Nifty closes below 8550; Tata Motors drags, pharma rallies

JP Morgan's chief global strategist Joyce Chang prefers developed market equities over emerging markets but she says India story stood out among emerging markets. Chang sees near term consolidation in Indian equities but is positive on India in the medium term.

Meanwhile, the Asian Development Bank is also bullish on India. The resident commissioner Johanna Boestel told CNBC-TV18 that the government's reforms drive will help the country grow at 7.8 percent in 2015-16 and will surpass China going forward.

Banks stocks dragged again; State Bank of India, ICICI Bank and HDFC Bank were down around a percent each whereas rival Axis Bank gained 0.6 percent. Housing finance company HDFC remained major contributor to the Sensex, up 1.5 percent.

Tata Motors extended losses in late trade, falling 3.4 percent. Infosys and TCS too lost ground in late trade, down more than 0.5 percent. Among metals, Hindalco Industries and Tata Steel fell 1-2 percent while Sesa Sterlite gained 1.6 percent.

Jindal Steel rebounded today with 1.5 percent upside after the Delhi High Court issued notice to the government asking why the company's winning bids for two blocks have been cancelled. The court also restrained the government from allotting Tara coal block to Coal India.

Healthcare stocks were in focus. Sun Pharma and Ranbaxy Labs climbed more than 1.5 percent after CCI approved their plan to divest all 7 brands to Emcure Pharma. The Reserve Bank of India also allowed Sun to transfer Ranbaxy’s overseas investments.

Shasun Pharma and Strides Arcolab gained 3-4.5 percent after the CCI gave its approval to the proposed merger between the 2 pharma companies. Dr Reddy's Labs advanced 1.7 percent on agreement with Hetro to accelerate access to hepatitis C treatment. Suven Life Sciences rallied 6.4 percent on getting three product patents for NCEs in Canada, Japan and Korea.

However, Aarti Drugs tanked 7 percent after the US Food and Drug Administration issued an import alert on company’s Palghar unit in Maharashtra, though the company says it won’t have major impact on earnings.

Oil marketing companies like BPCL, IOC and HPCL gained 3.4 percent, 1.7 percent and 1.6 percent, respectively. Goldman Sachs added BPCL to its conviction buy list with a 12-month target price of Rs 996 (37 percent upside). The brokerage also upgraded IOC to buy from neutral with a 12-month target price of Rs 427 (24 percent upside) and reiterated buy on HPCL.

Among others, Bharti Airtel, Wipro, NTPC, Cipla, GAIL and BHEL were up 1-3 percent.

In the broader space, NIIT Technologies tanked 6 percent as the company will have to make a provision of USD 10 million against unbilled revenue in the March quarter which is around 2.5 percent of FY15e dollar revenue.

The market breadth was in favour of declines. About 1090 shares advanced and 1719 shares declined on the Bombay Stock Exchange.

Global markets were subdued today. Asian stocks were mixed over China growth concerns as Chinese PMI fell to 11-month low of 49.2 while European markets traded sideways today.