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Dull Start to the Week; Pharma & Metal Stocks Fall
Tue, 2 May Closing

Indian share markets failed to maintain the 30,000-level and finished flat due to selling in healthcare stocks, capital goods stocks, metal stocks, and power stocks despite firm global cues.

At the closing bell, the BSE Sensex closed higher by 3 points, while the NSE Nifty finished up 10 points. Meanwhile, the S&P BSE Mid Cap and the S&P BSE Small Cap finished up by 0.4% and 0.3% respectively.

Infosys will reportedly hire about 10,000 locals in the US over the next two years and set up four technology and innovation hubs there, as part of its efforts to tide over visa-related issues.

As per an article in Times of India, Infosys will also focus on enhancing its play in new technology areas like artificial intelligence (AI), machine learning, user experience, cloud computing, and big data through these new hires and centers.

Over the past few weeks, there has been a growing sentiment of protectionism across various markets, including the US, that are seeking to safeguard jobs for locals and raising the bar for foreign workers.

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Software stocks finished the day on a positive note with Oracle Financial Servies Ltd and Mphasis Ltd leading the gains.

Asian stock markets broadly rose with strong earnings from technology companies in the U.S. overnight. The Nikkei 225 gained 0.70% and the Hang Seng rose 0.33%. The Shanghai Composite lost 0.35%. European markets are higher today with shares in London leading the region. The FTSE 100 is up 0.54% while France's CAC 40 is up 0.34% and Germany's DAX is up 0.13%.

China Way Ahead of All Emerging Markets

As per an article in Livemint, apart from China and India, the rest of the emerging economies have not done very well.

Over the last two decades, China's share of world output went up from 6.3% to 17.8%. On the other hand, the share of emerging markets to world output has improved from 42.3% in 1996 to 58.1% in 2016.

This means over the last twenty years China has accounted for 11.5 percentage points out of 15.8 percentage points increase in the share of developing economies. India's share grew from 3.9% to 7.2% of world GDP over the last twenty years. That's just a 3.3 percentage point increase.

The rupee was trading at Rs 64.21 against the US$ in the afternoon session. Oil prices were trading at US$ 48.77 at the time of writing.

Coal India has reported provisional production of 38.44 million tonnes (MT) in April 2017, as against a target of 43.58 MT. The company's total off-take for the month of April stood at 45.29 MT, as against a target of 49.51 MT.

Coal India, which produces 84% of the country's coal production, had exceeded the target for March 2017 by producing 66.07 million tonnes.

Meanwhile, as per an article in The Economic Times, the government is nudging Coal India to expedite export of coal to neighboring countries, including Bhutan, as India has surplus coal. According to coal secretary, Coal India is capable of producing more coal than the actual demand asserting that Coal India can export all the surplus coal.

Coal India share price finished down by 0.6% on the BSE.

Moving on to news from energy stocks. Indian oil corporation share price finished on an encouraging note (up 0.5%) after it was reported that the company is planning to set up Rs 6 billion plant to produce second generation ethanol in Haryana.

The plant will use plant waste, stubble, husk and straw to produce 100 kilo liters of ethanol every day. The state government has agreed to provide land either on nominal lease or free of cost. Billed to be the largest such plant in the country, it is expected to generate hundreds of jobs.

The plant which would help reduce stubble burning drastically is likely to be commissioned in the next two years. The empowered committee has agreed to provide all possible incentives for setting up the plant.

Meanwhile, as per a leading financial daily, GAIL (India) has been awarded Contracts for Pipeline Laying works of the Kochi - Koottanad - Mangaluru Pipeline for another 131 km section from Areacode (Malappuram) to Kurumathoor (Kannur) at a cost of approximately Rs 2 billion. GAIL continues to carry forward the momentum for Natural Gas Pipeline works in Kerala.

GAIL share price finished the day up by 1.5% on the BSE.

In news from pharma sector, Lupin share price hit a fresh 52-week low (down 2.5%) in today's trade as the US Food and Drug Administration (USFDA) issued a form 483 to Lupin Ltd's Goa facility.

The USFDA cited three observations related to violation of good manufacturing practices following an inspection of the site between 27 March and 7 April this year. The US drug regulator observed that the company failed to review and investigate unexplained discrepancy and out of specification components of a product batch at the facility.

The Goa facility is an important unit for the company as its accounts for 30-40% of US sales. In the quarter ending in December 2016, Lupin's US sales grew 53.4% to US$ 316 million.

In news from automobile sector, Maruti Suzuki share price surged 2.8% after the company posted the best domestic monthly sales in April, selling 144,492 units and registering a 23.4% growth over 117,045 units of April 2016.

Meanwhile, Ashok Leyland share price plunged 2.2% after the company reported a fall of 30% in April 2017 sales to 7,083 units, as against 10,182 units sold in the same period of last year. The company has experienced a drop of 43% in its medium and heavy commercial vehicle (M&HCV) products segment to 4,525 units in April 2017, as compared to 7,873 units in April 2016. Light commercial vehicle (LCV) segment of the company registered sales of 2,558 units in April 2017 as against 2,309 units in April 2015.

And here's a note from Profit Hunter:

ONGC is among the top gainers on the Nifty 50 Index today - up 3%. The stock is also forming an interesting pattern on the chart. Let's have a look.

ONGC Forming Cup and Handle Pattern
 Cutting Losses Short in Bosch

The stock topped out in June 2016 at Rs 314 and traded in a downtrend for one and a half years. The downtrend halted at Rs 125 in February 2016 with the broader market index. The stock then gradually trended up in a rounding formation and hit a 52-week high of Rs 210 in December 2016. It then corrected for a while to Rs 180.

It seems that the stock is forming a cup and handle pattern on the daily chart.

The stock has rallied more than 7% in the last two sessions with good volumes. The 197-200 level is the breakout level from the cup and handle pattern.

Whether the stock breaks out of this pattern to continue its uptrend or finds resistance from the handle's resistance line remains to be seen.

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Feb 23, 2018 (Close)