Sensex takes breather; BHEL up 4%, IT slips on strong rupee

After a massive 300-point rally on the Sensex yesterday, the market paused for breather with the equity benchmarks seeing flat close on Tuesday.

The 30-share BSE Sensex managed to hold the 22000-mark, down 0.27 point to 22055.21 while the Nifty rose 6.25 points to see fresh closing life-high of 6589.75. Both indices touched record highs intraday - 22079.96 on the Sensex and 6595.55 on the Nifty.

Experts believe the euphoria of hitting new record highs will continue till general elections with intermittent sideways trade or consolidation or small profit booking. They see some volatility ahead of expiry of March series derivative contracts on Thursday.

Gautam Chhaochharia, head of India research of UBS Securities sees the Nifty touching 6,900 on favourable election outcome .

According to him, sector rotation will take front seat and this up move will be lead by cyclicals largely banks, which have a considerable weightage in the index.

Meanwhile, Ridham Desai, managing director, Morgan Stanley India said investors should now build such a portfolio that will withstand the volatility of elections and should be cautious in dealing with beta stocks.

The broader indices closed higher but the market breadth was negative. The BSE Midcap Index was up 0.61 percent and Smallcap gained 0.16 percent. However, declining shares outnumbered advancing ones by a ratio of 1647 to 1198 on the BSE.

State-run power equipment maker BHEL was the top gainer; up 4.4 percent to Rs 196.50 while its rival engineering and construction major L&T rose 1.5 percent.

Two-wheeler maker Hero Motocorp surged 3 percent and top car maker Maruti Suzuki was up 1.5 percent while M&M fell over a percent.

Shares of HDFC, Hindustan Unilever, Tata Steel, Coal India, Tata Power and NTPC gained 1-2 percent.

Top lenders State Bank of India and ICICI Bank climbed over 0.8 percent whereas Axis Bank declined 0.7 percent.

However, index heavyweight and petrochemical major Reliance Industries plunged 3 percent after Election Commission deferred gas price hike. ONGC trimmed losses in last couple of hours of trade to 0.3 percent from 3 percent.

Technology stocks saw selling pressure as the rupee touched its highest level in more than seven months on weak dollar and strong inflow of foreign money.

Wipro dropped 2.6 percent while Infosys was down 0.7 percent. TCS lost 0.3 percent despite the company said it has won a multi-million, multi-year deal from GDF Suez, a global leader in the energy sector.

The rupee was trading at 60.49 against the US dollar, up 28 paise compared to previous day's closing value (at 4:15pm).

In the broader space, Financial Technologies climbed over 5 percent on selling 5 percent stake in Indian Energy Exchange (IEX) to Mauritius-based Golden Oak.

Dalmia Bharat fell 3 percent after the company signed share purchase agreement with Jaiprakash Associates for buying its 74 percent stake in Bokaro Cement (a joint venture of JP Associates with SAIL). JP Associates closed flat.

03:50 pm Tata Motors fund raising plan
Tata Motors is planning to raise Rs 300 crore through 4-year 11-month bonds at 10 percent, a source with direct knowledge of the deal sai, reports Reuters.

The bonds are rated AA+ by Care rating agency, and Deutsche Bank is the sole arranger to the bond sale, said the source.

03:40 pm Market closing
The market consolidates with the Nifty closing at record high of 6589.75, up 6.25 points. The Nifty had hit fresh intraday high of 6595.5, while Sensex too hit fresh intraday high of 22,080 in trade today. The Sensex ended flat, down 0.27 points at 22055.21

BHEL, Hero MotoCorp, HUL, Larsen and Maruti Suzuki were top gainers in the Sensex.
Oil and gas stocks remained under pressure as Election Commission asked Oil Ministry to defer gas price hike which was meant to be effective from April 1. Losing 3 percent, Reliance dragged Nifty by almost 14 points. Wipro also fell 3 percent as rupee touched 8-month high.

Sesa Sterlite, M&M and Dr Reddy's Labs were other losers in the Sensex.

03:30 pm Deal
Tata Consultancy Services (TCS) said  that it has won a multi-million dollar multi-year contract from energy sector major GDF Suez to standardise customer relationship management (CRM) and billing applications across France, Belgium and the Netherlands.
 
The deal is Tata Consultancy Services' (TCS) first major contract in France since acquisition of Alti SA in 2013.
 
Paris-headquartered GDF Suez is an electric utility firm. It operates in the fields of electricity generation and distribution, natural gas and renewable energy.

03:20 pm Fund raise
Exim Bank has raised USD 500 million in an overseas bond sale programme in a 5.5-year money that was oversubscribed by over six-times and priced at a yield of 3.96 percent, according two merchant bankers.

The bank has given an initial pricing of US Treasury plus 245 bps but due to high demand the final pricing was set at five-year treasury plus 220 bps, thus witnessing a 25 bps tightening in the final pricing, offering an effective yield of 3.96 percent, said a merchant banker.

During the current fiscal, Exim has already raised USD 650 million in overseas bond offerings from the Australian, Singapore and Japanese (Uridashi) bond markets.

03:10 pm Buzzing
Engineers India's (EIL) stock touched a 52-week high of Rs 209.50 on the BSE, up 4.77 percent intraday after the company received USD 40 million contract for the Liwa Plastics project of Oman Refineries and Petroleum Industries (Orpic).

"EIL has been awarded a project management consultancy (PMC) contract by Orpic for their Liwa Plastics Project in Sohar, Oman against international competitive bidding competition from international consultants," the company said in a statement.

Orpic is owned by the Government of Oman and state-owned Oman Oil Company SAOC and has been created to pursue investment opportunities in the energy sector both inside and outside Oman.

02:59pm Kolte-Patil Developers up 2%
Kolte-Patil Developers said the Honourable High Court, Bombay has approved the scheme of amalgamation of Oakwoods Hospitality Private Limited with Kolte-Patil Developers Limited, by its order dated March 24, 2014.

02:50pm Praj Industries surges 14%
Praj Industries said it has changed the name of its subsidiary Neela Systems as Praj HiPurity Systems that was acquired in 2012.

"We realised that the new identity was imperative considering not only the increased participation of Praj but also the changed business direction. Praj HiPurity Systems offers USFDA and UK MHRA complaint systems for pharma and biotech industries," Pramod Chaudhari, executive chairman said.

Praj HiPurity will also offer wastewater treatment systems and zero liquid discharge systems in association with Praj Industries.

02:40pm Market Update
The market remains volatile in last hour of trade after hitting a fresh record highs. The Sensex declined 37.63 points to 22017.85 and the Nifty slipped 6.45 points to 6577.05.

About 1115 shares have advanced, 1629 shares declined, and 161 shares are unchanged.

The market has already priced in about 220-230 seats for the NDA, so this Modi-rally is now discounted for, believes Ridham Desai, managing director, Morgan Stanley India.

Speaking to CNBC-TV18, Desai says investors should now build such a portfolio that will withstand the volatility of elections and should be cautious in dealing with beta stocks.

''Now is the time to buy companies that have good cash flows and are trading at reasonable valuations,'' advises Desai who believes that the Indian equities are already trading at 50 percent premium to emerging markets (EMs).

02:35pm State Bank of Bikaner and Jaipur in focus
State Bank of Bikaner and Jaipur said the board of directors today has declared interim dividend for the financial year 2013-14 at the rate of 143 percent being Rs 14.30 per share on equity shares of Rs 10 each.

The stock rose nearly 3 percent amid high volumes.

02:30pm HP agrees to remain anchor client post MphasiS stake sale
Hewlett-Packard (HP) brings clarity on its role post MphasiS stake sale as the company  agrees to remain anchor client post the stake sale. HP not only has a significant financial stake in MphasiS, but is also a promoter and the largest client of the Bangalore-based IT services company.

02:20pm Nikkei falls amid choppy session
Japan's Nikkei share average dropped as a weak US manufacturing survey and worries about the Ukraine crisis soured sentiment, though gains in small-sized companies limited the losses.

The benchmark Nikkei ended 0.4 percent lower at 14,423.19 in a choppy session, and remained below its 200-day moving average of 14,509.61, reports Reuters.

02:10pm Arvind on buyers' radar
Shares of Arvind rose more than 5 percent as it bought 49 percent stake in Premium Garments Wholesale Trading, a joint venture that sells fashion brand Calvin Klein in India, for Rs 100 crore.

Arvind will now be the Indian partner for US-based Phillips-Van Heusen Corporation (PVH), which globally owns Calvin Klein trademarks, for selling Calvin Klein jeans, apparel and accessories and underwear products in the country.

J Suresh, MD and CEO, Arvind Lifestyle expects Calvin Klein to have margins of 15 percent by FY16. ''Calvin Klein margins can improve by 300 bps in FY15. Its revenue can improve Rs 150 crore in FY15 from Rs 125 crore," Suresh says.

02:00pm The market gained marginal strength in afternoon trade with the both equity benchmarks hitting fresh record highs supported by banks, capital goods and FMCG stocks.

The Sensex touched a record high of 22079.96, up 12.05 points to 22067.53 while the Nifty rose 8.55 points to 6592.05 after seeing life-high of 6595.45. However, the market breadth is negative - about 1145 shares have advanced while 1556 shares declined on the BSE.

State-run power equipment maker BHEL topped the buying list, rising over 4 percent while its rival L&T gained a percent.

Shares of HDFC, ICICI Bank, Hindustan Unilever, State Bank of India, Tata Steel, Tata Power and Hero Motocorp climbed 1-2 percent.

However, ONGC and Reliance Industries continued to see selling pressure, falling 2-3 percent after Election Commission deferred gas price hike.

Software services provider Wipro fell nearly 2 percent on rupee appreciation while rivals Infosys and TCS declined 0.3-0.5 percent.

Meanwhile, the rupee continued to trade at more than seven-month high of 60.52, up 25 paise compared to previous closing value.

1:50 pm Buzzing: Shares of Arvind rose 5 percent intraday as it bought 49 percent stake in Premium Garments Wholesale Trading, a joint venture that sells fashion brand Calvin Klein in India, for Rs 100 crore.

Motilal Oswal says post acquisition, Arvind will command a 90 percent market share in one of the fastest growing 'bridge to luxury' segment. Nirmal Bang is concerned over aggressive capex and poor allocation of funds by Arvind.

J Suresh, MD and CEO, Arvind Lifestyle expects Calvin Klein to have margins of 15 percent by FY16. ''Calvin Klein margins can improve by 300 bps in FY15 Its revenue can improve Rs 150 crore in FY 15 from Rs 125 crore.

1:40 pm Views on economy: TN Srinivasan, professor of economics at Yale University believes switching to consumer price index (CPI) as yardstick for tracking inflation would be a correct move by the Reserve Bank of India.

Srinivasan, who is one of India's foremost economists of the rank of Amartya Sen and Jagdish Bhagwati, in an exclusive interview to CNBC-TV18 said whole price index (WPI) is a silly tool to use to measure inflation.

A committee appointed by the central bank has suggested that focus of RBI should be on managing inflation, switching to consumer prices from wholesale prices in setting its inflation target and making monetary policy. Interestingly, Srinivasan has taught RBI deputy Dr Urjit Patel, who is author of this Patel Report on monetary policy framework.

1:30 pm Gold update: Gold rebounded from a one-month low hit in the prior session, helped by short covering and a rise in bullion-backed exchange traded fund holdings, but expectations of higher US interest rates and a lack of physical buying capped gains.

Some gold investors have turned bearish after comments last week from US Federal Reserve Chief Janet Yellen that suggested interest rates could rise sooner than many had expected, hurting bullion's appeal as a hedge against inflation.

"ETF holdings have been supportive. Much of that has been the main reason why prices this year have been stable," said Mark Keenan, head of Commodities Research for Asia at Societe Generale. "Short covering at the start of the year and the safe-haven appeal throughout the EM (emerging market) and Ukrainian crisis" have also underpinned prices, he said.

1:20 pm Market outlook: Rahul Arora, CEO, Nirmal Bang Institutional Equities believes that many investors are starting to get cautious. However, he says there is a general consensus that the Nifty will head to 7000 to 7200 either before or just at the cusp of elections.

He says buying has come back incrementally into defensives. Many investors - even from the institutional side - are not expecting a major upside from here, perhaps another 5-10 percent, even if there is a favourable election outcome.

However, he believes if the election outcome is not favourable, the impact on Nifty can be substantial. He says what has changed from a macro point of view is the current account deficit and the fiscal deficit situations have improved. Along with the hailstorms in MP and Maharashtra, and there are some reports that this year monsoons may not be good enough, which in turn can impact inflation. So that coupled with an unfavourable election outcome, the impact on the market can be substantial, he adds.

The market is consolidating after the heady run seen yesterday. The Sensex is down 42.04 points at 22013.44, and the Nifty is down 7.85 points at 6575.65.

About 1038 shares have advanced, 1522 shares declined, and 164 shares are unchanged. Reliance and ONGC are still under pressure.

Wipro, Bharti Airtel and Sesa Sterlite are othe losers in the Sensex. Among the gainers are BHEL, Tata Steel, HDFC, hero MotoCorp and GAIL.

The Election Commission has asked the government to defer its decision on hiking gas prices from April 1 and says the new gas price issue is sub-judice.

Brent crude fell towards USD 106.50 per barrel, dropping for a second straight session on disappointing manufacturing numbers from the world's biggest oil consuming nations, although supply concerns stemming from the Ukraine crisis checked losses.

Surveys showed manufacturing activity in the United States slowed in March after nearing a four-year high in February, while shrinking in China for a fifth month in a row.

The weaker-than-expected numbers from the top two economies muddied the outlook for crude demand, while worries of a build up in US oil stocks also weighed on prices.

12:59pm ALSTOM India gains 2%
Alstom received a contract worth approximately Rs 342 crore from BHEL to supply three 660 MW supercritical boilers for North Karanpura Super Thermal Power Project in Jharkhand. The units are expected to be commissioned in 2017.

"Under the scope of contract, Alstom - the sole licensor for BHEL supercritical technology - will design the 660 MW supercritical boilers and supply identified pressure parts along with windboxes," the company said in its filing.

The company further said out of the total order, ALSTOM India's scope of work would be approximately Rs 172.8 crore.

Key components will be manufactured in Alstom's facilities in Concordia, USA and in Durgapur, India.

12:50pm Strides Arcolab surges 5%
Shares of Strides Arcolab gained more than 5 percent on getting approval from US Food and Drug Administration for Adenoscan injection generic.

Astellas Pharma's heart drug Adenoscan sales stood at USD 65 million per year.

Teva Pharmaceuticals' exclusivity for marketing Adenoscan drug ended on March 23, 2013.

12:40pm Rupee at highest level since August 2, 2013
Indian rupee jumped to its highest level in more than seven months today following weakness in dollar and strong inflow foreign money.

The domestic currency breached 60.50 level, appreciating 30 paise to 60.47 a dollar in afternoon trade.

Foreign institutional investors have bought nearly Rs 15,000 crore worth of equity shares in March.

12:30pm Dalmia Bharat in focus
The acquisition of 74 percent stake of  Jaiprakash Associates in Bokaro Cement plant, will give a debt of Rs 220 crore to Dalmia Bharat , says its group CFO and wholetime director  Mahendra Singhi.

According to Singhi, for this Bokaro plant, 100 percent sourcing will be done from JP's plant as the company has a 30 years contract for supply of clinker, which is fully assured for the Bokaro unit. Dalmia Bharat plans to fund the acquisition both via equity and debt.

The company is looking for a production of around 10 million tonne for FY14.

12:20pm Market Expert
Rahul Arora, CEO, Nirmal Bang Institutional Equities believes that many investors are starting to get cautious. However, he says there is a general consensus that the Nifty will head to 7000 to 7200 either before or just at the cusp of elections.

He says buying has come back incrementally into defensives. He says the from the August lows, Nifty has rallied 30 percent, Bank Nifty about 25 percent, rupee by 13-14 percent and a lot of that is on the back of what people are expecting from the outcome of elections. But many investors - even from the institutional side - are not expecting a major upside from here, perhaps another 5-10 percent, even if there is a favourable election outcome.

However, he believes if the election outcome is not favourable, the impact on Nifty can be substantial.

12:10pm Financial Technologies gains 3%
Financial Technologies sold 5 percent stake in Indian Energy Exchange (IEX) to Golden Oak.

"The company has entered into a share purchase agreement for sale of 13,64,787 equity shares of lEX to Golden Oak (Mauritius), for a consideration of Rs. 72.89 crore. The stake sale was to comply with Central Electricity Regulatory Commission (CERC) regulations to bring down the company's stake in lEX to 25 percent," the company said in its filing.

After the said transaction, the shareholding of the company in lEX will come down to 28.49 percent from 33.49 percent.

12:00pm The market continued to be rangebound in noon trade with the Sensex holding the 22000 level supported by banks, capital goods and power stocks.

The Sensex fell 30.26 points to 22025.22 and the Nifty slipped 6.25 points to 6577.25. Declining shares outnumbered advancing ones by a ratio of 1377 to 1031 on the BSE.
 
Shares of Reliance Industries and ONGC dropped 2-3 percent after Election Commission deferred gas price hike.

Wipro lost 1.5 percent and Infosys slipped 0.15 percent whereas TCS rebounded, rising 0.3 percent on getting multi-million, multi-year order from GDF Suez for providing services across France, Belgium and Netherlands.

11:50 am Market outlook: Modi-rally is now discounted for, believes Ridham Desai , managing director, Morgan Stanley India.

Desai says investors should now build such a portfolio that will withstand the volatility of elections and should be cautious in dealing with beta stocks.
Now is the time to buy companies that have good cash flows and are trading at reasonable valuations,'' advises Desai who believes that the Indian equities are already trading at 50 percent premium to emerging markets (EMs).

However, foreign institutional investors (FIIs) have continued to park their funds in India. They have doubled their inflows in the past five years, and are much better than the capital received in the five years preceding that which was, infact, a bull market.

11:40 am In focus: Shares of Financial Technologies (FTIL) surged as much as 3.7 percent intraday after it sold 5 percent stake in Indian Energy Exchange (IEX) to Golden Oak.

"The company has entered into a share purchase agreement for sale of 13,64,787 equity shares of lEX to Golden Oak (Mauritius), for a consideration of Rs. 72.89 crore. The stake sale was to comply with Central Electricity Regulatory Commission (CERC) regulations to bring down the company's stake in lEX to 25 percent," the company said in its filing.

After the said transaction, the shareholding of the company in lEX will come down to 28.49 percent from 33.49 percent.

11:30 am Interview: After the success of Celerio, Maruti is ready with yet another launch, the mid-sized Sedan Ciaz. The company will be launching it in Q2FY15. Celerio has done phenomenally well even during the slowdown. The car has 30,000 bookings. And with March being a traditionally a good month, the company expects to better its February sales numbers.

Speaking to CNBC-TV18 , Mayank Pareek, managing executive officer-marketing & sales, Maruti Suzuki says that the launch of Ciaz doesn't mean that the customers are phasing out the SX4 sedan but is instead a move to strengthen the company's portfolio.

11:20 am Buzzing: Shares of Gujarat NRE Coke jumped 12.5 percent intraday on Tuesday, after its debt restructuring plans firm up. The coking coal-maker company has received the formal approval for the restructuring of the debts, from the Empowered Group of Corporate Debt Restructuring Cell.

"The approval of the CDR package establishes the fundamental viability of our business. The package would certainly held up in realigning debts and help revive the company," Arun Kumar Jagatramka, CMD said.

According to the terms of package, the debt will be restructured for 10 years door-to-door with two-year moratorium and ballooning repayment.

The market continues to remain rangebound. The Sensex is down 33.63 points at 22021.85, and the Nifty is down 4.25 points at 6579.25. About 1062 shares have advanced, 1182 shares declined, and 147 shares are unchanged.

The rupee is at a 7.5 month high tracking gains in the euro and Asian peers. Bonds are steady tracking strength in the rupee. Profit sales limit further gains. Most market players are on the sidelines ahead of the release of the government's borrowing calendar.

Reliance, ONGC, Wipro, Bharti and M&M are top losers in the Sensex. The gainers in the Sensex include BHEL, GAIL, Tata Steel and HDFC twins.

Commodities saw gold trade near one month lows. Brent crude was stable but Nymex gave up early gains on news that officials were looking to reopen a key Texas shipping channel.

Asian markets trade lower. However, hopes of the Chinese government supporting the economy with a stimulus plan following its weak manufacturing data limits the downside.

10:55am ONGC not perturbed by deferment of gas price hike
The Election Commission on Monday asked the oil ministry to defer notifying doubling of price of the fuel produced by companies such as  Reliance Industries till general elections are completed . However, DK Sarraf, Chairman of ONGC is not perturbed by the news, saying it is just a deferment.

He believes whichever government will come into power next will go ahead with the existing energy policies – gas price hike – as it is in the interest of the nation. He says the new government too will see the merits of hiking gas price.

He says there is no clarity on whether the new government will accept the Rangarajan formula.

Sarraf says it is possible to implement price hikes retrospectively from bulk customers, but it will be tough to do the same as far as retail customers go.

10:45am Gujarat NRE Coke surges 7%
Gujarat NRE Coke has received the formal approval for the restructuring of the debts, from the Empowered Group of Corporate Debt Restructuring Cell.

"The approval of the CDR package establishes the fundamental viability of our business. The package would certainly held up in realigning debts and help revive the company," Arun Kumar Jagatramka, CMD said.

According to the terms of package, the debt will be restructured for 10 years door-to-door with two-year moratorium and balloning repayment.

"There will be an additional need based working capital aggregating to Rs 370 crore. The company will get fresh term loan of Rs 50 crore for completing the waste heat recovery based power plants at Dharwad, Karnataka," the company said in its filing.

10:35am Maruti Suzuki talks to CNBC-TV18
After the success of Celerio, Maruti is ready with yet another launch, the mid-sized Sedan Ciaz. The company will be launching it in Q2FY15. Celerio has done phenomenally well even during the slowdown. The car has 30,000 bookings. And with March being a traditionally a good month, the company expects to better its February sales numbers.

Speaking to CNBC-TV18, Mayank Pareek, managing executive officer-marketing & sales, Maruti Suzuki says that the launch of Ciaz doesn't mean that the customers are phasing out the SX4 sedan but is instead a move to strengthen the company's portfolio.

On the success of the Celerio, Pareek says, ''These automatic variants have taken the market by storm. So we are now working on increasing our capacity for Celerio production.''

10:25am SKS Microfinance on buyers' radar
SKS Microfinance on March 24 said it has completed the eleventh securitisation transaction during the current financial year of Rs 183.02 crore.

With this, the total sum of securitisations completed for FY14 (year-to-date) is Rs 1,560.96 crore.

"The entire pool, which qualifies for priority sector treatment as per RBI's priority sector lending guidelines, is rated AA (SO) by a leading rating agency. That signifies a 'high degree of safety regarding timely servicing of financial obligations' and such instruments carry a very low credit risk," the company said in its filing. The stock is up over 1 percent.

10:10am Market Expert
The biggest near-term catalyst for the Indian market is the upcoming general election and the current rally is seen as the one fuelled by hope of a stable government. Gautam Chhaochharia, head of India research of UBS Securities sees the Nifty touching 6,900 on favourable election outcome.

Speaking to CNBC-TV18, he said, sector rotation will take front seat and this up move will be lead by cyclicals largely banks, which have a considerable weightage in the index. Other sectors like industrials and power would also perform well.

Traders who are looking to play recovery in the capex cycle theme can buy infrastructure stocks, but from six months – two years perspective, one should be cautious because on the ground revival in the sector will take a longer time. L&T and BHEL are his top picks from the capital goods space. He likes Voltas from the midcaps.

10:00am Equity benchmarks are marginally lower on profit booking after spectacular rally of more than a percent in previous session. The Sensex fell 31.43 points to 22024.05 and the Nifty declined 2.25 points to 6581.25. About 1034 shares advanced while 869 shares declined.

Shares of oil and gas stocks are reeling under heavy selling pressure as the much-awaited gas price hike has been deferred. Election Commission has asked the government to defer the notification of the new gas price saying the issue is sub-judice, thereby preventing the new gas price regime coming into effect from April 1. Shares of Reliance Industries and ONGC slipped 2.5 percent and 1.3 percent, respectively.

Technology stocks are down as the rupee appreciated further, rising 24 paise to 60.53 against US dollar. TCS and Infosys slipped 0.3-0.4 percent while rival Wipro declined 1 percent.

However, Tata Steel gained 2 percent as media reports suggested that company's 25 acre land parcel in Mumbai suburb fetches Rs 1,155 crore in an e-auction.

State-run power equipment maker BHEL continued to see buying interest, rising 2 percent. HDFC and HDFC Bank climbed a percent.

State-run gas transmission company GAIL rebounded with nearly 2 percent gains after initial sell-off.

9:50 am Market outlook: The biggest near-term catalyst for the Indian market is the upcoming general election and the current rally is seen as the one fuelled by hope of a stable government. Gautam Chhaochharia, head of India research of UBS Securities sees the Nifty touching 6,900 on favourable election outcome.

Speaking to CNBC-TV18, he said, sector rotation will take front seat and this up move will be lead by cyclicals largely banks, which have a considerable weightage in the index. Other sectors like industrials and power would also perform well.

Traders who are looking to play recovery in the capex cycle theme can buy infrastructure stocks, but from six months – two years perspective, one should be cautious because on the ground revival in the sector will take a longer time. L&T and BHEL are his top picks from the capital goods space. He likes Voltas from the midcaps.

 9:40 am In focus: Investors are buying shares of Jaiprakash Associates (JAL) and Dalmia Bharat as the former decided to sell stake in Bokaro Cement to as a part of debt reduction strategy. These stocks gained as much as 2 percent and 2.8 percent, respectively.

"The board of directors of the company on March 24 has approved signing of share purchase agreement with Dalmia Cement for sale of 74 percent stake (or 9,89,01,000 equity shares) of Bokaro Jaypee Cement (BoJCL) to Dalmia Cement," the company said in its filing.

Bokaro Jaypee Cement is a joint venture between JAL and Steel Authority of India (SAIL). It has a 2.1 million tonne cement capacity.

Hence, the above stake sale is subject to the approval of SAIL and such other approvals, as may be necessary from lenders of BoJCL and concerned authorities.

 9:30 am Government's outlook on economy: Exuding confidence that growth will improve in the coming months, the Finance Ministry today said economy has stabilised which is evident from the strengthening of the stock markets as well as the rupee.

"I certainly believe ... the economy has stabilised and that is reflected in rupee and stock markets. And going forward, I think, we will see growth numbers also improving," Economic Affairs Secretary Arvind Mayaram told reporters.

After record closing high yesterday, the market seems to take a breather on Tuesday. The Sensex is down 132.39 points at 21923.09, and the Nifty is down 33.40 points at 6550.10.
About 203 shares have advanced, 167 shares declined, and 32 shares are unchanged.

Oil and gas stocks are reeling under heavy selling pressure on Election Commission (EC) notification to defer gas price hike till general elections are completed. ONGC and Reliance are down 3-4 percent GAIL, Coal India and Hero Motocorp are other laggards in the Sensex.

Among the gainers are Sun Pharma, Tata Power, NTPC, Cipla and Reddy's Labs.

The Indian rupee gained in the early trade. It has opened higher by 18 paise at 60.59 per dollar against 60.77 Monday.

The US dollar nursed broad losses as investors bought the euro and drove the Australian dollar to its highest this year.

Some analysts pointed to a disappointing industry survey, which showed US manufacturing activity slowed in March, as one reason for the dollar's weakness.

Ashutosh Raina of HDFC Bank said that, ''The euphoria about expected political stability, coupled with lower CAD and better inflation figures have resulted in equity and currency markets outperforming Asian peers.''

''FII flows in both debt and equity have been hugely positive. The positive sentiment can easily result in rupee breaching 60/dollar sooner than later. Expect rupee to trade in 60-61/dollar range in near-term,'' he added.

Meanwhile, the global cues are negative as the US markets fell for a second session, with the Nasdaq down over a percentAsia, meanwhile, is trading negative in morning trade.

And precious metal gold steadied in early Asian trade, but trades just off of a one-month low after tumbling about 2 percent in the previous session.