Broader market registers steep losses

Shares ended the volatile session with steep losses as mixed global cues spoiled investors sentiment. The barometer index, the S&P BSE Sensex, fell 217.86 points or 0.60% to 36,323.77, as per the provisional closing data. The Nifty 50 index fell 82.05 points or 0.74% to 10,936.85, as per the provisional closing data.

On the macro front, the annual rate of inflation, based on monthly WPI, stood at 5.77% (provisional) for the month of June 2018 (over June 2017) as compared to 4.43% (provisional) for the previous month and 0.90% during the corresponding month of the previous year. Build up inflation rate in the financial year so far was 2.49% compared to a build up rate of -0.44% in the corresponding period of the previous year.

Overseas, most stocks in Europe and Asia declined after mixed economic data out of China spurred selling. Market in Japan was shut for a holiday on Monday. Meanwhile, China on Monday posted second-quarter GDP growth of 6.7% from a year ago, slightly lower than 6.8% in the first quarter of 2018.

In US, the Dow on Friday moved above the 25,000 level for the first time in nearly a month while the technology-powered Nasdaq to a record, underlining an uptrend that has been driven by signs of economic strength and solid quarterly earnings.

On the US data front, the cost of import goods fell sharply in June to mark the biggest drop in about a year and a half, though the respite is unlikely to continue once tariffs between the US and other countries go into effect. A read on consumer sentiment fell to a six-month low of 97.1 in July.

Back home, the Nifty provisionally settled below the psychologically important 11,000 mark after falling below that level in intraday trade. Trading was volatile. Indices opened higher and declined as the session progressed. The Sensex rose 117.08 points, or 0.32% at the day's high of 36,658.71 in early trade. The index fell 242.69 points, or 0.66% at the day's low of 36,298.94 in late trade. The Nifty rose 0.6 points, or 0.01% at the day's high of 11,019.50 in early trade. The index fell 92.65 points, or 0.84% at the day's low of 10,926.25 in late trade.

Broader market witnessed a steep decline. Among secondary barometers, the BSE Mid-Cap index provisionally fell 2.45%. The BSE Small-Cap index provisionally fell 2.51%. Both these indices underperformed the Sensex.

The market breadth, indicating the overall health of the market, was weak. On BSE, 562 shares rose and 2055 shares fell. A total of 160 shares were unchanged.

Tata Steel (down 7.01%), Sun Pharmaceutical Industries (down 4.86%), Tata Motors (down 4.62%), Bharti Airtel (down 3.37%) and ICICI Bank (down 3.21%), were the major Sensex losers.

NTPC (up 2.03%), Yes Bank (up 1.13%), HDFC (up 0.84%), Wipro (up 0.73%) and ITC (up 0.35%), were the major Sensex gainers.

FMCG major Hindustan Unilever (HUL) rose 1.20%. The company will announce Q1 June 2018 earnings today, 16 July 2018.

IT major Infosys rose 2.02%. On a consolidated basis, Infosys' net profit declined 2.1% to Rs 3612 crore on 5.8% rise in revenues to Rs 19128 crore in Q1 June 2018 over Q4 March 2018. Financial year ending March 2019 revenue guidance in constant currency was retained at 6%-8%, while operating margin guidance was retained at 22%-24%. The result was announced after market hours on Friday, 13 July 2018.

Infosys board of directors also considered, approved and recommended a bonus issue of one equity share for every equity share held and a stock dividend of one American Depositary Share (ADS) for every ADS held, as on a record date to be determined.

Dr Reddy's Laboratories fell 10.03%. A US District Court reportedly granted a preliminary injunction against sale of the generic version of Suboxone used for treating opioid dependence. The court has prevented Dr Reddy's from re-launching its generic product until the patent litigation by Indivior is concluded or until it prevails on an appeal of this injunction, media reports added.

Dr Reddy's Laboratories announced on Saturday, 14 July 2018, its intent to appeal the decision made by the US District Court for the District of New Jersey in a preliminary injunction hearing with respect to further sales and commercialization of Dr. Reddy's Buprenorphine and Naloxone Sublingual Film within the United States. The company disagrees with the court's decision, and will vigorously appeal it.

Dr. Reddy's had announced the receipt of the approval, on June 15, 2018 by one of its wholly owned subsidiaries, from the US Food and Drug Administration (USFDA) for its Buprenorphine and Naloxone Sublingual Film, 2 mg/0.5 mg, 4 mg/1 mg, 8 mg/2 mg, and 12 mg/3 mg, therapeutic equivalent generic version of Suboxone (buprenorphine and naloxone) sublingual film, in the United States market.

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