Mumbai: The market fell marginally on Thursday, continuing southward journey for the second consecutive session amid weak global cues and consolidation.
The Sensex declined 76.26 points to 25589.01 and the Nifty slipped 22.80 points to 7649.25 weighed down by technology stocks.
The broader markets too were under pressure with the BSE Midcap and Smallcap indices losing 0.5 per cent each. Experts are perplexed due to the market's movement in last three-four sessions. They see the Nifty breaking 7500-7400 levels in short term but in case of long term, they believe the index is likely to gain another 12-15 per cent by the end of FY15.
Bharat Iyer, MD & Head, Equity Research India JPMorgan says, "We are trading at 16-17 times forward multiple, which is barely ahead of the long-term average. Even if we presume that here onwards, gains will be driven by earnings growth, we are going to see a pick up in earnings growth, about 12-14 per cent this year and upwards of 16 per cent next year. So even without significant re-rating, this market can deliver a decent return."
According to Kalpana Morparia, CEO, JPMorgan India, India is likely to see a secular uptrend in the capital markets from current levels . On the global front, Asian markets closed lower with the Shanghai and Hang Seng falling 1.34 per cent and 0.8 per cent, respectively while European markets were trading marginally lower (at 16 hours IST).
On the home turf, IT majors TCS and Infosys fell over 1.5 per cent after the Nasdaq-listed Cognizant reduced CY14 dollar revenue guidance from 16.5 per cent to 14 per cent. Barclays says while the overall demand environment remains positive but client-specific challenges may put a spanner in the works.
Commercial vehicle maker Tata Motors declined over a percent despite its subsidiary Jaguar Land Rover reported a 10 percent year-on-year growth in July auto sales at 5,074 units. Among others, metal stocks like Sesa Sterlite and Hindalco Industries slipped over a percent while shares of ONGC, Mahindra and Mahindra, HDFC Bank, Tata Steel, Reliance Industries, Coal India and Maruti Suzuki gained 0.3-1 per cent.
India's largest lender State Bank of India rose 0.4 per cent ahead of announcement of April-June quarter earnings on Friday. Analysts expect profit after tax to fall 13 per cent year-on-year to Rs 2,824 crore during the quarter while asset quality will be closely watched.
JSPL was the top gainer in Nifty, up 3 per cent after its operating profit margin expanded by 400 basis points year-on-year to 32.7 per cent in June quarter primarily driven by higher steel inventory liquidation. In the broader space, Bharti Infratel tanked 6.6 per cent as its offer for sale issue was opened for subscription today (for one day).
Promoter Bharti Airtel, which holds 79.36 per cent stake in the company, proposed to sell 8.5 crore equity shares through this issue. Texmaco Rail and Kalindee Rail gained 5 per cent each after the Cabinet cleared the proposal to allow 100 per cent FDI in railway infrastructure. On the earnings front, Jubilant Foodworks plunged 4 per cent after lower than expected Q1 earnings.
Net profit fell 18.5 per cent year-on-year to Rs 27.7 crore impacted by weak operational performance and operating profit margin dropped 440 basis points to 12.4 per cent while same-store-sales (SSS) growth contracted at 2.4 per cent in Q1FY15 compared to 6.3 per cent growth in same quarter last year.
India Cements climbed over 2 per cent on improvement in June quarter earnings on sequential basis. Operating profit margin dropped 260 basis points year-on-year to 13 per cent in the quarter gone by but that improved by 360 bps sequentially from 10.6 per cent in Q4FY14. Declining shares outnumbered advancing ones by a ratio of 1613 to 1330 on the Bombay Stock Exchange.
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