Global cues drag Sensex 135pts; HDFC falls 4%, Bharti up 7%

Andrew Holland of Ambit Capital says there are many factors that can take market below 8500. He expects a tough few months for investors and also foresees a correction in global equities this year.

The broader markets followed the same trend too, the BSE Midcap and Smallcap indices lost 0.3-0.4 percent. Declining shares outnumbered advancing ones by a ratio of 1584 to 1261 on the Bombay Stock Exchange.

Meanwhile, the rupee fell further today, down 21 paise to 62.76 a dollar due to rise in dollar and increased demand for the dollar from importers.

Globally, global markets also had a weak session today despite the better than expected Chinese inflation data and positive lead from Wall Street. In Asia, major markets like Nikkei, Hang Seng and Shanghai were down 0.5-1 percent. European markets fell 0.6 percent (at 16 hours IST) on Greek tensions.

Back home, HDFC took the big knock among bluechips today, down 3.7 percent. Reliance Industries, HUL, Sun Pharma, Hindalco Industries, Tata Steel and Tata Power were other prominent losers on Sensex, down 1-2 percent.

Jindal Steel shed 2.4 percent as sources told CNBC-TV18 that nominated body appointed by government may examine bid process for 3 coal blocks, including Gare Palma IV/2 & 3 (allotted to company). Gare Palma IV/1 and Marki Mangli 3 were other two blocks.

Dr Reddy’s Labs fell 0.8 percent on profit booking. A media report quoting unnamed sources says Dr Reddy’s has been in talks to buy Indian unit of Belgium's UCB for USD 135 million.

However, telecom stocks saw huge buying interest as spectrum auction has reached last leg while bidding has closed for 900 mhz spectrum. Bharti Airtel was up 7 percent, and Idea Cellular & Reliance Communications jumped 2.5-3 percent as the day on day jump in bid prices for 900 mhz has fallen to 2 percent versus 5 percent earlier, raising hopes of some moderation in bidding.

Coal India climbed 4 percent, hoping coal price hikes for non-power consumers. CLSA maintains buy on the stock with a target price of Rs 435 apiece as the brokerage sees a decent possibility of a large price hike for non-power consumers in FY16, which would be a catalyst for the stock.

Mahindra & Mahindra was up 1.9 percent followed by Infosys, ICICI Bank, Bajaj Auto, Hero Motocorp with marginal gains.

In the broader space, KNR Constructions gained 5 percent on getting international orders worth Rs 515 crore.

Monnet Ispat climbed 9 percent as the company is looking to sell stake in its power and sponge business. Additionally the company’s power subsidiary won the Utkal C block for a negative bid price of Rs 770 per tonne.

Natco Pharma rallied 7 percent after the US Supreme Court denied petition for certiorari on Tamiflu patent. Hence, this is positive for Natco as this outcome will allow Natco to launch Tamiflu in the US markets earlier than expected. Natco is partnered with Alvogen in the USA for marketing of this product.