BSE Sensex, Nifty flat; Indian Hotels up 11%, BHEL gains 5%

The market showed no sign of recovery in the last hour of trading before the September series expiry. Continuing its flattish trend, the Sensex is up 22.04 points or 0.11 percent at 19878.28, and the Nifty gains 4.25  points or 0.07 percent at 5878.10.

About 1103 shares have advanced, 1073 shares declined, and 155 shares are unchanged.

BHEL remains to be the gainer of the day, gaining around 5.5 percent. Coal India , Sun Pharma , Tata Steel and HDFC are other major gainers in the Sensex. Indian Hotels surged 11 percent on the BSE.

On the losing side are Jindal Steel , GAIL , Reliance , HUL and Hero MotoCorp.

Shares of Godrej Properties touched a record low of Rs 349.70 on Thursday. Morgan Stanley has equalweight rating on the stock and cut its target price to Rs 407 from Rs 535.

The brokerage house also cut its earnings per share estimates for FY14 and FY15 by 45 percent each, driven by slower-than-expected sales at the Ahmedabad and Commercial projects, delay in planned new  launches and new revenue recognition guidelines.

02:50pm ITC rebounds ITC shares gained more than 1 percent in afternoon trade Thursday after recouping losses. Bank of America Merrill Lynch reiterated its buy rating on the stock.

The brokerage house raised target price on the stock to Rs 399.

"We expect ITC to post a robust Q2, despite pricing-led pressure on cigarette volumes. Also, sustained improvement in FMCG profitability should be a key Q2 highlight. We maintain our estimates and raise our price  objective to Rs 399 as we roll forward our base," Bank of America Merrill Lynch report said.

According to the report, ITC remains its preferred pick in the Indian consumer space and it is also included in its latest Global Best of Breed portfolio.

At 14:59 hours IST, the stock advanced 1.16 percent to Rs 348.75 on the Bombay Stock Exchange.

02:38pm Oberoi Realty OFS The offer for sale issue of Oberoi Realty received bids for 50.7 lakh shares so far, as against issue size of 1.14 crore shares. The indicative price is at Rs 162 a share as against floor price of Rs 158 a share.

Debt-ridden Kingfisher Airlines' employees may go on hunger strike if demands are not met, reports CNBC-TV18 quoting sources. Senior management told staff that the company is in talks with more than one investor  for company's revival. "We sought permission from Karnataka high court to unfreeze accounts.

Senior management said the company can pay only one-month salary post Karnataka HC order. More than 2000 employees have left Kingfisher since the airline shut its operations. The stock gained 10 percent for the  third consecutive session.

02:28pm The market gained momentum amid volatility ahead of September series expiry. The BSE Sensex is up 88.07 points at 19944.31, and the Nifty is up 28.20 points at 5902.05.

The October series will begin tomorrow. Hemant Thukral of Aditya Birla Money sees the Nifty hovering in 5750-6000 range in October series. However, he feels the market does not have the potential to cross 6,000 on  the upside.

ABG Shipyard surged 20 percent on the back of a big block deal. About 5 lakh shares of the company changed hands on both exchanges at a rate of Rs 271-272.60 per share.

Wipro gained 1.5 percent. The stock will be included in the Nifty from tomorrow with a weigthage of about 1.5 percent.

Sun Pharma is among top Nifty gainers, up 2.7 percent. In a big boost for the company, Johnson and Johnson's Doxil supplies have been disrupted again due to manufacturing issues. Tis should push up Sun Pharma's  Doxil sales in the near-term.

1:45 pm Update: The capital market regulator on Thursday approved Gillette India promoter S K Poddar's and Proctor & Gamble's proposal to classify Poddar family's stake in the company as public shareholding.

Poddar family holds 12.8 percent stake in P&G and along with parent's 75.9 percent, the combined holding was more than the minimum public float norms. They were required to dilute stake in the company to raise  the public shareholding to the desired level.

However, the family had failed to comply with the minimum public shareholding norm and Sebi cracked a whip by freezing about 55 percent of the combined voting rights of P&G and Poddar in Gillette India. Sebi  guidelines on listed companies say that the ratio of promoter and public shareholding must be 75:25, or 3:1.

1:30 pm Bond market outlook: Mohan Shenoi, president-group treasury and global markets at Kotak Mahindra Bank expects the bond market to be stressed despite RBI's assurances on Wednesday that it will take  action to ensure liquidity in the system. The market is still concerned about the lack of fiscal consolidation, though the statement has at least eased frayed nerves, he told CNBC-TV18. He expects 10-year yields to be  in 8.5-9 percent range.

He also expects the long-term interest rates to rise based on its decision to hike repo rates and cut marginal standing facility (MSF) rates. Market is speculating a repo rate hike to 8 percent, Shenoi says.

1:20 pm Buzzer: Shares of ABG Shipyard are locked at 20 percent upper circuit in afternoon trade after one percent equity (more than 5 lakh shares) changed hands via two block deals.

More than 2.9 lakh equity shares changed hands at Rs 272.60 apiece on the National Stock Exchange and 2.14 lakh shares at Rs 271 apiece on the Bombay Stock Exchange. Two block deals are worth Rs 13.75  crore.

Meanwhile, promoters hold 69.24 percent stake in the company as of June 2013.

It is very quiet today with a marginal positive bias led by select private banking and capital goods names. The Nifty holds onto 5850. The Nifty is up 11.35 points or 0.19 percent at 5885.20. The Sensex is up 45.57  points or 0.23 percent at 19901.81.

About 1048 shares have advanced, 906 shares declined, and 139 shares are unchanged.

Manishi Ray Chaudhuri of BNP Paribas expects the market to remain weak in October and with a year-end Sensex target of 17000.

''I would think that even in consumer staples, which has been kind of a decent sector over the last year, there could be some downgrades. You could see that in consumer discretionary. Therefore I would think that  those numbers would possibly gradually get down to upper single digits. That is where market will be in a realistic range,'' he said about earnings.

Meanwhile, Sun Pharma is one of the top gainers in the Nifty. In a big boost for the company, J&J'S Doxil supplies have been disrupted again due to manufacturing issue and this should push up Sun Pharma's Doxil  sales in the near-term.

Tata Steel , Coal India , JP Associates and HDFC are other gainers in the Nifty. Meanwhile, laggards in the Nifty include Jindal Steel , HUL , GAIL and HCL Tech .

12:55pm Market Expert

Many market participants have rolled over their positions to the October series, however aggressive shorts have been built up in sectors like capital goods and banking where pharmaceutical stocks, fast moving  consumer goods (FMCG) and IT are seeing long side bias, says Yogesh Radke, Head-Quantative Research, Edelweiss Securities.

Speaking to CNBC-TV18 about the F&O segment, he clarified that expansion of rollover cost is because of currency hedging cost shooting up and not because of ultra bullish market sentiment. The currency hedging  cost has gone up from around 80 bps to nearly 100-110 bps, he added.

Market's upmove may fizzle out post this expiry because the rollover cost increasing. So, the Nifty showing some weakness and drift down towards 5,750 levels, he cautioned.

Meanwhile, AirAsia India today announced that it has been granted the no objection certificate by the Ministry of Civil Aviation and will begin the process of obtaining an air operating permit and prepare to kick-start its  operations.

AirAsia submitted a request to start a joint venture to begin AirAsia India earlier this year, partnering Tata Sons Limited and Arun Bathia of Telestra Tradeplace Pvt. Ltd., and was granted a formal approval by the  Foreign Investment Promotion Board (FIPB) of India two months later in April.

12:35pm Stocks In News

Oberoi Realty's promoter, Vikas Oberoi, will sell over 1.4 crore shares through an offer for sale (OFS) today. The issue with a floor price of Rs 158 per share should fetch over Rs 180 crore if it is fully subscribed. The  stock is down about 2 percent.

BGR Energy gained 2 percent as a new management team has been re-instated and has indicated that their key focus would be on commissioning power projects on hand and reworking billing cycles to get back  receivables. The team also indicated that it is looking at working overseas.

Wipro is buzzing around in trade today, up nearly 3 percent. The stock will be included in the Nifty from tomorrow with a weigthage of about 1.5 percent.

ABG Shipyard shares gained 20 percent on the back of a big block deal. About 5 lakh shares of the company changed hands on both exchanges at a rate of Rs 271-272.60 per share.

Coal India , BHEL and Tata Steel are top gainers in the Sensex, rising nearly 3 percent followed by HDFC and ICICI Bank with 1.6 percent gains.

Also Read - BNP Paribas sees earnings downgrades; suggests safe bets

12:20pm The market remained in a positive terrain amid choppy trade ahead of September series expiry. The Sensex is up 50.05 points at 19906.29, and the Nifty is up 16.35 points at 5890.20.

The October series will start on Friday. Manishi Ray Chaudhuri of BNP Paribas expects the market to remain weak in October and he has a year end Sensex target of 17000.

Sun Pharma is one of the top gainers in the Nifty, up nearly 3 percent. Johnson and Johnson's Doxil supplies have been disrupted again due to manufacturing issues. This should push up Sun Pharma's Doxil sales in  the near-term.

It is the last trading day for Raymond (down 2 percent) and Indian Hotels Company (up 0.4 percent) in F&O segment.

Meanwhile, the rupee gained on improved sentiment after the RBI lowered the minimum maturity period for banks to avail of the currency swap facility. Dollar sales by exporters is also aiding sentiment. The currency  gained 21 paise to 62.23 against the US dollar.

Bonds are firm after RBI said it is monitoring the liquidity situation and will take appropriate action, including open market operation purchases.

Globally Asian markets are mixed as investors remained cautious ahead of next week's US budget vote. Shanghai hit a 2-weeek low while Nikkei saw an intraday rebound as a weaker yen lifted Japanese exporters.

12:00 pm Brokerage view: BNP Paribas downgrades JSW Steel Ltd to "reduce" from "hold", citing expensive valuations after recent outperformance due to a delay in the US Federal Reserve's tapering of monetary  stimulus in September, reports Reuters.

The investment bank says its checks with steel producers and traders suggest that the benefits of a weak currency are neutralised when the rupee is around 60-62 to the dollar.

"With the rupee hovering at these levels, a sharp recovery in imports is unlikely and the export opportunity no longer looks as attractive," BNP Paribas said in a report.

11:45 am Market check: Trading is going listless with the Sensex up 56.39 points or 0.28 percent at 19912.63. The Nifty is up 14.10 points or 0.24 percent at 5887.95. About 964 shares have advanced, 786 shares  declined, and 134 shares are unchanged.

Sun Pharma (up 2.9 percent), BJEL (up 2.6 percent), Wipro (up 2 percent), Coal India (up 2 percent) and Tata Steel (up 2 percent) are lead gainers in the Sensex. Among the laggards are Jindal Steel , NTPC , GAIL ,  ONGC and Reliance.

11:30 am F&O Outlook: Hemant Thukral of Aditya Birla Money feels that the market does not have the potential to cross 6,000 on the upside, however, he expects it to be less volatile in this series. He sees the Nifty  hovering in 5750-6000 range in October series.

He feels that HDFC Bank and ICICI Bank may retest its lows and another 5-6 percent downside is likely. ''I would short HDFC Bank keeping a stop loss of Rs 640 and a target of Rs 585'', he told CNBC-TV18.  Meanwhile, he recommends buying Axis Bank and Yes Bank , which are outperforming others in the banking sector.

He also suggests buying on Larsen and Toubro (L&T) and Bharat Heavy Electricals Limited ( BHEL ).

11:20 am Buzzer: Investors are buying shares of Wipro on Thursday ahead of its inclusion in the Nifty from September 27 with a weigthage of 1.5 percent. The stock gained 2.9 percent to Rs 489.30 on the National  Stock Exchange.

It will replace Reliance Infrastructure (down 1 percent), which is the last stock from Anil Dhirubhai Ambani Group in the benchmark index, in the 50-share Nifty.

Earlier Wipro was excluded from the index on April 1, 2013 because of hiving off its non-IT business into separate company. The stock had been in the index from January 17, 2002.

The market is volatile ahead of the September series expiry as Nifty struggles below the 5900-mark. The Nifty is up 8.00 points or 0.14 percent at 5881.85 while the Sensex is at 19889.10 up 32.86 points or 0.17  percent. About 876 shares have advanced, 656 shares declined, and 129 shares are unchanged.

Asian markets were mostly lower reacting to the US close. However Nikkei saw an intraday rebound as a weaker yen lifted Japanese exporters.

In the commodities section, Brent slipped to USD 108 per barrel while gold was flat with a negative bias.

Dollar index was mostly unchanged at 80.38. Rupee was higher against the dollar on improved market sentiment after the RBI lowered the minimum maturity period for banks to avail the RBI's currency swap  facility.The RBI reduced the minimum maturity period to one year versus three years to on forex borrowings by banks beyond 50 percent of tier 1 capital.

The 10-year softened sharply reacting to RBI comments yesterday that it was closely watching the liquidity condition in the banking system and would take appropriate steps including OMOs to enable credit flow.

10:59am Market Update The market remained rangebound around its previous closing value. The Sensex is up 44.53 points at 19900.77, and the Nifty is up 12.95 points at 5886.80. In the currency space, the rupee  gained 12 paise to 62.32 against the US dollar, continuing its recovery for the second consecutive session. Globally, Asian markets are mixed. Shanghai Composite dropped 1.5 percent and Taiwan Weighted lost 1  percent. Hang Seng declined just 0.2 percent while Nikkei rebounded with 0.75 percent gains.

10:45am Buzzers BGR Energy shares rose 1.7 percent. As a new management team has been re-instated who have indicated that their key focus would be on commissioning power projects on hand and reworking  billing cycles to get back receivables, and have also indicated that they are looking at working overseas. Wipro gained nearly 2 percent as the stock will be included in the Nifty from September 27 with a weigthage of  1.5 percent odd. Reliance Infrastructure will be excluded from the Nifty.

10:30am Stocks in News Oberoi Realty shares fell 2.5 percent initially on the day of its offer for sale (OFS) issue opened on a separate window of exchanges for selling 1.14 crore shares. The company has set a floor  price at Rs 158 per share. Shares of Bombay Rayon Fashions , the Mumbai-based textile company, gained nearly 4 percent in early trade Thursday after the board of directors of the company approved the signing of  documents and agreements pertaining to corporate debt restructuring (CDR).

10:10am Volatility ruled the roost on Thursday morning ahead of September series expiry. Experts see the expiry around 5900-5950 levels today. The Sensex is up 27.92 points at 19884.16, and the Nifty is up 10.05  points at 5883.90, but the smallcap index outperformed benchmarks and even midcap, rising 0.5 percent. About 671 shares have advanced while 451 shares declined on the Bombay Stock Exchange. Hemant Thukral  of Aditya Birla Money, on the day of expiry, says that majority banks' rollovers are on the short side and in fact the oil and gas majors have also started to show rollovers on the short side.

According to him, the Nifty will retrace and retest the lower band of 5800 and 5750 in coming few trading sessions. Among bluechips, BHEL topped the buying list again, rising 2.7 percent followed by HDFC, Mahindra  & Mahindra and Sun Pharma with 1.7 percent gains. Country's largest private sector lenders ICICI Bank and HDFC Bank gained nearly 0.5 percent. However, ONGC and Bharti Airtel shares fell 1.7 percent each.  FMCG majors ITC and Hindustan Unilever declined nearly 1 percent.

10:00 am Management speaks: Though there seems to be very less chances of a one-time bulk diesel price hike, Sudhir Vasudeva, Chairman, ONGC , hopes that atleast the 50 paise increase per month would  continue. The reason for worry was under-recoveries were increasing, thereby increasing the subsidy burden, he says. "In case the dollar has about 62/USD and the oil price is about USD 110/barrel then the subsidy  burden would be something like Rs 159,000 crore which is just about the same as last year which was Rs 1,61,029 crore. So I am very optimistic that the subsidy burden would not be worse than what it was last  year," he says in an interview.

9:45 am FII view: Ridham Desai of Morgan Stanley thinks that portfolios should hug the benchmark and hence focus should be on picking stocks based on growth over value and quality over junk. "The choice between  defensives and cyclicals needs to be more idiosyncratic, given the macro underpinnings. We are market-cap-agnostic. Our big sector call is to underweight the banks and overweight technology," he said in an interview  to CNBC-TV18.

9:30 am Buzzer: Maruti Suzuki jumps over 2 percent on price hike price. The auto maker is goinig to increase the prices of its entire range of models by up to Rs 10,000 from October first week, mainly due to  depreciation of rupee. "We have been wanting to raise the price for some time as our input costs went up severely, mainly on account of weakening of rupee. However, the market was not conducive. Now it has  become inevitable," MarutiBSE 1.72 % SuzukiBSE 1.72 % India (MSI) Chief Operating Officer (Marketing and Sales) Mayank Pareek told PTI.

The market has opened flat on the day of September F&O series expiry. The Sensex is down 3.31 points or 0.02 percent at 19852.93, and the Nifty down 1.05 points or 0.02 percent at 5872.80. About 189 shares have  advanced, 86 shares declined, and 27 shares are unchanged. The Indian rupee opened with a gain of 14 paise at 62.30 per dollar against 62.44 Wednesday. Mohan Shenoi, Kotak Mahindra Bank said, "The steady flow  of dollars through FCNR (B) and bank foreign currency borrowings seem to have stabilised the rupee in the 62-63/USD range." "The reduction of minimum tenor for bank foreign currency borrowings from 3 years to 1  year will have a positive impact. The range for the day is seen between 62-62.70/USD," he added.

"The reduction of minimum tenor for bank foreign currency borrowings from 3 years to 1 year will have a positive impact. The range for the day is seen between 62-62.70/USD," he added. BHEL , Maruti Suzuki, Infosys  , Sun Pharma and Bajaj Auto are the major gainers in the Sensex. Among the laggards are Hindalco , Bharti Airtel , ONGC, Reliance and TCS . US markets ended lower yesterday with the Dow and S&P closing in the  red for the fifth-straight day. Europe finished lower.

Meanwhile, Asian markets extended losses in morning trade today on the back of US debt drama. Markets posted a third session of losses as investors remain on  the sidelines ahead of next week's US Budget vote. European markets closed lower with subdued investor sentiment as concerns about the US debt ceiling weighed there as well In France, the government presented  its budget for 2014.

The budget included a 15 billion euro, that 's an over 20 billion dollar cut in government spending next year and a 3 billion euro rise in taxes. Many of those increases will hit households and  consumers. From precious metals space, gold higher by more than 1 percent as concerns about a potential US government shutdown pulled the dollar lower.