Sensex falls 156 points on Friday to end near 5-month low; Smallcaps and Pharma stocks sink

Benchmark indices ended lower for fifth straight trading sessions dragged down by selling pressure in pharma shares while weak global cues also dampened investor sentiment. Further, consistent selling by foreign portfolio investors along with growing uncertainty over Hillary Clinton’s victory in the US Presidential election also weighed on market sentiment.
The S&P BSE Sensex ended down 156 points to settle at 27,274 and the Nifty50 settled 51 points lower at 8,434. Sensex touched its lowest level since July 8, 2016 in intra-day trade whereas the Nifty dropped to its lowest level since July 11, 2016.
The broader markets underperformed the benchmark indices significantly- BSE Midcap and Smallcap indices fell between 1%-2.5%. Market breadth on the BSE ended lower with 200 declines and 500 advances.
Meanwhile, the Goods and Services Tax (GST) Council on Thursday decided upon a four-slab tax structure of 5%, 12%, 18% and 28%, with lower rates for essential items and the highest for luxury and de-merits goods, many of which would also attract an additional cess.
Shares of L&T ended lower by 3% on the National Stock Exchange (NSE) after huge block deals were executed in the counter. According to Business Standard report, the government plans to offload up to 3% stake in L&T held under Specified Undertaking of the Unit Trust of India (Suuti) through a block deal on Friday, said investment banking sources.

Shares of pharmaceutical companies were under pressure with the Nifty Pharma index recorded its sharpest intra-day fall in past seven months. According to Bloomberg report, the US prosecutors could file charges by year-end in a criminal investigation of generic makers over suspected price collusion.

Dr. Reddys Laboratories, Sun Pharmaceutical Industries, Glenmark Pharmaceuticals, Cadila Healthcare and Lupin fell between 4%-5% on the NSE. Cipla, GlaxoSmithKline Pharmaceuticals, Divis Laboratories, Piramal Enterprises and Aurobindo Pharma from the Nifty Pharma index were down in the range of 1%-7%. SMS Pharma, Claris Lifesciences, Vimta Labs, Jubilant Life Sciences, Sun Pharma Advanced Research, RPG Life Sciences, Strides Shasun and Aarti Drugs were down 4%-5% on the BSE.

Shares of cigarette makers such as ITC and VST Industries gained upto 4% on BSE after the Goods and Services Tax (GST) Council’s propose to place tobacco products in the 28% tax slab and an additional cess. The current rate of taxation on cigarettes is around 64% and 81% on chewing tobacco.

Here are some picks from the week gone by.
Company: Crompton Greaves CMP: 77.00 Mastermind


Company: BGR Energy CMP: 113.65 Mastermind
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Company: Dishman Pharma CMP: 226.20 Mastermind
Company: Cairn India CMP: 237.50 Mastermind
Company: Arvind Ltd. CMP: 398.65 Mastermind
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