Stock Market: Bond yield spike downs bourses; pharma shines in sectoral shift

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By S Jha

New Delhi, August 3: The aftereffects of the rating downgrade by Fitch of the US currency continued to jolt the equity markets, as indices dived again to extended the retracement from the recent record high of the bourses. While the broader market bled under the weight of the all round rout, 10 years bond yields spiked to 10 year high, which was expected on the back of the derating decision by the Fitch.

The government unveiled proposal to make imports of computers, laptops and mobile phones costlier by levying higher import duties. The move had an electrifying impact on the electronics manufacturer Dixon Technology as the scrip rallied almost seven per cent. It has already reported its quarterly result. Amid the localisation of the electronics and semiconductor manufacturing, spotlight has come on Dixon Technology.

The day belonged to the pharmaceutical sector in a clear confirmation of the sectoral shift for the investors. Pune-based FDC rallied almost nine per cent. Sun Pharma, which came out with its quarterly result in the post-market hour, led the show after the bell rang in the company of Divi’s Laboratory. The likes of Lupin, Laurus Lab, Shilpa Medicare made sharp gains on Thursday. Aurobindo Pharma also led from the front gaining almost six per cent in the day.

It may be noted that The Raisina Hills had last week alerted the readers of the fund managers making claims that the pharma is the next IT sector amid healthy revenue growth in the offshore market. Adani Group companies were also buzzing on Thursday, as the likes of Ambuja Cement and ACC made strong gains. It may be noted that the Cement sector firms have been trading firm in the weak broader market.

While Nifty had dived by over 220 points during the day, another episode of recover in the late hour was seen as the index recovered almost 100 points, which suggest that the investors are buying into the markets on the dips. Bank Nifty too recovered almost 200 points from the day’s low. The State Bank of India cracked ahead of the quarterly earning. It is the only heavyweight constituent of the Bank Nifty which is yet to announce the quarterly result.

Vedanta, Godrej Properties, LIC Housing were among the top losers on Thursday. The metal stocks bore the brunt of the weak market. Nifty has almost retraced 600 points from the recent high, which Bank Nifty may be entering the oversold zone after losing heavily in the last few sessions.