Sensex, Nifty continue to struggle; Cipla, M&M laggards

Moneycontrol Bureau

1:50 pm FII view: Abhay Laijawala, Deutsche Equities said while the brokerage remained constructive on market outlook & are maintaining our December 2015 Sensex target of 33,000, it does believe that both the economy & stock market are now urgently looking for critical offsets to balance the continued absence of private sector investment.

With the private sector still on sidelines, rural consumption deteriorating & export growth looking anemic, public investment has emerged as the most critical driver for economic revival, until private sector has recovered, he added.

According to him, a strategic thrust on public investment can be one of the strongest offsets the government can consciously provide India Inc to tide over this period of transition.

1:30 pm Results: Hindustan Petroleum Corporation (HPCL) is likely to report a profit of Rs 1,479.4 crore in March quarter, down 67.9 percent compared to Rs 4,609.2 crore in the year-ago period, according to a CNBC-TV18 poll. The company will announce its earnings on May 28. Analysts feel the sequential improvement may be much better. In Q3FY15, the state-run oil retailer had reported a loss of Rs 325.4 crore on revenue of Rs 51,045 crore.

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The market is still under pressure as the Sensex is down 183.57 points or 0.7 percent at 27381.09. The Nifty is down 58.50 points or 0.7 percent at 8276.10. About 1033 shares have advanced, 1327 shares declined, and 162 shares are unchanged.

Cipla, M&M, Tata Power, HDFC and Dr Reddy's Labs are major laggards while Tata Motors, Vedanta, Infosys, GAIL and ITC are top gainers in the Sensex.

Meanwhile, bankers say the Reserve Bank of India should take steps to boost liquidity in addition to delivering a widely expected interest rate cut next week if it hopes to see lower lending rates and a pick-up in credit growth.

Lenders' failure to fully pass on the RBI's two interest rate cuts this year has been a major frustration for policy makers. Commercial banks blame the central bank's tight grip on liquidity for keeping the cost of funds high, a claim Governor Raghuram Rajan dismissed as "nonsense" at the April policy review.