Sensex, Nifty continue to struggle; pharma, IT & metals laggards

Moneycontrol Bureau1:30 pm FII view: A clear economic and earnings recovery is finally visible and growth is at an inflexion point, says Ridham Desai, Head of Equity Research & India Equity Strategist at Morgan Stanley. “We are, for first time in last two years, seeing justification of share price,” he told CNBC-TV18 in an exclusive interview from the sidelines of a Morgan Stanley conference. "Earnings, in this quarter itself, have turned positive with the exception of corporate banks. Mid teens earnings growth is likely over next couple of years," he said. Key calls to watch here would be deflation in producer price index and nominal effective exchange rate, Desai says. Headline index looks like it will get exhausted. Another 3-4 percent upside is expected post which it might take a pause.Don't miss: Sun Pharma falls 6% on weak sales guidance, price pressure woes

Tata Motors, Tata Steel, NTPC, Maruti and Adani Ports are top gainers in the Sensex. Among top losers are Sun Pharma, GAIL, TCS, Infosys and ONGC.

Oil prices were mixed today as investors awaited manufacturing data from China ahead of an OPEC meeting on production caps. Dealers expect Chinese manufacturing data due to set the tone at mid-week. China is the world's largest energy consumer so any indication of how its economy is performing acts as a key driver for oil prices.

Meanwhile, Mahantesh Sabarad, Deputy VP Research, SBICap Securities says that investors should stay away from pharmaceutical space, which is already reeling under US FDA issues.

“We see a risk for the sector from the US presidential elections later this year,” he said in an interview.

The entire business model of pharma companies in the US comprising of substantial filings, inspection of facilities & FDA compliance and marketing distributing strategy is threatened at present, he added.