicated that the RBI may cut repo rate by 25 basis points to 7.25 per cent. In major earnings reactions on Wednesday, Tata Motors tanked 5 per cent as it reported a weak operational performance with consolidated margins falling 280 basis points Y-o-Y. Barclays remained overweight on the stock, but reduced target price to Rs 685 from Rs 745 earlier.
Tech Mahindra plunged 14 per cent after reporting weak numbers with EBIT margin contracting to 12.37 per cent from 17.66 per cent on a sequential basis and PAT collapsing 41.4 per cent to Rs 472 crore due to margin pressure and higher forex loss. CLSA maintained its sell rating and cut target price by 4 per cent to Rs 550.
GAIL fell nearly 2 per cent after reporting 16 per cent sequential decline in profit at Rs 510.75 crore in Q4, impacted by higher other expenses and loss at petrochemicals division. BHEL extended gains in late trade, up over 3 per cent after it reported better than expected numbers on Tuesday.
Antique has buy rating on the stock with a target price of Rs 350 while Goldman Sachs maintained a neutral rating, but upped target price from Rs 225 to Rs 236. PSU companies saw buying interest ahead of their March quarter earnings on May 28. ONGC, Coal India, BPCL, NMDC and HPCL rallied 2-3 per cent. Share of Infosys, Sun Pharma, Mahindra & Mahindra, Vedanta, Wipro and Tata Steel declined 1-3 per cent whereas ITC, L&T, Bharti Airtel, NTPC and Tata Power gained 1-2 per cent.
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