Market Update: Sensex, Nifty crack post Budget; IT, Pharma outperforms, ITC top gainer, SBI falls 1%

The market did not take Budget 2018 in the right stride with the introduction of long-term capital gains tax on sale of listed securities on gains of over Rs 1 lakh. The Finance Minister introduced a long-term capital gains tax of 10 percent if the gains exceed Rs 100,000 without allowing the benefit of indexation.

However, all gains till January 31, 2018 will be grandfathered and short term capital gains remains unchanged at 15 percent.

The Nifty was down 80 points or 0.71 percent on Friday morning and was trading below the 11K mark at 10,938 while the Sensex fell 256 points and was trading at 35,650. The fall in the benchmark indices was aided by midcaps, the Bank Nifty and the Infra space.

But the sectors which traded in the green included the IT space led by stocks like Info Edge, TCS, HCL Tech and Tech Mahindra. The CNX Pharma index gained over 1 percent led by stocks like Sun Pharma, Lupin, Glenmark Pharma, Dr Reddy's Labs and Aurobindo Pharma.

IT from the FMCG space jumped 2.4 percent. Edelweiss Financial has maintained a hold on ITC with a target price of Rs 313 as Budget 2018 left the tax structure for cigarettes unchanged which was much softer than our anticipation, it said.

The house expects the stock to re-rate due to improving prospects.

Morgan Stanley has maintained an overweight rating on ITC with target of Rs 320 as there was no change in cigarette tax. It is of the view that the next trigger is volume growth and outcome of GST Council meeting. The research firm expects very low probability of introduction of additional GST tax slab for cigarettes.

The top Nifty gainers included ITC which jumped over 2 percent followed by Dr Reddy's Labs, Sun Pharma, Lupin and HCL Tech. The most active stock apart from ITC was State Bank of India which was down 1 percent while Ashok Leyland, TCS and Reliance Industries were the other active stocks.

The top Nifty losers included names like Indiabulls Housing Finance which fell over 3 percent followed by HDFC, ONGC, Kotak Mahindra Bank and Axis Bank, each shedding 2 percent each.

The top Sensex gainers were Info Edge, ITC, Aditya Birla Fashion and Retail, Bajaj Finserv and Fortis Healthcare. The top losers included PC Jeweller which tanked 15 percent followed by Vakrangee which was down 10 percent. Cummins India and eClerx were the other top losers.

Baaj Auto from the Nifty was one of the few stocks which hit fresh 52-week high. The stocks which hit new 52-week low included names like Allahabad Bank, Cummins India, LIC Housing Finance and MCX India.

The market breadth was in favour of the declines on Friday morning with 222 stocks advancing while 1383 stocks declined and 409 stocks remained unchanged. On the BSE, 348 stocks advanced while 1766 stocks declined and 64 remained unchanged.

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