Mumbai: The market snapped four-day winning streak amid volatility on Wednesday on account of profit-taking. The broader indices underperformed benchmarks with the BSE Midcap and Smallcap indices falling 1 percent and 0.67 percent, respectively. The Sensex slipped 109.80 points to close at 25473.89 while the Nifty held 7600 level amid pressure, down 29.55 points to 7626.85.
Experts believe the market has to consolidate more after this stupendous rally of 1000-points in past few sessions. According to them, the further upside is largely depend on monsoon and Union Budget (in first half of July). "At this stage investors are focused more on, 1) how the whole monsoon is going to play out and it is going to be as severe as what it is being played out to be and 2) the Union Budget.
What does the Union Budget have in store and are there any real big bang initiatives in the budget to kick start economic growth and ensure that we come out of this sub-5 percent growth rate," says Nilesh Shah, MD & CEO, Envision Capital. If all goes well, Shah says the Nifty may even surpass levels of 8400-8500 in 12-18 months.
On the economic data front, trade deficit increased 11.2 percent (down 42 percent year-on-year) to $11.23 billion in May compared to last month, the highest since July 2013. However, exports were growing for the second consecutive month, up 9.3 percent (up 12.4 percent Y-o-Y) to $28 billion M-o-M. Imports rose 10 percent (down 11.4 percent Y-o-Y) to $39.23 billion during the same period.
Divestment plan: Finance Minister Arun Jaitley has given his approval to the divestment plan for the fiscal year FY15. He has kept the interim Budget divestment target unchanged at Rs 36,925 crore. The key sectors for divestment this year are power, coal, steel, oil and gas.
Stocks in action
The selling pressure was seen in oil & gas, capital goods, power and FMCG stocks while IT and healthcare stocks supported the market.
Shares of ONGC, NTPC, Tata Power, Coal India, Hindalco Industries and BHEL topped the selling list, falling 3-5 percent followed by Reliance Industries, ITC, L&T, Tata Motors, HUL and Bharti Airtel with 1-2 percent. However, Infosys was the top gainer, up 3.6 percent amid large volumes. TCS, Hero Motocorp, Bajaj Auto and Cipla gained 1-2 percent. India's largest lender State Bank of India advanced 1 percent as reports suggested that the bank is all set to kick off consolidation in the banking industry by merging five of its associate banks.
State Bank of Bikaner and Jaipur, State Bank of Mysore and State Bank of Travancore rallied 5-11 percent. Dr Reddy's Labs was up 1.7 percent on reports that it is going to launch vitiligo cure Melgain lotion in India on Thursday. In the broader space, L&T Finance Holdings plunged 5 percent. Its offer for sale issue of 2.75 crore shares (held by promoter L&T) including greenshoe option was fully subscribed.
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