Cautious Nifty ends flat ahead of RBI policy; BHEL tanks 6%

Indian shares closed flat amid volatility on Monday as investors looked cautious ahead of half-yearly monetary policy review by the Reserve Bank of India (RBI) tomorrow.

The market gained more than 100 points in early trade following the reshuffle of cabinet ministers yesterday. But that could not sustain for long as the market turned volatile ahead of policy meet. The 30-share BSE Sensex rose 10.48 points to close at 18,635.82 while the 50-share NSE Nifty went up 1.30 points to 5,665.60.

The gains in Reliance Industries, ITC, HDFC Bank, Wipro, Bharti and Infosys were counterbalanced by the fall in BHEL, L&T, ICICI Bank, Tata Motors, TCS and HDFC.

Majority of experts feel the central bank will go for 25 basis points cut in repo rate and cash reserve ratio.

Edelweiss Securities, in its preview report, said they expect RBI to reduce both CRR and repo rate by 25 basis points.

"While the CRR cut will largely pre-empt liquidity tightening in the busy credit season, the central bank will reduce repo rate by 25 bps to complement recent government actions and bolster the faltering economy. We argue that better-than-expected monsoon season, INR appreciation and downward pressure on global commodity prices, along with government's fiscal tightening initiatives (politically difficult decision of fuel price hike) have created room for RBI's actions," Edelweiss explained.

The Indian rupee fell by 45 paise to close below the 54 level at 54.01 against the US dollar at 15:31 hours IST.

State-run power equipment maker BHEL plunged 6.19 percent following disappointing quarterly earnings on every count. Profit after tax slipped 9.7 percent YoY to Rs 1,274 crore as against expectations of Rs 1,446 crore. Even its order book dropped to Rs 1.22 lakh crore in the quarter ended September 2012 from Rs 1.33 lakh crore in previous quarter.

India's largest private sector lender ICICI Bank was down 0.9 percent while its rival State Bank of India ended flat to negative. HDFC Bank gained 0.5 percent.

Commercial vehicle maker Tata Motors dropped 1.8 percent while utility vehicle maker Mahindra & Mahindra, two-wheeler majors Hero Motocorp and Bajaj Auto gained 1-2 percent.

FMCG major Hindustan Unilever shed another 1 percent after lower than expected volume growth in Q2 on Friday.

Software services exporter TCS was down 0.5 percent whereas its rival Wipro surged 2.56 percent.

Share of Coal India and Sterlite Industries were down 1 percent and 2.3 percent, respectively.

Index heavyweight Reliance Industries played a supportive role today, rising 1.5 percent on Cabinet reshuffle.

Cigarette major ITC was up 0.8 percent and telecom operator Bharti Airtel moved up 1 percent.

In the second line shares, public sector lender Bank of India lost 2.5 percent as higher provisions against bad loans dragged the net profit down by 39 percent YoY to Rs 301 crore in Q2FY13.

Havells India crashed 5.6 percent as its bottomline came in in-line with estimates but earnings before interest & tax margin of electrical consumer durables and switchgears business fell 425 basis points and 305 bps YoY, respectively.

Geometric plunged 10.5 percent following decline in margins and profit sequentially in Q2FY13. Even the company lost USD 3.6 million order in the quarter.

United Spirits tumbled 9 percent after liquor baron Vijay Mallya said he would not sell priced assets to save Kingfisher Airlines. UB Holdings lost 9.5 percent while United Breweries gained 6.5 percent and Kingfisher rose 3 percent.

Mahindra Satyam gained 3 percent ahead of quarterly earnings tomorrow.

The BSE Midcap and Smallcap indices went down 0.4-0.6 percent as declining shares outnumbered advancing by a ratio of 1,581 to 1,208 on the Bombay Stock Exchange.

On the global front, European markets were down 0.6-1 percent due to the hurricane emergency in the US (at the time of closing of Indian equities). The US equity markets will be shut today.

The BSE Sensex was trading flat to negative following weak opening of European markets and sharp fall in Indian rupee. France's CAC, Germany's DAX and Britain's FTSE were down 0.3-0.6 percent owing to the hurricane emergency in the US.

The Indian rupee lost 47 paise to 54.03 against the US dollar. The 30-share BSE benchmark was down 15.57 points to 18,609.77 and the 50-share NSE benchmark fell 6.65 points to 5,657.65.

United Spirits plunged 13 percent while Kingfisher Airlines and United Breweries gained 4 percent after promoter Vijay Mallya told Reuters that he would not sell priced assets to save Kingfisher Airlines.

Shares of public sector lender Bank of India plunged 6 percent as rising provisions against bad loans dragged the net profit down by 38.5 percent in the second quarter of FY13.

Power equipment maker BHEL extended losses to 5 percent following dismal performance in the September quarter. Net profit fell by 9.77 percent year-on-year to Rs 1,274 during the quarter as against analysts' forecast of Rs 1,446 crore due to sluggish order book.

Commercial vehicle producer Tata Motors lost 2.7 percent and FMCG major Hindustan Unilever fell nearly 2 percent.

Shares of ICICI Bank, Larsen & Toubro, HDFC, TCS, Infosys and State Bank of India were down 0.2-0.8 percent. Sterlite Industries tumbled 2.5 percent.

But index heavyweight Reliance Industries continued to support the market, rising 1.5 percent. Telecom operator Bharti Airtel, cigarette major ITC and private sector lender HDFC Bank were up 0.4 percent.

Shares of Wipro and Hero Motocorp gained 2.5 percent while Mahindra & Mahindra and Tata Power rose over 1 percent.

Declining shares outnumbered advancing by a ratio of 813 to 601 on the Bombay Stock Exchange.

Indian equity benchmarks erased their morning gains, weighed down by ICICI Bank and HDFC. Shares of state-owned power equipment maker BHEL plunged 4 percent as it has disappointed the street by reporting lower-than-expected topline and bottomline numbers while the only positive was its EBITDA margin in the second quarter of financial year 2012.

The Indian rupee extended fall close to 54 level, losing by 40 paise to 53.96 against the US dollar.

The 30-share BSE Sensex fell 10 points to 18,615.20 and the 50-share NSE Nifty slipped 3.15 points to 5,661.15.

Public sector lender Bank of India was down over 3 percent ahead of second quarter earnings . Analysts feel the asset quality of the bank could be negative this quarter. Other public sector lenders like Punjab National Bank and Indian Overseas Bank, which reported numbers last week, showed their non-performing assets rise in the quarter.

Banking shares were quite volatile ahead of the half yearly monetary policy review by the Reserve Bank of India tomorrow. State Bank of India, which gained over 1 percent in morning trade, was flat in afternoon trade. Private sector lender ICICI Bank, which was positive a hour ago, fell 0.7 percent. Housing finance company HDFC too was down 0.7 percent.

FMCG major Hindustan Unilever shed another 1.5 percent following a loss of 2 percent on Friday post weak volume growth.

Top commercial vehicle maker Tata Motors, coal mining company Coal India and gas transmission company GAIL were down 1 percent each.

Country's largest software services exporters TCS and Infosys declined 0.4 percent each while their rival Wipro gained 2.6 percent

Index heavyweight Reliance Industries gained 1.7 percent, supporting the market since early trade. Cigarette major ITC was up 0.4 percent.

Shares of Mahindra & Mahindra, Hero Motocorp, Cipla and Hindalco were up 1-2 percent.

The BSE Sensex remained choppy with positive bias, helped by Reliance Industries and HDFC Bank. State Bank of India, ITC and ONGC too were on buyers' radar while ICICI Bank, Infosys and Hindustan Unilever continued to remain under pressure.

The BSE benchmark climbed 53 points to 18,678 and the NSE benchmark was up 17 points to 5,681.30.

Private oil & gas producer Reliance Industries and India's largest lender State Bank of India gained 1 percent each.

Shares of utility vehicle maker Mahindra & Mahindra, software services exporter Wipro, aluminium major Hindalco Industries and two-wheeler maker Hero Motocorp went up over 1.5 percent.

Private sector lender HDFC Bank and state-run oil & gas producer ONGC moved up over 0.6 percent.

FMCG major Hindustan Unilever extended losses to 1 percent and software services exporter Infosys was down over 0.5 percent. Shares of Tata Motors, TCS and ICICI Bank were marginally lower.

In the second line shares, India Infoline, Prism Cement, DB Realty, Oriental Bank and Madras Cements rallied 3-6 percent while Gujarat Flourochem, Sun Pharma Advanced, Info Edge, Kansai Nerolac and Hathway Cable lost 2-5 percent.

Indian equity benchmarks continued to trade higher, though they erased somewhat early gains. Country's largest lenders State Bank of India and ICICI Bank were down 0.2 percent and 1 percent, respectively ahead of half yearly monetary policy review by the Reserve Bank of India tomorrow. Majority of analysts (and banking experts) feel the RBI may go for 25 basis points cut in repo rate.

Shailendra Bhandari, MD & CEO of ING Vysya Bank believes the RBI may cut repo or cash reserve ratio by 25 basis points.

The 30-share BSE Sensex went up 63 points to 18,687.92 and the 50-share NSE Nifty was up 17.75 points to 5,682.05.

Index heavyweights Reliance Industries and ITC retained their leading position, rising 1 percent and 0.8 percent, respectively.

Private sector lender HDFC Bank and engineering conglomerate Larsen & Toubro were up 0.5 percent each.

Utility vehicle maker rallied nearly 2 percent while two-wheeler majors Hero Motocorp and Bajaj Auto moved up nearly 1 percent.

Software services exporter Infosys and FMCG major Hindustan Unilever were down 0.6 percent. Sterlite Industries fell 1 percent.

Power equipment maker BHEL was marginally down ahead of second quarter earnings today. Analysts on an average expect subdued revenues in the quarter due to sluggish order inflows and margins to remain under pressure due to increased pricing pressure and negative operating leverage.

Advancing shares outnumbered declining by a ratio of 746 to 521 on the National Stock Exchange.

Indian shares opened higher on Monday with the BSE Sensex gaining 100 points following the reshuffle of cabinet ministers yesterday. In the biggest reshuffle of the Congress-led United Progressive Alliance Cabinet, Manmohan Singh inducted 17 new faces and a total of 22 ministers giving several new and young faces a chance to prove their mettle as his government tries to remove the taint of scams and non-performance from its progress report.

Veerappa Moily received petroleum ministry while Ministry of State (MoS) (Independent) for Power has given to Jyotiraditya Scindia.

The 30-share BSE Sensex rose 114.41 points to 18,740 and the 50-share NSE Nifty went up 32 points to 5,696.25. But the rupee fell by 26 paise to 53.82 against the US dollar.

Shares of Reliance Industries, Wipro, Dr Reddy's Labs, Hindalco, ITC, Tata Steel and Tata Power gained 1-1.5 percent.

Tata Motors, HDFC, HDFC Bank, Bharti, ICICI Bank, TCS, State Bank of India, ONGC and M&M were up.

Hindustan Unilever shed another 0.3 percent following disappointing volume growth in Q2FY13.

Infosys, Sterlite Industries, Sun Pharma and PNB were under pressure. BHEL erased early gains immediately ahead of quarterly earnings today.

The BSE Midcap Index rose 0.4 percent and Smallcap went up 0.6 percent. About two shares advanced for every share declining on the National Stock Exchange.

All UB group stocks caught in bear grip following a statement to Reuters by the promoter Vijay Mallya saying he would not sell priced assets to save Kingfisher Airlines.

United Spirits tanked 5 percent and United Breweries Holdings lost 8 percent. United Breweries was down 4 percent. Kingfisher gained 5 percent Mallya is confident of licence suspension being revoked. "We will submit a robust revival plan to Directorate General of Civil Aviation," he said.

India Infoline was up 5 percent after strong numbers. Consolidated net profit jumped significantly to Rs 66 crore in the quarter ended September 2012 from Rs 22 crore in a year ago  period.

CESC bounced back with 2 percent gains after Friday's sharp fall. Firstsource Solutions gained 2.5 percent after good results.

HCC, Yes Bank, IRB Infrastructure, GMR Infra, GVK Power, Sintex Industries, Chambal Fertiliser and LIC Housing Finance were up 1-2 percent.