Sensex, Nifty end flat ahead of F&O expiry; BHEL up 4%

03:30 pm Market close: A day ahead of May F&O expiry, the market has ended on flat note. The Sensex was up 33.25 points at 27564.66 and the Nifty ended down 4.75 points at 8334.60. About 1151 shares advanced, 1460 shares declined, and 180 shares were unchanged.

BHEL closed up 4 percent, followed by ONGC, Coal India, Bharti Airtel and Axis Bank. Tata Motors fell 5 percent while M&M, Sun Pharma, GAIL and Infosys were other losers.

03:10 pm Result: GAIL India missed street expectations on Wednesday with the fourth quarter net profit declining 16 percent sequentially to Rs 510.75 crore, impacted by higher other expenses and loss at petrochemicals division.

Total income from operations slipped 4.7 percent to Rs 14,270.62 crore during January-March quarter compared to Rs 14,969.41 crore in December quarter, said the country's largest gas transmission and marketing company in its filing.

Other expenditure spiked 124.8 percent quarter-on-quarter to Rs 2,553.92 crore while other income jumped 84.8 percent to Rs 259.33 crore in the quarter gone by.

03:00 pm Brokerage view: Barclays remains overweight on Tata Motors but reduced target to Rs 685 per share. It feels slow ramp up of China products and pricing pressures will impact the auto major. Though Q4 was weak, CLSA feels Tata Motors may see recovery ahead. The brokerage maintains buy rating with a target price of Rs 650. It is optimistic that weak JLR margins may normalise in FY16. China margins are a concern but JLR has strong buffers to outgrow Chinese luxury market, it adds.

02:35pm CNX IT to be changed: India Index Services & Products (IISL), an arm of NSE, will bring down the number of stocks on its benchmark index for the IT sector to 10 from May 29, a move that is expected to facilitate trading for investors.

At present, the CNX IT index, which captures the performance of Indian IT companies, has 20 stocks. Infosys, Tata Consultancy Services, HCL Technologies, Tech Mahindra, Wipro, Oracle Financial Services Software, MindTree, Info Edge (India) Ltd, Cyient and Justdial will be the 10 scrips on the index from May 29.

02:00pm Market Check
The market continued to be in consolidation mode. Metals, select technology and auto stocks remained under pressure while banks, capital goods, oil and power stocks gained.

The Sensex declined 21.86 points to 27509.55 and the Nifty slipped 20.15 points to 8319.20. About 1061 shares have advanced, 1431 shares declined, and 160 shares are unchanged on the BSE.

State-run oil explorer ONGC climbed 1.5 percent ahead of earnings on Thursday. A CNBC-TV18 poll expects the company to report a profit of Rs 6,000 crore on revenue of Rs 21,000 crore for March quarter.

ICICI Bank and Axis Bank rallied 1-2 percent followed by HDFC Bank and SBI with 0.7 percent gains. Power equipment maker BHEL gained 1.5 percent post better than expected earnings yesterday.

However, Tata Motors lost 5.4 percent, reacting negatively to its Q4 numbers with a weak operational performance weighed on the stock. Brokerages maintained overweight rating, but cut target price on the stock.

1:45 pm Brokerage view: Barclays remains overweight on Tata Motors but reduced target to Rs 685 per share. It feels slow ramp up of China products and pricing pressures will impact the auto major.

Though Q4 was weak, CLSA feels Tata Motors may see recovery ahead. The brokerage maintains buy rating with a target price of Rs 650. It is optimistic that weak JLR margins may normalise in FY16. China margins are a concern but JLR has strong buffers to outgrow Chinese luxury market, it adds.

1:30 pm Buzzing: Shares of Wockhardt rose over 11 percent intraday. According to CNBC-TV18 sources, US Food and Drug Administration (FDA) has completed inspection of the drug manufacture's Waluj facility yesterday. The regulator had inspected Wockhardt's Chikalthana facility a month ago. Meanwhile earlier in April, the Wockhardt has recalled select drugs in the US, manufactured at its two units at Chikalthana and Waluj in Maharashtra, which were under import restrictions from the USFDA.

The market is flat dragged by auto and technology stocks. The Sensex is down 13.66 points at 27517.75 and the Nifty is down 10.10 points at 8329.25. About 1007 shares have advanced, 1345 shares declined, and 170 shares are unchanged.

Coal India, Axis Bank, BHEL, ONGC and NTPC are top gainers in the Sensex. Among major laggards in Tata Motors, M&M, Infosys, Vedanta and Wipro.

The rupee extended decline for third straight session, slumping to 64-level against the dollar on persistent dollar demand from banks and importers.

Khoon Goh, Senior FX Strategist, ANZ Research said dollar will continue to strengthen driven by Federal Reserve's firmness to hike interest rates by this year. According to him, rupee will continue to slide against the American currency and may depreciate to 65 against the dollar by year-end.

The Indian currency, however, will see modest correction against other emerging market currencies and may outperform them, he added.

12:50pm Kotak on earnings performance: With fourth quarter corporate earnings playing out his long-stated belief that the turn of the investment cycle is at least a few quarters away, Kotak Institution Equities' noted analyst Sanjeev Prasad said that given the weak numbers, the market was "unlikely to go anywhere in a hurry" and that that was the best case scenario.

"FY15 earnings per share (EPS) was 7-8 percent lower than what he had assumed and we had gone into the quarter with subdued expectations," Prasad said.

Going forward, he said March 2016 Nifty EPS could be downgraded to Rs 450-460. "That would put the market at 18 times [PE] on FY16 basis. Unless you're assuming 16-17 percent growth in FY17, I don't think this market is going anywhere in a hurry."

12:30pm Rupee Outlook: Khoon Goh, Senior FX Strategist, ANZ Research said dollar will continue to strengthen driven by Federal Reserve's firmness to hike interest rates by this year. According to him, rupee will continue to slide against the American currency and may depreciate to 65 against the dollar by year-end.

The Indian currency, however, will see modest correction against other emerging market currencies and may outperform them, he added.

12:00pm Market Check
The market remained under pressure though it recovered from the day's low. Technology and auto stocks traded weak while banks and capital goods stocks gained.

The Sensex slipped 66.97 points to 27464.44 and the Nifty declined 27.30 points to 8312.05. The broader markets fell marginally too.

About 943 shares have advanced, 1268 shares declined, and 161 shares are unchanged on the Bombay Stock Exchange.
 
Market veteran Ramesh Damani said the bull market has not topped out. According to him, currently a painful correction is underway, adding that a rate cut will be next trigger for any upmove.

The rupee weakened to over 64 a dollar today to a 2-week low, led lower by broad dollar strength, weak equities and month-end importer demand. Bonds are lower too, tracking weakness in rupee, but sentiment remained positive ahead of RBI policy meet next week.

Tech Mahindra saw a sharp cut, down 12 percent reacting to its Q4 numbers, especially the more than 500 basis points decline in the margins. Brokerages such as CLSA and Goldman Sachs maintained sell and cut target on the stock.

Tata Motors too reacted negatively to its Q4 numbers with a weak operational performance weighed on the stock. Brokerages maintained overweight rating, but cut target price on the stock. The stock lost 5 percent.

Wockhardt gained 10 percent as the US Food and Drug Administration (USFDA) has completed its inspection at company's Waluj facility on May 26, reports CNBC-TV18 quoting unnamed sources. The US drug regulator has now completed inspection of both Waluj and Chikalthana facility, which had received an import alert earlier. USFDA had inspected Chikalthana facility around a month ago.

11:50 am Market outlook: With fourth quarter corporate earnings playing out his long-stated belief that the turn of the investment cycle is at least a few quarters away, Kotak Institution Equities' noted analyst Sanjeev Prasad said that given the weak numbers, the market was "unlikely to go anywhere in a hurry" and that that was the best case scenario.

"FY15 earnings per share (EPS) was 7-8 percent lower than what he had assumed and we had gone into the quarter with subdued expectations," Prasad told CNBC-TV18. Going forward, he said March 2016 Nifty EPS could be downgraded to Rs 450-460. "That would put the market at 18 times [PE] on FY16 basis. Unless you're assuming 16-17 percent growth in FY17, I don't think this market is going anywhere in a hurry."

11:30 am Poll: The Reserve Bank of India is likely to cut its benchmark interest rate by 25 basis points to 7.25 percent when it meets early next week and make a similar move before December, according to the results of a poll. That would put India on a different path to the United States, where the Federal Reserve is widely expected to begin tightening policy later this year. The RBI has taken the precaution of building up currency reserves in case markets turn volatile amid the impending divergence. The survey found 38 of the 48 economists polled expected the RBI would cut the repo rate at the June 2 meeting, with 35 of those expecting a 25 basis points cut.

The market is still under pressure ahead of May F&O expiry tomorrow. The Sensex is down 55.41 points at 27476.00, and the Nifty is down 27.25 points at 8312.10. About 916 shares have advanced, 1181 shares declined, and 179 shares are unchanged.

Bharti Airtel, Axis Bank, BHEL, ONGC and NTPC are top gainers in the Sensex. Among the losers are Tata Motors, Infosys, GAIL, M&M and Wipro.

Oil prices rose in Asia on bargain-hunting following sharp falls in the previous session triggered by a strong US dollar and continued concern over the global supply glut, analysts said.

Oil prices have been weak on a resurgent dollar, which has strengthened following expectations that the US Federal Reserve will follow through on plans to raise record-low interest rates later this year. The stronger greenback makes crude more expensive for buyers using weaker currencies.

10:50am Wockhardt on buyers' radar: The US Food and Drug Administration (USFDA) has completed its inspection at company's Waluj facility on May 26, reports CNBC-TV18 quoting unnamed sources.

The US drug regulator has now completed inspection of both Waluj and Chikalthana facility, which had received an import alert earlier. USFDA had inspected Chikalthana facility around a month ago. The stock gained 7 percent.

10:30am Stocks in focus: Tata Motors plunged 5 percent as it reported a weak operational performance with their consolidated margins falling 280 basis points Y-o-Y. Barclays remained overweight on the stock but reduced its target price to Rs 685 from Rs 745 earlier.

BHEL gained 1.5 percent after it reported better than expected numbers on Tuesday. Antique has buy rating on the stock with a target price of Rs 350 while Goldman Sachs maintained its neutral rating, but upped target price from Rs 225 to Rs 236.

10:15am FII View: Ajay Kapur, Bank of America Merrill Lynch said the brokerage has favoured Chinese equities since August, 2014 when investor angst about corporate defaults and the property market was high, and the market was an underweight.

"While we are currently neutral weighted, risks are mounting. However, we continue to be overweight on India," he added.

10:00am Market Check
The market recovered from day's low supported by banks and capital goods stocks. The Indian rupee remained under pressure against US dollar, down 13 paise to 64.11 a dollar (at 2-week low).

The 30-share BSE Sensex fell 15.12 points to 27516.29 and the 50-share NSE Nifty declined 15.20 points to 8324.15. About 823 shares have advanced, 1001 shares declined, and 139 shares are unchanged on the BSE.

Tech Mahindra plunged 12 percent after reporting weak numbers with EBIT margin contracting to 12.37 percent from 17.66 percent on a sequential basis and profit collapsing 41.4 percent to Rs 472 crore due to decline in margin and higher forex loss. CLSA maintained its sell rating but cut target price by 4 percent to Rs 550.

9:55 am FM on banks NPS: Finance Minister Arun Jaitley said non performing assets of public sector banks would come down gradually over the next two-three quarters.

Asked about what steps were being taken to reduce NPAs, Jaitley, who was here to brief media about achievements of the NDA government in the last one year, said he is working on it. "When we came to power, the ratio of NPAs of public sector banks was 6 percent ".

Ideally, it should be 2 to 2.5 percent . Banks are still struggling to come out of this situation. Now, in the quarter ended March 31, it came down to 5.2 percent , which was 5.84 percent at the beginning of quarter.

"So we are not claiming that situation has completely reversed. We believe that the situation will gradually improve after two-three subsequent quarters. We are also bringing professionals into the banking system and appointing them as directors," he said.

9:45 am LIC Shopping spree: Country's largest insurer Life Insurance Corporation (LIC) has raised stake in state-owned Canara Bank by about 7.7 percent through preferential allotment of shares. It has also increased its stake in another public sector lender Bank of Baroda (BoB) by buying 4.7 crore shares from the open market. With the acquisition, the LIC's stake in BoB increased by 2.1 percent to 11.4 percent. LIC acquired the stake for a consideration of about Rs 750 crore as per the current price.

9:30 am Result: Energy solutions provider Thermax reported nearly 25 percent rise in net profit at Rs 132.31 crore for the fourth quarter ended March 31, 2015.

Its net profit in the January-March period of the previous fiscal, 2013-14, was Rs 105.90 crore, Thermax Ltd said in a regulatory filing.

The total income from operations in the fourth quarter of last fiscal increased to Rs 1,583.56, over Rs 1,417.6 crore in the corresponding quarter of the previous fiscal, it said.

The company posted net profit of Rs 335.9 crore for the financial year ended March 31, 2015, as compared to Rs 252.9 crore for 2013-14.

The total Income for 2014-15 increased to Rs 4,808.2 crore, over Rs 4,366.4 crore for the previous fiscal.

The market has opened on a weak note dragged by poor March quarter corporate earnings of key companies. The Sensex is down 138.45 points or 0.5 percent at 27392.96, and the Nifty is down 53.05 points or 0.6 percent at 8286.30. About 195 shares have advanced, 448 shares declined, and 70 shares are unchanged.

Tata Motors tanks 6 percent while Dr Reddy's Labs, Wipro, M&M and Vedanta are major laggrds. BHEL is up 1 percent.Sun Pharma, Bharti Airtel, ITC and ONGC are top gainers in the Sensex.

The Indian rupee has breached 64 level in opening trade, down 7 paise to 64.05 a dollar from 63.98 percent in previous session.

NS Venkatesh, IDBI Bank said the rupee saw a mild weakening in yesterday's trade. "Overnight macro economic data in the US markets dampened the sentiment which could have a rub-off effect on our own market and consequently the currency markets," he added.
He expects the USD-INR pair to trade in the range of Rs 63.90-64.10/USD.

Asian equity markets traded mixed early Wednesday, following a unimpressive lead from Wall Street overnight.

The US major indexes finished 1 percent lower each amid renewed strength in the US dollar and some upbeat data that could bolster the case for a quicker-than-expected rate hike. Wall Street reopened for its first trading day of the week after being closed for Monday's Memorial Day.

Japan's benchmark Nikkei 225 reversed a lower open to hover marginally above the flatline, as the dollar-yen touched 123.28 - the currency pair's highest level since July 2007.