Sensex extends losses, Midcap sinks over 1%; Nestle in focus
Nestle India shares fell nearly a percent ahead of earnings. The packaged food maker's fourth quarter earnings are expected to good year-on-year due to low base but sequential performance may be impacted by demonetisation.
1:40 pm Nomura on inflation: WPI inflation is expected to rise in the next three months and is likely to average around 4.4 percent in 2017, much higher than 2 percent in 2016, says a Nomura report.
India's WPI inflation rose to a 30-month high of 5.2 percent in January from 3.4 percent in December. WPI inflation, which reflects the annual rate of price rise, has risen for the second straight month, notwithstanding the cash crunch following demonetisation.
"The (WPI) acceleration was entirely supply-push led by higher commodity prices rather than demand-pull; but it also suggests rising pressure on profit margins," Nomura India chief economist Sonal Varma said in the note.
1:20 pm Mining auction: Government has chalked out a plan to put as many as 280 mines with a mineral wealth of over Rs 10 lakh crore to auction in the next fiscal, a senior official said.
"The 280 mines planned for auction next fiscal have the mineral wealth of over Rs 10 lakh crore. Besides, there are 83 mines under litigation," Mines Secretary Balvinder Kumar told reporters here.
He said that the auction of the 83 mines under litigation depend upon the outcome of legal process.
Kumar also told that soon the drone technology will be used for preparing topography maps and inspection of mines.
Also read - When Jhunjhunwala grilled Tata Motors on its hedging policy
1:00 pm Market check
The market extended losses in afternoon trade, weighed by auto, metals, infra and select banks stocks after pricing in quarterly earnings.
Market valuations are slightly beyond comfort and with no big macro events lined up, a runaway rally is unlikely, says Mahesh Patil of Birla Sun Life AMC. He feels it is better to wait-and-watch on investments as earnings recovery is likely to be slow and the implementation of Goods and Services Tax (GST) is round the corner.
The 30-share BSE Sensex slipped 196.80 points or 0.69 percent to 28142.51 and the 50-share NSE Nifty fell 66.60 points or 0.76 percent to 8725.70.
The fall in broader markets was more compared with benchmarks. The BSE Midcap index shed 1.3 percent and Smallcap lost 1.5 percent on weak breadth.
About four shares declined for every share rising on bourses.
Nestle India shares fell nearly a percent ahead of earnings later today. The packaged food maker's fourth quarter earnings are expected to good year-on-year due to low base but sequential performance may be impacted by demonetisation. Profit is seen rising 24 percent year-on-year to Rs 227.5 crore and revenue may increase 15.5 percent to Rs 2,263 crore in the quarter ended December 2016, according to average of estimates of analysts polled by CNBC-TV18.
Tata Motors fell further, down nearly 10 percent as hedging losses are likely to continue for next 3-4 quarters. Edelweiss downgraded the stock to hold from buy, with reduced target price at Rs 501 (from Rs 604) after lowering FY17/18 EBIDTA estimates by 35/25 percent to Rs 29,500/38,500 crore to reflect weaker margins.
ICICI Bank, Sun Pharma, Infosys, Maruti Suzuki, Adani Ports and Tata Steel were down 1-4 percent while HDFC Bank, ITC, Reliance Industries and HDFC continued to support the market, up 0.3-0.9 percent.