Markets Extend Gains for 5th Straight Week
MOVING TOO FAST? Nifty maintained crucial 10k level, while Sensex closed up at 32,325 points as stocks snapped a 2-day losing streak
Mumbai: Indian stocks snapped a two-day losing run on Friday with the Nifty gaining 0.5% after a late surge aided by short-covering in auto and bank shares. The rebound helped stock indices extend gains to the fifth straight week and Nifty close above the psychologically crucial 10,000-mark though market participants expect investors to be on the edge amid worries that the market has risen too fast, too soon in recent weeks.
The Sensex gained 87.53 points, or 0.27%, to close at 32,325.41. The Nifty rose 52.75 points, or 0.53%, to close at 10,066.40. This week, the Sensex gained 0.05% and the Nifty has risen 0.5%. But for the last minute advance on Friday, the market would have ended on a weak note this week. The stock market had weakened in the previous two trading sessions after the Reserve Bank of India held on to its neutral stance in bi-monthly monetary policy on Wednesday. While expectations of a 25-basis point cut in the key policy rate were baked into the stock prices, investors were hoping the central bank would tone down the outlook too. Analysts said the absence of triggers after the monetary policy prompted some traders to cut their bullish bets. “The RBI rate action and stance were on ex- pected lines. Either way, we don’t see external triggers like these affecting the liquidity flow much,” said Harsha Upadhyaya, chief investment officer-equity at Kotak Mutual Fund. Market participants do not expect any major moves on either side unless institutional investors step up their activity. This week, foreign portfolio investors were net sellers, offloading shares worth .₹ 2,368 crore, while their domestic peers bought to the tune of .₹ 3,553 crore in this period.
“In the absence of any major triggers, the market is not likely to see big movements in the coming weeks in either direction,” said Kunj Bansal, chief investment officer, Centrum Wealth Management. Leading brokerages have slashed their target price on drug major Lupin by as much as 16% after its June quarter earnings belied Street expectations. Analysts expect the current financial year to be challenging for the company in terms of US sales given the lack of blockbuster products.
Lupin on Wednesday reported a 59.4% fall in net profit in the June quarter at 358.06 crore due to sharp erosion in price of generic Glumetza in the US, strong rupee and destocking ahead of Goods and Services Tax implementation. Its shares hit a 52-week low of Rs 963 in Friday’s session, before ending at 990.05, down 0.3% from previous close. The stock is down 33% for the current year.
“Earnings trajectory will be determined by new product approvals in the US. Although LPC (Lupin) continues to gain approvals, its lack of high-value launches is likely to adversely impact near-term earnings,” said Nomura. 1,310 1,020 1,170 1,395 1,491 1,000