Sensex ends flat despite fall in June inflation; metals up

Equity benchmarks started off the week on a sluggish note with the indices falling marginally on Monday despite better inflation data, weighed down by FMCG and select banks & technology stocks. However, rally in metals and capital goods capped the downside.

The 30-share BSE Sensex managed to hold the 25000 level, down 17.37 points to close at 25006.98 while the 50-share NSE Nifty declined 5.45 points to 7454.15 despite positive global cues.

The market consolidated today after falling more than 900 points (Sensex) in previous four sessions and that volatility was attributed to concerns over GAAR issue, say experts, adding if the market corrects then that should be bought into.

Dhananjay Sinha, head - institutional research at Emkay Global Financial Services believes lack of clarity on General Anti-Avoidance Rule (GAAR) is causing market volatility. According to him, earnings growth will define market trajectory in the near term.

S Naganath, President and Chief Investment Officer, DSP BlackRock Investment Managers says the correction is unlikely to be more than 5-10 percent and that investors should look to buy on every correction.

On the economic data front, wholesale price index inflation for June moderated to 5.43 percent from a five-month high of 6.01 percent in May. Food inflation came in at 8.14 percent in june while more worrisome was the manufacturing inflation which rose by 3.61 percent versus 3.55 percent in May.

The street will closely watch consumer price index inflation for June which will be announced in evening today. CNBC-TV18 poll expects June CPI to come at 7.45 percent, down from 8.28 percent in May.

Stocks in action
Infosys, the second largest software services exporter in India, plunged 3 percent as analysts worried over its attrition rate of more than 19 percent and also they feel the company may not be able to meet its top end of FY15 dollar revenue guidance (7-9 percent).

Its rival Wipro dropped too, down 2.2 percent whereas TCS gained more than a percent ahead of quarterly earnings on July 17.

Sesa Sterlite declined over a percent after corporate affairs ministry says it challenged High Court approval to Sesa Goa-Sterlite merger, adding this merger was designed to avoid tax. State-run power producer NTPC was down 1 percent too after Central Electricity Regulatory Commission rejected company's plea for change in tariff norms for 2014-2019.

FMCG major Hindustan Unilever and top telecom operator Bharti Airtel were among other losers, down 2.6 percent and 1 percent, respectively.

However, shares of Tata Motors, ONGC, Hindalco Industries, Tata Steel, Tata Power, Hero Motocorp and BHEL gained 1-4 percent. Engineering and construction major Larsen & Toubro was up 1.5 percent after its subsidiary L&T Hydrocarbon has received Rs 5076 crore worth of order from Kuwait Oil Company.

Declining shares outnumbered advancing ones by a ratio of 1694 to 1122 on the BSE.

03:30pm Market close
The market closed lower for the fifth consecutive session on Monday. The Sensex fell 17.37 points to 25006.98 and the Nifty lost 5.45 points to 7454.15.

About 1124 shares have advanced, 1696 shares declined, and 106 shares are unchanged.

Infosys and Hindustan Unilever topped the selling list, falling 3 percent each whereas L&T, Tata Motors, Hindalco Industries, Tata Steel and Tata Power gained 2-4.5 percent.

03:20pm Advani Hotels in News
In a clarification note, Advani Hotels says it is not in talks with ITC to sell Ramada Caravela Beach Resort for Rs 700 crore.

According to media report quoting unnamed sources, ITC's hotel division is close to acquiring the Ramada Caravela Beach Resort from Advani Hotels & Resorts at a cost of Rs 700 crore.

03:15pm Trent in focus
Trent in its FY14 Annual Report says Tesco joint venture will operate food and grocery stores under Star brand. "This JV will focus on Maharashtra and Karnataka initially. We plan to open 3-5 stores in 1 year under Tesco JV," it adds.

03:05pm Zydus Wellness slips 5% post earnings
Zydus Wellness's first quarter (April-June) consolidated net profit dropped 24.7 percent to Rs 17.1 crore from Rs 22.7 crore in corresponding quarter of last fiscal.

Consolidated total income declined too, down 6 percent to Rs 101 crore from Rs 107.5 crore during the same period.

02:58pm Market expert
Dhananjay Sinha, head - institutional research at Emkay Global Financial Services believes lack of clarity on GAAR is causing market volatility. He says the market had run up a lot on expectation, but the Budget was different from what the market was expecting. In the near term, earnings growth will define market trajectory in the near term, he adds. He believes that midcaps can see some near-term correction.

02:50pm Man Industries up 4%
Man Industries' shareholders approve merger of company with Man Infraprojects. "The said scheme and amendments thereto shall be subject to further approval of the Honourable High Court of Judicature at Bombay and approval of regulatory authorities," the company says in its filing.

02:40pm Interview
Andhra Bank says it needs Rs 800 crore of additional capital, adding it will use the QIP route to raise capital.

About 9 percent dilution will provide capital for next 2 years, the bank says. "We have Rs 2,000 crore capital requirement for the next 2 years and can consider QIP issue of  Rs 400 cr this fiscal," it adds.

02:30pm: Events on July 15
TTK Prestige, NIIT Technologies and Geojit BNP will announce April-June quarter earnings on Tuesday.

Sagar Cement's board members will meet tomorrow to consider sale of the investments in company's joint venture, namely Vicat Sagar Cement.

The board of directors of Shakti Sugar and Shriram EPC will also meet on Tuesday to consider scheme of arrangement with FCCB holders and to consider fund raising via rights issue, respectively.

02:20pm: Time to start scouring in the mid-cap debris?
Many mid-caps are looking attractive after the steep fall last month. But as DSP Blackrock's S Naganath said on CNBC-TV18, investors will have to be cautious of what they are buying in the mid-cap space, since it is a high risk-high return play. Brokerage house Ambit is betting on Balkrishna Inds, V-Guard, Astral Poly, Marico, Page Inds, eClerx and Mayur Uniquoters as the top picks among mid-caps

01:55pm: F&O turnover on NSE at Rs 1.14 lakh crore
SBI, IRB, Tata Steel, Infosys and ICICI bank are among the most actively traded stock futures so far today. Among Nifty options contracts, the most actively traded ones are the Nifty 7600 Call, 7500 Call and 7400 Put. Judging by the trend in the options contracts, there seem to be more of optimists than pessimists around. Looks like most traders are betting that the correction is unlikely to deepen, even as indices have been struggling to stay in the positive territory today.

01:50pm: Market yet to make up its mind over defensives
Good recovery in BSE bank and capital goods indices from the lows of the day. The BSE Power index is the star performer of the day so far, up 1 percent over the previous close. Investors still seem to be preferring cyclicals over defensives, from a near to medium term perspective. IT, pharma and FMCG are still struggling for direction. Infosys' first quarter numbers were on expected lines. Maybe the market is waiting for TCS' and HCL Tech's numbers before firming up its view on the IT sector.

01:40pm Market recovers
Equity benchmarks recouped losses with the Sensex falling just 5 points to 25008 and the Nifty rising 3.15 points to 7462.75. About 996 shares have advanced, 1615 shares declined, and 108 shares are unchanged. Aluminium major Hindalco Industries rallied 5 percent.

01:30pm CPI inflation at 5:30pm today
Consumer price inflaiton for June will be announced in evening today. According to CNBC-TV18 poll, it expected to come at 7.45 percent, down compared to 8.28 percent in May.

Meanwhile, wholesale inflation for june moderated to 5.43 percent from a five-month high of 6.01 percent in May. The index has fallen largely because of base effect; prices of food and fuel shot up last June.

Food inflation came in at 8.14 percent in june; more worrisome was the manufacturing inflation which rose by 3.61 percent versus 3.55 percent in May. Core inflaiton went up to 3.9 percent versus 3.8 percent in May. Also the April WPI ifnlation number has been revised higher to 5.55 percent from 5.2 percent earlier.

Tthis is the fifth month in a row that the final numebrs are hgiehr than the provisional numbers. Economsits said that this revision along with the poor monsoon keeps them worried about inflation.

01:20pm Gainers
Aluminium major Hindalco Industries maintained its top position in the buying list, up 3.7 percent followed by TCS, Axis Bank, Tata Steel, Tata Power and BHEL with 1-1.5 percent.

Shares of HDFC, HDFC Bank, Reliance Industries, ONGC and L&T gained 0.2-0.7 percent.

01:15pm Losers
Infosys slipped 3 percent as brokerages worried over attrition rate of the company, which was more than 19 percent in June quarter. As far as its FY15 dollar revenue guidance is concernced, the company may not meet its guidance at higher end of the band, say analysts.

Sesa Sterlite fell over 3 percent as corporate affairs ministry says it challenged High Court approval to Sesa Goa-Sterlite merger, adding this merger was designed to avoid tax.

Shares of ICICI Bank, Wipro, Hindustan Unilever, Bharti Airtel, Cola India and Cipla declined 1-2 percent. NTPC slipped 1.5 percent as Central Electricity Regulatory Commission (CERC) rejected NTPC's plea for change in tariff norms for 2014-2019.

01:05pm Polaris Financial Technology slips
Orbitech sold more than 21 lakh equity shares in two sessions through block deals.

01:00pm Titan under pressure
Investors are worried as the jewellery company has discontinued its two schemes Golden Harvest and Swarna Nidhi on Ministry of Corporate Affairs clarification that they are now termed as public deposits under the new Companies Act.

The rules limit that companies can offer deposit holders to 12 percent and also caps the total amount of deposits within 25 percent of their networth. While the company had stopped extending this scheme to new customers from mid-April onwards, they have now stopped accepting further advances from existing customers too and are looking to redeem advances collected so far.

"To make it fair, we have designed a fair redemption offer. The company also assures all its account holders that it will soon come out with a new jewellery purchase scheme that will make it convenient for account holders to purchase jewellery, while complying with current laws," Titan said in a press statement.

If the account holder does not close the account before August 31, the company will refund the amount received and post the cheque to the customer. Customers can avail 75 percent of a monthly deposit from the company, if they opt for jewellery, and half a month's deposit if they opt for cash (in the case of a customer who has already made six monthly payments).

12:50pm Interview
In a move that could reduce prices of expensive anti-diabetic and cardiac medicines, National Pharmaceutical Pricing Authority (NPPA) has decided to bring them under price control by adding 108 formulation packs of 50 anti-diabetic and cardio-vascular medicines to price control list.

Speaking to CNBC-TV18 Kewal Handa, former MD, Pfizer says the move will reduce the prices of cardio-vascular drugs by almost 15-50 percent which may impact the revenues of drug companies.

According to Handa, the pricing regulator has gone beyond the national list of essential medicines (NLEM) and may include many more drugs, especially the cancer drugs going ahead, as per the suggestions by the health ministry.

12:40pm Europe markets open
European shares opened marginally higher following positive cues in Asia.  France's CAC, Germany's DAX and Britain's FTSE gained 0.2-0.4 percent.

Major Asian markets like Shanghai, Hang Seng and Nikkei climbed 0.9 percent, 0.5 percent and 0.9 percent, respectively.

12:35pm Market Check
Equity benchmarks extended fall in afternoon trade with the Sensex slipping 107.15 points to 24917.20 and the Nifty losing 28.60 points to 7431.00.

Declining shares outnumbered advancing ones by a ratio of 1583 to 912 on the BSE.

12:25pm NTPC in focus
Central Electricity Regulatory Commission (CERC) rejected NTPC's plea for change in tariff norms for 2014-2019.

CERC refused to accept NTPC's representation that it lacked consistency in framing principles for determination of tariff. NTPC had represented that the regulator had deviated from fundamental concepts and methodogies in place for a long time.

12:22pm S&P on India's sovereign ratings
Standard & Poor's said the Budget would not have an impact on India's sovereign ratings until the agency could see how the measures will be implemented, especially regarding meeting the fiscal deficit target.

Finance Minister Arun Jaitley said last week India would stick to the fiscal deficit target of 4.1 percent of gross domestic product for the year ending in March 2015 unveiled by the previous government.

"We think the budget is favourable to credit fundamentals to the extent that fiscal debt and interest ratios are expected to continue to improve," said Agost Benard, an associate director, at Standard & Poor's Ratings Services during a teleconference with reporters.

"But it remains to be seen how and to what extent will the various measures proposed be implemented and in particular how the deficit targets will be met," he added.

The comments reiterated S&P's statement last week after the budget. S&P is the only of the three major credit agencies to have a "negative" outlook on India, reports Reuters.

12:16pm Corporate affairs ministry says it challenged High Court approval to Sesa Goa-Sterlite merger, adding this merger was designed to avoid tax.

12:12pm June core inflation increased to 3.9 percent versus 3.8 percent during the same period.

12:06pm WPI inflation falls further

Wholesale Price Index inflation in June declined to 5.43 percent from 6.01 percent in May.

Food articles inflation slipped to 8.14 percent from 9.50 percent and primary articles inflation dropped to 6.84 percent versus 8.58 percent but manufactured products inflation increased marginally to 3.61 percent versus 3.55 percent month-on-month.

April WPI inflation was revised upwards at 5.55 percent as against 5.20 percent provisional.

12:01pm Unichem Labs falls 3% on weak margin

Unichem Laboratories' first quarter (April-June) net profit fell 16.3 percent to Rs 30.2 crore as against Rs 36.1 crore in corresponding quarter of last fiscal on account of fall in operating profit margin and other income.

Net sales jumped 9.6 percent to Rs 291 crore in June quarter versus Rs 265.6 crore in a year-ago period supported by export formulations that grew by 32.6 percent Y-o-Y. Domestic formulations growth stood at 2.5 percent year-on-year.

Earnings before interest, tax, depreciation and amortisation (EBITDA) increased 4 percent on yearly basis to Rs 43.7 crore but margin slipped 130 basis points to 15 percent impacted by increase in employee cost and adverse product mix.

11:58am June inflation
Economists expect WPI inflation at around 5.61 percent as against 6.01 percent in May.

For May, WPI was quite a shocker, it came in at a five months high, it was the highest level that we have seen in 2014 itself. It was the worst level that we have seen on the WPI since December 2013.

Watch out for the manufacturing inflation data, which spiked to a 13 months high in May, it came in at 3.55 percent.

11:53am New governors' list
Ram Naik will be new UP governor and Balaramji Tandon will be new Chhattisgarh governor, reports CNN-IBN quoting sources. OP Kohli will be new Gujarat governor and Kailashnath Tripathi new West Bengal governor, say sources.

11:50am DCB Bank in focus ahead of earnings
DCB Bank gained nearly 3 percent ahead of first quarter earnings today. Analysts expect net interest income growth of 23 percent and also expect asset quality to improve during April-June quarter.

11:45am Top gainers and Losers in Sensex
Infosys kept its top position in the selling list, falling 3 percent on attrition worries. Sesa Sterlite, Bharti Airtel and Wipro lost over 2 percent followed by Hindustan Unilever, Dr Reddy's Labs and Coal India with over a percent.

However, aluminium Hindalco Industries shot up nearly 4 percent. Shares of TCS, HDFC, L&T, Tata Steel, Axis Bank and Tata Power gained 0.7-1.8 percent.

11:40am Sanofi India slips 10%
The National Pharmaceutical Pricing Authority today added 108 more diabetic and cardiovascular formulations to the price control list, thereby dropping the prices of the same.

Gliclazide, Glimepride and Sitaglitin brought under price control by NPPA.

In cardiac molecules, Sanofi has total market share of 57.48 percent and in anti-diabetic molecules, its Total market share is 20.99 percent.

Analysts see overall financial impact of the NPPA rule is one-time and negligible for the company.

11:35am Infosys at fair value, says analyst
Ankit Pande, Quant Broking says Infosys is trading at fair value. "We are not too worried by short-term volatility in Infosys but worries exist on the macro front for the company," he adds.

According to him, FY15 dollar revenue guidance of 7-9 percent for the company is achievable, but 9 percent looks tough. He likes HCL Technologies in IT space.

He believes TCS valuations are not compelling, says the stock looks fairly priced.

11:30am Expert on pharma sector
The National Pharmaceutical Pricing Authority today added 108 more diabetic and cardiovascular formulations to the price control list, thereby dropping the prices of the same.

However, this will only have 2 percent impact on the EBITDA of the concerned pharma companies, says Arvind Bothra, vice president, Religare.

Speaking to CNBC-TV18, Bothra says that while the pricing isn't as much worrying as the ad hoc expansion of the price control which is a dampener for focused companies like Cipla, Cadila, Lupin.

11:20am Market Expert
Dhananjay Sinha, head - institutional research at Emkay Global Financial Services says lack of clarity on General Anti-Avoidance Rule (GAAR) is causing market volatility, adding earnings growth will define market trajectory in near-term.

He expects correction in PSU banks in near-term, saying the government is yet to address issue of bank recapitalisation.

According to him, the Budget has not done much to support market expectations. Midcaps could see some near-term correction, he adds. He continues to remain overweight on IT and pharma stocks.

TCS Q1FY15 results, which will be on July 17, could surprise on the upside, says Sinha, adding Europe segment results for TCS could surprise positively.

11:10am Oil minister Dharmendra Pradhan says oil ministry will make 10 percent ethanol blending mandatory after cabinet nod.

11:05am Market Check
Equity benchmarks continued to consolidate after falling for previous four consecutive sessions. The Sensex declined 26.33 points to 24998.02 and the Nifty fell 4.90 points to 7454.70.

About 980 shares have advanced, 1281 shares declined, and 102 shares are unchanged.

10:58am Revenue secretary on tax
The government faces "a challenge" in achieving the budgeted indirect tax target in the current fiscal year, the revenue secretary Shaktikanta Das said on Monday.

Shaktikanta Das, however, said that the government was confident of achieving the budgeted target of 15 percent growth in direct tax mop-up for the 2014/15 fiscal year.

10:50am Hindalco Industries tops buy list
Aluminium major Hindalco Industries surged 4 percent after falling 5.5 percent on Friday.

The company was in news last week after Alcoa reported strong earnings for the quarter ended June 2014. It reported operating income after tax at USD 97 million as against loss of USD 32 million in same quarter last year and profit after tax of UD 138 million as against loss of USD 119 million.

10:40am Shakti Pumps slips 5% despite strong earnings
Shakti Pumps' first quarter (April-June) net profit jumped 54.5 percent year-on-year to Rs 6.8 crore from Rs 4.4 crore in year-ago period.

Net sales shot up 36 percent to Rs 69.7 crore from Rs 51.2 crore during the same period.

10:35am Revenue secretary on GST
Revenue secretary Shaktikanta Das says the government has not reached a convergence with states on 3-4 issues on Goods and Sevices Tax. "Finance minister Arun Jaitley is in talks with states and he is confident of consensus on GST by March 2014-end."

He further says compensation structure and GST rates also will be finalised, adding tobacco, petroleum and entry tax shouldn't be subsumed in GST.

10:30am Unichem Labs falls 3.5%
Unichem Laboratories' first quarter (April-June) net profit fell 16.3 percent to Rs 30.2 crore as against Rs 36.1 crore in corresponding quarter of last fiscal on account of fall in operating profit margin and other income.

Net sales jumped 9.6 percent to Rs 291 crore in June quarter versus Rs 265.6 crore in a year-ago period supported by export formulations that grew by 32.6 percent Y-o-Y. Domestic formulations growth stood at 2.5 percent year-on-year.

10:25am IL&FS Transportation in news
"MP Border Checkpost Development Company, a subsidiary of the company, which had been mandated the development of 24 border check posts by MP Road Development Corporation has issued provisional completion certificate to commercially operate the Seoni-Nagpur border check post with effect from July 12," says the compay in its filing.

This is in addition to existing 7 numbers of border checkposts already in operation at Agra-Mumbai, Indore-Ahmedabad, Shivpur-Kota, Betul Nagpur, Indore Icchapure, Mhow-Neemuch and Jabalpur-Jaipur.

10:20am FII View
Markets still struggling for direction after last week's sell-off, which saw the Nifty and Sensex shedding nearly 4 percent. But investors need not worry too much, as a round of profit taking was only inevitable given the run-up in stock prices, says S Naganath of DSP Blackrock. The veteran fund manager sees markets globally, India included, correcting some more because of geopolitical factors. Around 5-10 percent, is his estimate. But any sharp decline should be viewed a buying opportunity, he told CNBC-TV18.

10:10am Advani Hotels in focus
Advani Hotels and Resorts is locked at 20 percent upper circuit as media report suggests that ITC is close to acquiring luxury hotel in Goa for Rs 700 crore from the company.

10:00am IndusInd Bank Boardroom
Ramesh Sobti, CEO and MD sees growth picking up on vehicle financing front now. He expects better times ahead for the commercial vehicle space.

According to him, non-performing assets have been stable for the past two quarters.

Private sector lender IndusInd Bank's net profit in first quarter of current financial year 2014-15 rose 25.7 percent year-on-year to Rs 421 crore supported by stable asset quality and higher other income.

Net interest income, the difference between interest earned and interest expended, increased by 17.7 percent on yearly basis to Rs 800 crore and other income (non-interest income) 22.5 percent to Rs 576.4 crore in the quarter gone by. However, net interest margin declined marginally to 3.66 percent from 3.75 percent on quarter-on-quarter basis.

9:50 am Market check: The Sensex is down 38.56 points at 24985.79 and the Nifty is down 9.90 points at 7449.70. About 647 shares have advanced, 1051 shares declined, and 70 shares are unchanged.

Tata Power, HDFC, L&T, Axis Bank and Hindalco are top gainers in the Sensex. Among the losers are Infosys (down 3 percent) ,Sesa Sterlite, Bharti Airtel, Coal India and Sun Pharma.

9:40 am Results: Unichem Laboratories' first quarter (April-June) net profit fell 16.3 percent to Rs 30.2 crore as against Rs 36.1 crore in corresponding quarter of last fiscal on account of fall in operating profit margin and other income.

Net sales jumped 9.6 percent to Rs 291 crore in June quarter versus Rs 265.6 crore in a year-ago period supported by export formulations that grew by 32.6 percent Y-o-Y. Domestic formulations growth stood at 2.5 percent year-on-year.

Total expenses climbed 15.2 percent to Rs 247 crore compared to year-ago period while other income fell to Rs 5.17 crore in June quarter as against Rs 7.6 crore in same quarter last fiscal.

9:30 pm WPI: The consumer price index is going to be announced this evening at 5.30 pm.  For June, the CPI data is expected to soften to 7.45 percent versus 8.28 percent month-on-month and the range is anywhere between 7.3 percent and 7.7 percent. Why exactly is this softening expected on a month-on-month basis and that too to such a large extent is because of a huge base effect which comes in year-on-year. In June 2013, we had CPI which jumped all the way close to 10 percent. It was at 9.87 percent in June 2013. Core CPI had jumped to 7.68 percent in June 2013. So because of that there will be a high base effect which will come into play.

The market has opened on a flat note Monday after the brutal cuts seen last week. The Sensex is up 68.81 points at 25093.16 and the Nifty is up 9.40 points at 7469.00. About 329 shares have advanced, 239 shares declined, and 43 shares are unchanged.

GAIL, Tata Power, Sun Pharma, ICICI Bank and SBI are top gainers in the Sensex. Among the losers are Tata Steel, Tata Motors, Hero Motocorp and Infosys.

The Indian rupee opened marginally lower at 60 per dollar on Monday as against Friday's closing value of 59.92 a dollar. The dollar, euro and yen started trade pretty much where they closed last week with investors awaiting pivotal events including Federal Reserve Chair Janet Yellen's congressional testimony for fresh cue.

Agam Gupta of Standard Chartered expects USD-INR to open around 60.05/dollar today. "We are likely to see interest from exporters on upticks and oil demand to emerge on any downtick," he adds. According to him, currency markets will take cues from the stock market, WPI data and CPI data - which are expected to come on the lower side. He expects rupee to trend in the range of 59.80-60.20/dollar.

Asian stocks started the week with gains as fears about Portugal's banking sector receded and as investor attention turned to corporate earnings.

On Friday, Portugal's government and Central Bank offered assurances that the nation's financial system was sound in an attempt to contain fears following financial irregularities at holding companies behind Banco Espirito Santo, the country's largest bank.

US markets climbed on Friday, but closed lower for the week, as investors weighed quarterly results from Wells Fargo and readied for a slew earnings ahead.

European shares ended the day flat, as traders shrugged off some concerns about the condition of Portugal's banking sector, which had dragged global markets lower on Thursday.

Brent crude held steady at USD 106 dollars per barrel as worries intensified over disruptions to supply in the Middle East and North Africa. Gold was steady at a four-month high on safe have demand.

Meanwhile, Germany was crowned winners of the 2014 Fifa World Cup beating Argentina 1-0 in extra time. Colombia's James Rodriguez won the Golden Boot for his six goals in the tournament.