Sensex, Nifty end flat; bank, oil & pharma stocks drag

3:30 pm Market close: The market ended flat with oil & gas stocks dragging major indices. The Sensex was up 40.95 points at 29135.88 and the Nifty was up 3.85 points at 8809.35. About 1336 shares advanced, 1584 shares declined and 195 shares were unchanged.

ITC gained 3 percent while TCS, Bharti, HUL and HDFC were top gainers in the Sensex. Among the losers were Sun Pharma, ICICI Bank, Hindalco, Hero and Axis Bank.

3:10 pm PSU capitalisation: PSU banks will have to raise funds from the capital market to meet capital requirement norms in absence of adequate financial support from the government in the forthcoming Budget, rating agency Moody's said today. For the current fiscal, the government has earmarked Rs 11,200 crore for capital infusion in state-owned banks. Of that the government has said it will soon infuse Rs 6,990 crore in nine banks including SBI, Bank of Baroda (BoB) and Punjab National Bank (PNB).

"Unless the government materially increases the capital allocation to state-owned banks in the next budget, the only way these banks can improve their capital ratios is by accessing equity capital markets," Moody's Investors Service said. The government in the current fiscal has adopted new criteria in which the banks which are more efficient would be rewarded with extra capital so that they can further strengthen their position. The capital infusion has been decided based on the performance of the bank.

3:00 pm Fund raising: Private sector lender Yes Bank today said it will be raising Rs 500 crore through issuance of "green infrastructure bonds", which will be deployed to fund renewable energy and energy efficiency projects.

The bank claimed it is the first such issue in the country and the money will be used to fund solar power, wind power, biomass, and small hydel projects. The bond will have a tenor of ten years, it said in a statement, adding the issue has already been launched.

The city-headquartered lender said it had made a commitment to fund 5,000 MW of renewable energy projects during the recent summit organised by the Government and added the proceeds from the issue will be used to fund the same.

2:30 pm New patent: Pharmaceutical firm Suven Life Sciences has been granted one patent each by Australia, Canada, Japan and New Zealand for its drug used in treatment of neurodegenerative diseases. "Secured patents in Australia, Canada, Japan and New Zealand to one of their New Chemical Entity (NCE) for CNS therapy through new mechanism of action H3 Inverse agonist," the company said in a BSE filing. These patents are valid until 2030, it added.

Neurodegenerative diseases include Alzheimer's disease, Schizophrenia and Parkinson's disease. The granted claims of the patent include the class of selective H3 ligands discovered by Suven and are useful in treatment of cognitive impairment associated with neurodegenerative disorders, the statement said.

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The Sensex is up 128.85 points at 29223.78 and the Nifty is up 31.55 points at 8837.05. About 1287 shares have advanced, 1477 shares declined and 212 shares are unchanged.

M&M, ITC, HDFC, Bharti Airtel and TCS are top gainers in the Sensex. Among the losers are Sun Pharma, Hero, Reliance, ICICI Bank and Axis Bank.

Oil stocks are down as Finance Minister Arun Jaitley may look at re-imposing 5 percent customs duty on crude oil imports to shore up revenues by USD 3 billion and create a level-playing field for domestic producers.

Presently, the government does not levy any import or customs duty on crude oil imports. On the other hand, domestically produced crude oil attracts two percent central sales tax, something which imported oil is exempted from.

Gold extended gains to a third session, bolstered by safe-haven bids amid a softer dollar and jitters ahead of negotiations regarding Greece's future in the euro zone.

Traders were eyeing a meeting of euro zone finance ministers in Brussels later on Monday to find common ground with Greece's new government, elected on a pledge to scrap the austerity strictures of Greece's international bailouts.

If the meeting produces no results, there is a concern that Greece will be headed for a credit crunch that would force it out of the euro zone.

Nifty races towards 8650, Sensex up over 200 pts; L&T gains

1:30 pm Buzzing: Shares of JP Associates fell over 3 percent intraday after its losses further widened in December quarter. Its net loss widened to Rs 116.09 crore for the quarter ended December 31, 2014. The total income from operations during the quarter came down to Rs 2,583.35 crore, from over Rs 3,163.64 crore in the same quarter of the previous financial year.

Morgan Stanley says collapse in the real estate division led to weakness in revenue and margins. The EBIT margin fell 670 basis points Y-o-Y to 22.9 percent for the quarter, the lowest level in the last seven quarters.

Given the pain across divisions, the company reported its worst quarterly EBIDTA margins in a decade at 16.3 percent (down 720 bps Y-o-Y) in Q3 FY15, resulting in a decrease of 43 percent Y-o-Y in EBITDA.

Macquarie maintains underperform rating on the stock with a target of Rs 27.30. Despite recent steps by the company on de-leveraging, Macquarie believes much more needs to be achieved for the company to have a comfortable balance sheet position.

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Buying interest seems to continue in the market with Sensex gaining 227.34 points at 28582.96. The Nifty is up 73.10 points at 8638.65. About 1501 shares have advanced, 1011 shares declined, and 208 shares are unchanged.

L&T, ICICI Bank, Maruti, Axis Bank and NTPC are top gainers in the Sensex. Among the losers are ONGC, BHEL, Bharti Airtel, M&M and Tata Motors.

Gold inched up as the dollar took a breather after recent sharp gains and as caution prevailed in financial markets regarding Greece's future in the euro zone. The uncertainty over Greece debt issues has somewhat helped gold in recent days, but the metal is still down nearly 4 percent so far this month as a strong dollar and expectations of an interest rate hike in the United States have hurt the metal. Economic and financial uncertainties tend to boost demand for gold, seen as a safe-haven investment. 

Sensex, Nifty flat; Axis Bank dips again, Crompton tanks 6%

The market remained listless in morning trade. The Sensex rose 21.32 points to 29021.46 and the Nifty advanced 5.85 points to 8762.40. The broader markets too are flat in trade.

About 1083 shares have advanced, 808 shares declined, and 200 shares are unchanged on the Bombay Stock Exchange.

State-run oil & gas explorer ONGC rallied nearly 3 percent as government moves to iron-out the subsidy sharing formula and fast-track ONGC divestment. Oil ministry asked government not to impose any subsidy burden on upstream companies if crude prices stay at or less than USD 60 a barrel.

Sun Pharma climbed over 2 percent followed by HDFC, Infosys, Bharti Airtel, Sesa Sterlite, Tata Steel and GAIL with more than 1 percent gain.

However, Axis Bank fell another 3 percent after lossing 5 percent in previous session. Its rivals ICICI Bank and State Bank of India lost further, down 1-1.6 percent. TCS declined 1 percent.

Hero Motocorp shed more than a percent on earnings miss. Revenue in Q3 fell 0.5 percent with margins contracting 100 basis points to 12 percent on higher promotion/branding costs. Goldman Sachs cut FY15-18 EPS by 5-14 percent and target price lowered to Rs 2529.

Crompton Greaves tanked 6 percent on disappointing results, both standalone and consolidated results show year-on-year pressure on the topline and there was continued weakness in subsidiaries. JP Morgan cut FY16/17e earnings by around 11 percent and lowered target price to Rs 195 from Rs 215.

Sensex, Nifty under pressure; Reliance, ONGC, Bharti up

1:55 pm SEBI: Capital markets regulator Sebi has sought clarification from the merchant banker of State Bank of Travancore on the firm's proposed Rs 485-crore rights issue. Without disclosing the details, Sebi said "clarifications (are) awaited from lead manager" for the proposed rights issue. In rights issue, shares are issued to existing investors based on their holdings at a pre-determined price and ratio.

According to the latest weekly update to the processing status of draft offer documents filed with Sebi, the regulator said clarifications are awaited on the proposed rights issue of State Bank of Travancore as on January 30 this year. The status is updated on a weekly basis by the regulator and the next update of the status, as on February 6, would be uploaded on Sebi's website the next working day. Sebi said it might issue observations on State Bank of Travancore document within 30 days from the date of receipt of satisfactory reply from the lead merchant bankers to the clarification or additional information sought from them.

1:40 pm Market outlook: The government needs to move faster on the divestment process, as institutional investors are concerned about the government’s approach to the fiscal deficit, feels Gautam Trivedi, MD & CEO, Religare Capital. In an interview, Trivedi says market is having high expectations from the Railway Budget as well as Union Budget. On the positive side, he says foreign investor interest remains strong even as domestic institutions have been booking profits. He expects corporate earnings to grow 10-15 percent this year. Trivedi is cautious on banks, particularly state-owned banks, as he feels the fourth quarter numbers could be even worse than the third quarter ones. HDFC Bank is his top pick in the banking space.

1:30 pm Result: NHPC disappointed street on Tuesday by reporting a 30.6 percent decline (year-on-year) in profit at Rs 180 crore due to higher interest cost.

Profit was expected at Rs 300 crore on revenue of Rs 1,378 crore for the quarter, according to the average of estimates of analysts.

Net sales of the state-run hydro power generation company grew 3.9 percent to Rs 1,167 crore during October-December quarter from Rs 1,123.4 crore in same quarter last fiscal.

Operating profit declined 10.1 percent on yearly basis to Rs 561 crore and margin slipped 740 basis points to 48.1 percent in the quarter gone by. Analysts had expected operating profit at Rs 757 crore and margin at 54.9 percent for the quarter.

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The market continues to be under pressure. The Sensex is down 173.79 points or 0.6 percent at 28948.48, and the Nifty is down 54.40 points or 0.6 percent at 8743.00. About 1156 shares have advanced, 1450 shares declined, and 259 shares are unchanged.

Sesa Sterlite, Reliance, Tata Motors, ONGC and Bharti are top gainers in the Sensex. Among the losers are Axis Bank, Bajaj Auto, M&M, HDFC and SBI.

Signalling strong demand for government bonds, overseas investors have put in bids worth Rs 813 crore, oversubscribing a Rs 310 crore auction for debt securities by more than two times.

The auction was held at 'nse-ebid' platform for allocation of investment limits in government debt securities worth Rs 310 crore (USD 50.2 million). The auction attracted bids for Rs 813 crore (USD 131.64 million), as per the bourse.

At the end of two-hour auction last evening, as many as 43 bids were made in the auction, of which 21 were declared successful. The debt auction quotas give overseas investors the right to invest in debt up to the limit purchased.

Foreign investors have so far put in over Rs 23,000 crore in the debt market in 2015. The equity market has also seen similar trends with overseas fund inflows of more than Rs 18,244 crore since the beginning of the year. 

Nifty ends below 8800; Axis up 5%, ITC & HUL fall 2%

03:30pm Market close

The market succumbed to profit booking pressures as the Nifty could not retain holding above the 8800-level. The 50-share index was down 11.50 points at 8797.40 while the Sensex slipped 60.68 points at 29122.27. About 1618 shares have advanced, 1298 shares declined, and 256 shares are unchanged.

Axis Bank gained over 5 percent, while Hindalco was 4 percent. Among the gainers were Wipro, L&T and GAIL. Bharti Airtel lost over 3 percent, Dr Reddy's Labs, HUL, ICICI and ITC were other laggards.

03:00pm Cut in sugare prices

Sugar prices eased by Rs 10 per quintal at the wholesale sugar market in the national capital today due to huge stocks position following ample supplies from mills against on subdued demand. Marketmen said besides falling demand from bulk consumers despite ongoing wedding season, mounting stocks in the market following persistent supplies from mills mainly put pressure on sweetener prices. Sugar ready M-30 and S-30 prices were lower by Rs 10 each to Rs 2,780-3,010 and Rs 2,770-2,990 per quintal.

02:50pm Will RBI cut repo rate tomorrow?

The Reserve Bank of India will announce its credit policy on February 3 after governor Raghuram Rajan surprised the street with an out of turn repo rate cut of 25 bps on January 15, 2015 on the premise that inflation number has come down and would remain largely range bound in the next few months.

Against this backdrop, is there a scope of further rate cut tomorrow?

A 55 percent respondents expect the RBI to announce three more rate cuts in 2015 taking repo to 7 percent by the end of the year; 35 percent expect only two more cuts this year while 10 percent see only one more cut coming their way.

A majority also said the RBI will lower its CPI forecast for March to under 6 percent while 35 percent expect RBI to keep March CPI forecast unchanged at 6 percent; only 20 percent see RBI cutting it to below 5.5 percent.

02:30pm Payment bank licence

Telecom investor Aditya Birla Nuvo and retailer Future Group were among the first big names to apply for licenses to run so-called payments banks, under rules meant to put basic banking within the reach of hundreds of millions.

Monday is the deadline for applications to run payments banks - which cannot lend - but also for permits to run small finance banks.

Indian authorities, including the RBI which will award the licenses, hope the permits will further financial inclusion, in a country where nearly half the population does not have access to formal banking.

Aditya Birla Nuvo, which is the biggest shareholder in India's third-biggest cellular carrier Idea Cellular Ltd , said it plans to own 51 percent of the payments bank, while Idea will own the remainder. Idea can later raise its holding to 60 percent.

Future Group, one of India's biggest retailers, also said it had applied on Monday for a payments bank permit.

Top Indian telecommunications carrier Bharti Airtel Ltd has said it would apply, reports Reuters.

02:00pm Market Check

The market remained volatile with a negative bias in afternoon trade while midcaps outperformed. The Sensex fell 107.51 points to 29075.44 and the Nifty declined 26.05 points to 8782.85.

However, the BSE Midcap Index gained 0.5 percent and Smallcap climbed 1 percent. About 1555 shares have advanced, 1231 shares declined, and 246 shares are unchanged on the BSE.

Ajay Argal of Barings Asset Management says he remains positive on Indian equities at current levels. Market is not very expensive from a 3-4 years time horizon, he adds.

Shares of ICICI Bank, ITC, HUL, Bharti Airtel and Dr Reddy's Labs slipped 2-4 percent whereas Axis Bank, L&T, Wipro and Hindalco gained 2-4 percent.

Auto sales for January showed weakness for 2-wheeler sector. Bajaj Auto reported a 9 percent drop in January auto sales while TVS Motor posted just a 1.1 percent Y-o-Y growth in sales. On the other hand, Maruti recorded a 14 percent jump in total sales led by the near doubling in export sales. Eicher Motors too gained post a 25 percent rise in total sales.

HCL Technologies added another 5 percent to Friday's rally as brokerages appeared bullish on the stock. CLSA raised target price to Rs 2,200 and expects to see continued earnings surprises & re-rating potential. Citi too raised the target to Rs 2,175 on their sole 'buy ' call in the Indian IT services space.

Sun Pharma and Ranbaxy traded at all-time highs. The US Federal Trade Commission has given a conditional nod to the USD 4 billion merger based on divestment of anti-bacterial drug. The merger now just needs approval from Punjab and Haryana High Court which will be hearing on the merger today.

In macro data, HSBC manufacturing PMI indicated the economy is expanding but at a slower pace with the figure slowing to a 3-month low of 52.9 in January 2015 against 54.5 in December 2014.