Mid Session Commentary

Cement stocks fall
(20-Mar-2017, 12:21 Hours IST)  

Key benchmark indices continued to remain subdued in early afternoon trade. At 12:30 IST, the barometer index, the S&P BSE Sensex, was down 142.61 points or 0.48% at 29,506.38. The Nifty 50 index was down 35.20 points or 0.38% at 9,124.85. Weakness in most Asian stocks dampened sentiment on the domestic bourses.

The BSE Mid-Cap index was up 0.18%. The BSE Small-Cap index was up 0.27%. Both these indices outperformed the Sensex.

The market breadth, indicating the overall health of the market, was negative. On the BSE, 1,301 shares declined and 1,231 shares rose. A total of 169 shares were unchanged.

ITC lost 0.68% to Rs 279.30, with the stock sliding on profit booking after recent gains. Shares of ITC had risen 6.81% in the preceding four trading sessions to settle at Rs 281.20 on 17 March 2017 from its closing of Rs 263.25 on 10 March 2017.

Frontline IT stocks declined as the rupee continued its recent appreciation against the dollar. TCS (down 1.52%), Infosys (down 1.9%), Wipro (down 1.14%) fell. HCL Technologies (up 0.1%), Oracle Financial Services Software (up 0.59%), Tech Mahindra (up 0.78%), MindTree (up 1.09%), Hexaware Technologies (up 0.29%) and MphasiS (up 0.02%) rose.

The partially convertible rupee was hovering at 65.38 versus Friday's close of 65.475. A firm rupee adversely affects operating profit margins of IT firms as the sector derives a lion's share of revenue from exports.

Meanwhile, media reports suggested that Cognizant may cut at least 6,000 jobs, which represents 2.3% of its total workforce, as it struggles with growth in an IT environment that is fast shifting towards new digital services. The layoffs are likely to be more this year than the routine annual exercise.

Cement stocks fell. Ambuja Cements (down 0.3%), UltraTech Cement (down 0.61%) and Shree Cement (down 1.96%) declined. ACC (up 0.3%) rose.

Grasim Industries was up 2%. Grasim has exposure to the cement sector through its holding in UltraTech Cement.

Smartlink Network Systems surged 12.68% after the company said its board approved the final application to RBI for categorizing the company as a non-banking financial company. The announcement was made after market hours on Friday, 17 March 2017.

Smartlink Network Systems' board approved the final application for categorizing the company as a non-banking financial company (NBFC) to be made to the Reserve Bank of India (RBI). The company's business currently consists mainly of income from investments activities pursuant to transfer of Digisol brand business to Digisol Systems and manufacturing business to Synegra EMS (wholly owned subsidiaries of the company) respectively.

The board also approved the acquisition of 1 crore equity shares aggregating upto Rs 10 crore issued by Digisol Systems, a wholly owned subsidiary of the company, in one or more tranches.

Overseas, most Asian stocks were trading lower with markets in Japan shut for a holiday and investors watching oilfield-related shares after a bankruptcy filing by Singapore's Ezra Holdings at the weekend. Japanese Prime Minister Shinzo Abe reportedly said on Sunday, 19 March 2017 in Germany that the European Union and Japan should soon reach an economic deal, and stressed the importance of free trade to his country.

US stocks edged lower on Friday, 17 March 2017 with investors awaiting further catalysts before jumping back into the market. In the latest economic data, industrial production was flat in February. Separately, the index of consumer sentiment rose to 97.6 in March from 96.3 in February, based on a preliminary reading by the University Michigan.

Finance ministers from twenty of the world's biggest economies held a two-day meeting, and warned against competitive devaluations and disorderly foreign exchange markets but failed to agree on keeping global trade free and open.

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