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Sensex, Nifty see muted start; HCL Tech, HDFC Bank drop post Q3 numbers

17 Jan , 2022   By : monika singh


Sensex, Nifty see muted start; HCL Tech, HDFC Bank drop post Q3 numbers

NEW DELHI: The benchmark indices opened on a muted note on Monday as buying in heavyweights such as Infosys, Reliance Industries and select banks was offset by selling in HCL Technologies, HDFC Bank and a few FMCG stocks.

Asian markets were largely mixed after North Korea's fresh missile launch and Chinese GDP data released earlier in the day. Back home, all eyes were on earnings season. While shares of UltraTech Cement dropped 1.51 per cent to Rs 7,539.35 ahead of its December quarter numbers, Q3 numbers dragged shares of HDFC Bank and HCL Technologies, which declined up to 6 per cent in early trade.


"In the short-term, the market is likely to react to results. If earnings turn out to be good, that will be confirmation of the profit upcycle that bulls are optimistic about," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

At 9.30 am, the BSE Sensex was trading 14 points or 0.02 per cent lower at 61,208.20. The NSE Nifty was trading almost flat at 18,255.20. "We do not expect a runaway move this week as almost every sector has started chipping in turn by turn. For the day, the 18,200 followed by 18,100 should be considered as key support levels while the sacrosanct base remains at 18,000," said Sameet Chavan of Angel One.
HCL Tech was a key drag on the index. Morgan Stanley said the Q3 revenue performance was dampened by a lack of positive revision in the outlook. Weak margins in the services segment are driving limited EPS upgrades, it said while keeping a target of Rs 1,450 on the stock.

UltraTech Cement declined 1.6 per cent to Rs 7,532. UltraTech Cement is likely to report an 11.3 per cent year-on-year (YoY) drop in consolidated profit after tax (PAT) at Rs 1,405 crore, as per ET NOW poll of analysts. This would be against the Rs 1,584 crore profit the cement maker reported in the corresponding quarter last year.
Dr Reddy's Labs, Axis Bank, Sun Pharma, Asian Paints and Tech Mahindra declined up to 1 per cent.

In the case of HDFC Bank, while December quarter profit came in line with Street expectations, growth in net interest income (NII) slightly missed estimates. In addition, while the bank saw strong loan growth across segments, there was no visible improvement in the overall loan mix, resulting in an unchanged core margin at 4.1 per cent. Price targets of the stock post results, however, stayed mostly unchanged, suggesting a potential 30 per cent upside from here on.

Meanwhile, Maruti Suzuki rose 2.98 per cent to Rs 8,323. SBI, M&M, ICICI Bank and Bharti Airtel advanced up to 1.6 per cent.


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