Moneycontrol
Feb 14, 2017 10:13 PM IST | Source: Moneycontrol.com

Tata Motors drives Sensex, Nifty lower; Fed's Yellen views eyed

The broader markets underperformed benchmarks, with the BSE Midcap falling 0.6 percent on weak breadth. About 1785 shares declined against 1048 advancing shares on the exchange.


Moneycontrol Bureau


The NSE Nifty snapped four-day winning streak on Tuesday, closing below the 8800-mark amid consolidation, dragged by Tata Motors post disappointing earnings. However, buying in oil and telecom stocks arrested losses. Investors remained cautious ahead of Federal Reserve chief Janet Yellen's two-day congressional testimony starting later today, which may give a hint for further rate hike.


The 30-share BSE Sensex was down 12.31 points at 28339.31 and the 50-share NSE Nifty fell 12.75 points to 8792.30.


"We usually see a strong reaction on the either side after such consolidation phase so traders should prepare themselves for one-sided movement," says Jayant Manglik of Religare Securities.


One way is to keep positions hedged or to book profits and wait on side lines for further cues, he suggests.


Andrew Holland of Avendus Capital feels risks are on the downside rather than upside for the markets, but that are being supported by favourable global momentum since demonetisation.


"We are starting to see a gradual pick up in trade, but it is not V-shaped. If and when goods and services tax (GST) is rolled out which is July 1, then I would think that also has a risk to the downside for the economy. Maybe that is a little bit of a shock which the economy will have to take in terms of implementation," Holland says.



The broader markets underperformed benchmarks, with the BSE Midcap falling 0.6 percent on weak breadth. About 1785 shares declined against 1048 advancing shares on the exchange.


On the macro front, WPI inflation (i.e. based on wholesale prices) jumped to a 30-month high of 5.25 percent in January from 3.39 percent in previous month due to increase in crude oil prices. Consumer price index (CPI) inflation declined to 3.17 percent in January compared to 3.41 percent in December 2016 due to low demand post demonetisation.


Tata Motors shares fell 3.7 percent after reporting dismal performance in December quarter. Profit tanked 96 percent year-on-year due to big loss in domestic business and operational weakness in JLR.


The Nifty Auto index also lost 1.5 percent. Maruti Suzuki, Hero Motocorp and Bajaj Auto were down 1-2 percent.


Sun Pharma also declined 0.7 percent after lower-than-expected earnings. Profit fell 4.7 percent year-on-year to Rs 1,472 crore, impacted by higher tax cost and slow growth in US business.


Vedanta was down 1 percent as earnings missed analysts' expectations. Profit jumped 4.5-fold to Rs 1866 crore on strong operational performance YoY but that was lower than estimates of Rs 2,150 crore.


Telecom stocks gained momentum that may be on hopes of Vodafone-Idea merger. Bharti Airtel and Idea Cellular rose 2-3 percent.


Oil & gas stocks like Reliance Industries, ONGC and GAIL gained 2-3 percent on value buying.


Sun TV Network gained 2.8 percent and Raj Television rallied nearly 6 percent after AIADMK General Secretary VK Sasikala's hopes to become a chief minister of Tamil Nadu dashed by Supreme Court verdict. The court has convicted her in the 20-year-old disproportionate asset case and sentenced her to 4 years of imprisonment.

On the global front, European markets were mixed and Asian stocks ended lower as investors maintained cautious stance ahead of Federal Reserve chief Janet Yellen's testimony.

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