BSE Sensex falls 57 points on F&O expiry, disappointing earnings

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Mumbai | Updated: May 28, 2015 4:48:12 PM

BSE Sensex today slipped by 57 points to close at 27,506.71 points due to across the board selling mainly in pharma, banking and oil stocks.

indian stock marketBSE Sensex today slipped by 57 points to close at 27,506.71 points due to across the board selling mainly in pharma, banking and oil stocks. (Reuters)

The benchmark BSE Sensex today slipped by 57 points to close at 27,506.71 points due to across the board selling mainly in pharma, banking and oil stocks as the monthly derivatives contracts expired today.

Across-the-board selling on the last day of May series derivatives contracts, growing concerns over muted corporate earnings so far and mixed global cues pulled down markets, brokers said.

Participants were seen offloading their long positions in Futures and Options (F&O) segment instead of carrying them forward to the next series for June month, they said.

Market Outlook by Vinod Nair, Head-Fundamental Research, Geojit BNP Paribas Financial Services
Market was volatile during the expiry week. Now expiry is behind us, market should trend in anticipation of RBI’s action next week (2nd June). Future outlook and rate cut will provide immediate support to the market. Global prices of both soft and hard commodities are trending lower, hence inflations trend in the medium-term should be downward. Based to RBI target of 6% CPI by January’16, the current data (4.9%) does provide a room to cut rate. The question is by when and how much – whether a 25bps to 75bps cut over time. Looking at peers like China the rate trend is downward, which has cut 90bps in the last 7months to 5.1% bank rate.

“The F&O expiry and other negative factors including disappointing Q4 earnings by more bluechip companies have been hurting market sentiments,” said a Delhi-based stock broker.

Meanwhile, rating agency Moody’s said that India’s growth rate in the January-March quarter is likely to slip to 7.2 per cent from 7.5 per cent in the previous three months.

The BSE 30-share barometer opened on a firm note and advanced to the day’s high of 27,666.37 following covering-up of short positions and value-buying in bluechip stocks.

Market View by Anand James, Co Head Technical Research Desk, Geojit BNP Paribas
Lower volatility and lower rollover marked May derivatives expiry day. The cautionary note is understandable as several major event risks are lined up for next month, like interest rate announcements by RBI and FOMC  on June 2nd and 17th respectively, as well as the progress of southwest monsoons in India. However these events do not carry as much surprise potential as the Greece debt payment, whose deadlines also fall in June. Rupee, Euro as well as Dollar Index have been quite volatile in the last week, hinting at big moves in currencies as well as equities in the week ahead. Inability to push beyond 8360 in Nifty added to bearish concerns pulling prices back into the 8290-8260 region. This region, which has swung prices today would be keenly watched for signs of fresh bargain hunting.

However, offloading of positions by participants in view of May month expiry pulled it into negative zone to touch a low of 27,354.35. The Sensex finally settled down 57.95 points, or 0.21 per cent at 27,506.71. The gauge had gained 33.25 points in yesterday’s volatile session.

The 50-issue Nifty of NSE continued its slide for the fourth session and lost another 15.60 points to close at 8,319. It touched a low of 8,270.15 in day trade but a flurry of buying at the fag-end trimmed losses.

Market View by Gaurav Jain, Director, Hem Securities
The markets have been reeling under the pressure of Greece woes, derivative contracts expiry, less FIIs investments and weak corporate earnings. Sharp fall in Chinese market added fuelled the negative sentiment. Indian markets continued to remain volatile and directionless under such circumstances.

In Asia, markets finished mostly mixed, while Eruopean markets were down in early trade amid Greek financial woes. Market heavyweights like Cipla plunged 2.58 per cent, Tata Power fell 2.18 per cent, Sun Pharma tumbled 1.94 per cent, M&M declined 1.93 per cent and Bharti Airtel lost 1.76 per cent.

Caution ahead of earnings announcements also dragged down shares of Hindalco by 1.57 per cent.

Other prominent losers were Dr Reddy’s, RIL, SBI, Tata Steel, Hind Unilever, ONGC, HDFC, HDFC Bank, Maruti Suzuki, Axis Bank and Bajaj Auto.

Foreign Portfolio Investors sold shares worth Rs 934.98 crore yesterday, as per provisional data.

In the 30-Sensex constituents, 18 ended lower, 11 closed higher, while Hero and GAIL closed unchanged.

Among gainers, Tata Motors which has been under pressure since the company’s Q4 earnings, regained buying support at lower levels and recovered by 2.52 per cent.

Sectorwise, the BSE Healthcare index suffered the most by losing 1.31 per cent, followed by Banking (0.51 pc), Metal (0.38 pc), Infrastructure (0.20 pc), Realty (0.15 pc) and Capital Goods (0.05 pc).

Selling pressure also dragged down the BSE Smallcap index by 0.16 per cent and Midcap index by 0.53 percent.

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