Maruti slumps 8% post Q3 nos, Tata Steel up 4%; Sensex flat

3:55 pm Subsidy woes: The government has ordered OIL and Natural Gas Corp ( ONGC ) to pay a near-record Rs 13,764 crore as fuel subsidy for the December quarter, a move that will dent the firm's profitability, reports PTI.

Oil and gas producers ONGC and Oil India Ltd bear a portion of the losses that fuel retailers incur on selling some fuels at subsidised rates. The government also offers the oil refiners a cash subsidy as compensation.

The Oil Ministry this week asked ONGC and OIL to give Rs 15,937.59 crore to make up for 40% of the Rs 39,725 crore revenue that retailers lost on selling diesel, domestic LPG and kerosene at government-controlled rates in the October-December quarter, official sources said.

3:45 pm Market closing: The market ended on a flat note, after a volatile session. The Sensex was down 23.94 points at 20683.51, and the Nifty ended at 6126.2, down 9.60 points . About 1287 shares have advanced, 1226 shares declined, and 210 shares are unchanged.

 3:35 pm Stock call on Maruti: SP Tulsian of SP Tulsian.com told CNBC-TV18, advises to remain invested in Maruti Suzuki India . "I don't think that one should go by the quarterly numbers every time because we have been hearing the news of Suzuki contemplating to increase their stake in the company maybe to 75 percent. If that doesn't happen in the near-term, it is surely going to happen maybe in this next three-four months and again we will see some kind of news coming in," he said in an interview to CNBC-TV18.

He says that though there maybe some shrinkage in the margin but overall the bottomline is likely to be better, topline is going to show the growth. "We are seeing some kind of lull passing through the passenger vehicle segments but Maruti is the leader in that segment. If one wishes to go for the profit booking, Rs 1,800 and above could be the level where he/she can again review the investment," he added.

3:25 pm Commodity check: Brent futures rose to USD107 a barrel on Tuesday as the steepest fall in three weeks prompted fresh buying, with concerns of turmoil in emerging economies and a slowdown in China keeping the gains in check, reports Reuters.

Oil also drew support from expectations of a steep fall in US distillate inventories, which would indicate ongoing robust demand for heating oil because of bitter winter cold in northern countries. That helped crude futures diverge from Asian shares, which remained near five-months lows.

3:15 pm Bankers' take on the policy: Banks are unlikely to hike their lending and deposit rates on the back of the surprise rate hike by the Reserve Bank of India , says country's largest lender State Bank of India. The RBI unexpectedly raised its policy interest rate on Tuesday by 25 basis points (bps) but said that if consumer price inflation eases as projected, it does not foresee further near-term tightening. Although the move was unexpected, RBI Governor Raghuram Rajan softened its impact by saying he did not foresee further near-term tightening if consumer price inflation eases, according to a central bank statement.

It is a volatile day on Dalal Street as the Sensex slumped after an unexpected rate hike before recovering to trade with minor losses. The Sensex is down 8.22 points at 20699.23, and the Nifty slips 4.80 points at 6131.05. About 1252 shares have advanced, 1169 shares declined, and 212 shares are unchanged.

Rupee recovers from 10-week low and remained firm against the US dollar on account of dollar sales by some state-owned banks and foreign banks.

Maruti slumped 7 percent after announcing December quarter results. The country's largest car manufacturer third quarter net profit rose 36 percent year-on-year, driven by strong operational performance, higher localisation and favourable forex. Quarter-on-quarter growth was 1.6 percent.

"Higher localisation, favourable foreign exchange and cost reduction initiatives by the company contributed significantly to net profit," the company said in its filing.

The lag effect of rupee depreciation in second quarter was seen in the third quarter.

Numbers were not comparable on year-on-year basis due to the Suzuki Powertrain merger. Suzuki Powertrain was merged into Maruti on October 3, 2012, the results started to reflect from Q4FY13.

Other laggards in the Sensex are Axis Bank , Sun Pharma , Infosys and Cipla .

On the gaining side are metal stocks like Tata Steel and Hindalco . Tata Motors , Sesa Sterlite and Bajaj Auto are also gainers in the Sensex.

1:50 pm Buzzing: Shares of Idea Cellular slipped 4.5 percent intraday on Tuesday as its December quarter results were below estimates. The telecom company's operating profit margin declined 10 basis points sequentially to 31.1 percent. Consolidated earnings before interest, tax, depreciation and amortisation rose 4.3 percent to Rs 2,055.7 crore.

It reported 4.5 percent growth in net profit and 4.6 percent in revenues quarter-on-quarter. Year-on-year bottomline and topline grew 104.6 percent and 18.5 percent, respectively, driven by voice and data business. Profits included Rs 69.6 crore income from Indus Towers, wherein Idea holds 16 percent stake.

1:40 pm Market outlook: Nilesh Shah of Envision Capital believes the market is beginning to get a bit complacent thinking that ''worst is behind us''.

"The fact that there is virtually like a contagion in the emerging markets, more so on the currency side, something which has negatively surprise the market," he said. A lot of market participants are anticipating a pre-election rally. However, Shah feels it will all depend on where the market is at closer to election. "In this correction if the market goes below 20,000, election or no election, you should buy," he told the channel.

1:30 pm Results: Shares of Just Dial tanked over 17 percent intraday on Tuesday as its December quarter earnings disappointed with its operational performance on account of higher advertisement cost.

However, the search engine company's third quarter net profit increased 3.5 percent sequentially to Rs 29.7 crore, driven by a 28 percent jump in other income. Revenue rose 6.5 percent to Rs 120 crore in the quarter ended December 2013 from Rs 112.7 crore in previous quarter while total expenses jumped 11 percent quarter-on-quarter to Rs 90.77 crore. Other income during October-December quarter climbed to Rs 11.08 crore from Rs 8.65 crore on sequential basis.

The market is volatile after a knee jerk reaction post RBI announcement. The Sensex is down 54.25 points at 20653.20, and the Nifty is down 19.30 points at 6116.55. About 1081 shares have advanced, 1082 shares declined, and 230 shares are unchanged.

Rupee is slightly higher as foreign banks sell dollars.
In its third quarter review of monetary policy, the Reserve Bank of India surprises street by hiking repo rate by 25 basis points, reversing market expectation that the central bank will hold rates. RBI keeps cash reserve ratio (CRR) unchanged at 4 percent. Rajan says upside risks to central inflation forecast of 8 percent remain and forecasts FY15 growth in the range of 5-6 percent.

Axis Bank , HUL , Sun Pharma , Infosys , Hero MotoCorp are top losers in the Sensex. Among the top gainers are Tata Steel , Hindalco , Tata Motors , Bajaj Auto and M&M.

Brent futures rose to USD 107 a barrel as the steepest fall in three weeks prompted fresh buying, with concerns of turmoil in emerging economies and a slowdown in China keeping the gains in check.

Oil also drew support from expectations of a steep fall in US distillate inventories, which would indicate ongoing robust demand for heating oil because of bitter winter cold in northern countries. That helped crude futures diverge from Asian shares, which remained near five-months lows.

12:55pm Just Dial tanks 10%
Shares of Just Dial fell 10 percent as the company disappointed street with its operational performance.

Operating profit margin declined 340 basis points sequentially to 27.8 percent and operating profit slipped 6 percent to Rs 33 crore in the quarter gone by.

However, net profit increased 3.5 percent to Rs 29.7 crore from Rs 28.7 crore and revenue soared 6.5 percent to Rs 120 crore from Rs 112.7 crore Q-o-Q.

12:45pm Adani Ports talks to CNBC-TV18
Contrary to popular belief, Adani Ports and SEZ managed to improve realization per tonne by about 10 percent, says B Ravi, CFO, Adani Ports & SEZ. He expects this trend to continue.

He says there has been no drop in the port margins as such and it has been a very steady quarter on quarter.

Adani Ports and SEZ reported 24.76 percent growth in consolidated net profit at Rs 450.51 crore for the quarter ended December 31, largely due to nearly 5 times rise in its other income amid flat sales and increased costs.

12:35pm Maruti to deliver Q3 earnings today
According to CNBC-TV18 poll, analysts expect profit after tax of the car maker to fall 5 percent sequentially to Rs 636 crore.

Revenues are seen going up 4 percent to Rs 10,900 crore in the quarter ended December 2013 from Rs 10,468 crore in previous quarter.

Earnings before interest, tax, depreciation and amortisation (EBITDA) may decline 4 percent Q-o-Q to Rs 1,266 crore and operating profit margin may slip 110 basis points to 11.5 percent in the quarter gone by.

12:25pm Market Expert
In an interview to CNBC-TV18, Nilesh Shah of Envision Capital said that he believes the market is beginning to get a bit complacent thinking that ''worst is behind us''. "The fact that there is virtually like a contagion in the emerging markets, more so on the currency side, something which has negatively surprise the market," he said.

A lot of market participants are anticipating a pre-election rally. However, Shan feels it will all depend on where the market is at closer to election. "In this correction if the market goes below 20,000, election or no election, you should buy," he told the channel.  

12:15pm Kotak expects bond yields to consolidate post RBI policy

Lakshmi Iyer, chief investment officer (debt) and head - products at Kotak Mutual Fund said the RBI hiked the repo rate to 8 percent from 7.75 percent contrary to consensus view. "The forward guidance however has been a tad tamer where the RBI has indicated that if the disinflationary process evolves according to this baseline projection, further policy tightening in the near term is not anticipated at this juncture," he added.

"The policy measure taken today seems to set the path for disinflationary process thereby reducing the need for further rate hikes in the near term. This should augur well for the market which has in a way got some more clarity on the likely future course of action. We expect the bond yields to consolidate at the current levels," Iyer said.

12:05pm The market continues to remain under pressure in noon trade as RBI surprised street by raising repo rate and marginal standing facility rate.

The Sensex slips 67.48 points to 20,639.97, and the Nifty drops 21.20 points to 6,114.65. About 1027 shares have advanced, 999 shares declined, and 222 shares are unchanged.

Reserve Bank of India in its third quarter monetary policy review hiked repo rate, the rate at which banks borrow money from RBI, by 25 basis points to 8 percent. Accordingly, reverse repo rate, at which RBI borrows money from banks, increased by 25 basis points.

The central bank raised marginal standing facility rate, at which banks borrow funds overnight from RBI against approved government securities, by 25 bps to 9 percent while the bank kept cash reserve ratio, the amount of funds that the banks have to keep with the RBI, unchanged at 4 percent.

Axis Bank fell 2.5 percent followed by HDFC Bank and ICICI Bank with 0.7-0.9 percent loss. State-owned lender State Bank of India declines 0.2 percent.

11:50 am Measures: India imposed a 5 percent duty on exports of iron ore pellets, taking yet another step in conserving the raw material for domestic steelmakers that has slashed its shipments to top market China, reports Reuters.

India already levies a 30 percent tax on exports of iron ore fines and lumps since December 2011. Along with mining and export curbs in key producing states Karnataka and Goa aimed at addressing illegal mining, the tariffs have helped cut India's iron ore exports by around 85 percent, or 100 million tonnes, over the past two years.

Iron ore pellets had been exempted from any duty previously given negligible exports out of India.

11:40 am Stock in news: Drug firm Cadila Healthcare has decided to exit from its business in Japan following a strategic review of its business.

"The company has recently completed portfolio and strategy review of its business and has decided to exit from its business in Japan, which is through 100 percent subsidiary company," Cadila Healthcare said in a filing to the BSE.

11:30 am Market outlook: At the start of 2014, the country's stock brokerages are marking out lines for what this year could be like. Among the more bullish of the brokerages is Deutsche Equities, which has set out a target of 24000 for the Sensex for December this year. It means about a 15 percent upside, which would qualify as a good year after a string of ordinary years for the stock market.

Speaking to CNBC-TV18's Udayan Mukherjee, Abhay Laijawala, Managing Director - Head of Research, Deutsche Equities spoke about the brokerage's view on India and the road ahead as he sees it for equities.

11:20 am Result poll: Maruti Suzuki will announce its third quarter (October-December) earnings today. According to CNBC-TV18 poll, analysts expect profit after tax to fall 5 percent sequentially to Rs 636 crore. Revenues are seen going up 4 percent to Rs 10,900 crore in the quarter ended December 2013 from Rs 10,468 crore in previous quarter. Numbers are not strictly comparable on year-on-year basis due to the Suzuki Powertrain merger. Suzuki Powertrain was merged into Maruti on October 3, 2012, the results started to reflect from Q4FY13.

The Reserve Bank of India has surprised the market once again by hiking repo rate by 25 basis points (bps). A CNBC-TV18 poll of bankers and economists felt the central bank was expected to leave repo rate unchanged at 7.75 percent. RBI has hiked marginal standing facility (MSF) by 25 basis points to 9 percent and kept cash reserve ratio (CRR) unchanged. 

Just after the credit policy was announced, banking stocks started to slip, taking the Bank Nifty down over 1 percent. The Sensex is down 97.20 points at 20610.25, and the Nifty is down 28.25 points at 6107.60. About 994 shares have advanced, 786 shares declined, and 185 shares are unchanged.

Meanwhile, 10-year bond yields softened to as much as 8.71 percent after hovering around 8.75 percent in the past few days. HUL , ICICI Bank , Infosys , Axis Bank and Bharti Airtel continue to bemajor laggards.  Among the gainers are Bajaj Auto , M&M, Tata Motors , Reliance and ONGC .

10:55am NTPC to announce Q3 earnings today
According to CNBC-TV18 poll, analysts expect the company will get benefited from incremental return on equity on 3 percent higher commercial capacity, higher plant availability factor (PAF) at coal stations on better availability of domestic/imported coal.

Fuel cost savings remain on-track in Q3, but the sales from its high margin spot market may slow due to cap on volume/realisation.

Earnings

• Net sales may go up 6.2 percent at Rs 16,758 crore versus Rs 15,775 crore
• EBITDA is seen up 6.2 percent at Rs 4,245 crore versus Rs 3,995 crore
• EBITDA margin may be flat at 25.3 percent versus 25.3 percent
• PAT may go down 2.4 percent at Rs 2,534 crore versus Rs 2,597 crore

10:45am Rupee Update
The rupee gained 9 paise to 63 against the US dollar. Mohan Shenoi of Kotak Mahindra Bank sees the Indian rupee hovering in the tight range of 62.50/USD to 63.50/USD going ahead.

In an interview to CNBC-TV18, he said that the global risk-off sentiment is unlikely to continue and given that our CAD is now under control, the rupee won't depreciate further.

''In fact there could be some amount of delinking of the currency from other EM currency depreciation,'' he added.

10:35am Idea talks to CNBC-TV18
Idea Cellular, which reported its third quarter numbers on Monday, is focusing on investing more in data services going forward, said MD, Himanshu Kapania in an interview to CNBC-TV18.

Country's third largest telecom operator, Idea, reported 4.5 percent growth in net profit and 4.6 percent in revenues on sequential basis, missing analysts' expectations.

Quarter-on-quarter consolidated net profit for the company increased to Rs 467.7 crore (from Rs 447.6 crore) on revenues of Rs 6,613 crore (from Rs 6,323.3 crore) in the quarter ended December 2013. Revenues included 16 percent contribution from Indus Towers.

Kapania said: ''As our belief is at this point of time, there is a huge amount of work mobile operators have to do, to grow this business. Currently out of the overall industry which is at the size of Rs 1,65,000 crores not more then 9 to 10 percent of the revenue comes from wireless broadband. Therefore, significant investments need to be done to expand newer services and to offer the latest technology expanding.''

''For companies like Idea, we have to expand from a present regional operations of 3G to pan-India. We also have to make sure that as time passes by and demand for capacity increases, we have to roll out latest technology,'' he added.

10:25am Will RBI keep policy rates unchanged?
The Reserve Bank of India is likely to keep the key rates unchanged in its quarterly monetary policy on Tuesday, said a CNBC-TV18 poll of bankers and economists.

The majority of the candidates polled do not believe the RBI will announce any change in its stance for the rest of the financial year. Only 5 percent feel a 25 basis points repo rate hike can come through. Around 10 percent respondents see 25 bps hike and another 10 percent expect 25 bps cut till March-end.
 
After taking over the reins as the governor of the central bank, Raghuram Rajan, had raised rates twice. He, however, left the repo rate unchanged at 7.75 percent in the last monetary policy in December but said that he will keep an eye on inflation.
 
''Nobody should doubt our desire to fight inflation and our belief that interest rates are our main tool that we have. Nobody should doubt that,'' Rajan had said in December.
 
He said RBI will wait for the next set of data on inflation and industrial growth before taking a call on interest rates. ''We want to see data on how the work we have done so far is playing out and then we will take the next step,'' he had said, adding, ''Don't judge me by whether I raise interest rates in every meeting.''
 
10:15am FII View

Bharat Iyer of JP Morgan expects equity market to be rangebound near-term in the absence of meaningful catalysts.

"At 14.5x 12-month forward earnings, valuations are marginally higher than mean levels. Most importantly, the political situation remains fluid, particularly given the rising influence of AAP and the Congress's recent aggressiveness in the election campaign. If these trends gain momentum, markets could turn nervous into Q2CY14," he adds.

10:05am The market gained marginal strength today after a 666-point fall on the Sensex in previous two sessions. Interest rate sensitive stocks gained ground ahead of RBI policy.

The Sensex rose 60.90 points to 20,768.35, and the Nifty climbed 18.65 points to 6,154.50. The broader markets gained 0.7 percent as two shares advanced for every share declining on the BSE.

Country's largest lenders State Bank of India and ICICI Bank advanced 1 percent each while their rival Axis Bank too added 1 percent.

Housing finance company HDFC , top commercial vehicle maker Tata Motors , petrochemical major Reliance Industries and state-owned oil & gas company ONGC also gained 1 percent.

Maruti Suzuki soared nearly a percent ahead of its third quarter earnings today. Analysts expect profit after tax to fall 5 percent sequentially to Rs 636 crore while revenues are seen going up 4 percent Q-o-Q to Rs 10,900 crore in the quarter ended December 2013.

Engineering major Larsen and Toubro , and two-wheeler maker Bajaj Auto climbed a percent while Hindustan Unilever and ITC dropped 3 percent and 1 percent, respectively.

Other losers are Infosys , Sun Pharma , Bharti Airtel , Tata Power , Hindalco Industries and Wipro .

9:50 am Opinion:Calling the panic selling in emerging market (EM) currencies ''non-surprising,'' Peter Elston, head- Asia Pacific Strategy and Asset Allocation, Aberdeen Asset Management says the EMs will enter a bear market only if inflation edges higher. However, the redemption pressure from foreign institutional investors (FIIs) has bottomed out for India, believes Elston.

''The rupee now seems to have stabilised now. I am certainly not suggesting that the rupee cannot weaken further, but our expectation is that it won't and therefore we have probably seen the worst of the FII outflows,'' he adds.

9:40 am Poll: Key corporate earnings will hog limelight today after RBI monetary policy review at 11 am. In December quarter, Maruti Suzuki is likely to see a 4 percent rise in revenues sequentially. The auto major, however, is likely to see some margin weakness due to a big slump in exports and currency headwinds. The lagged effect of the rupee depreciation in Q2, too will be a hit to the Q3.

Among other companies, Jindal Steel Power Limited, JSW Steel , Sesa Sterlite and NTPC are expected to report their Q3 numbers.

9:30 am FII view: Bharat Iyer of JP Morgan, expects equity markets to be rangebound near-term in the absence of meaningful catalysts. At 14.5x 12-month forward earnings, valuations are marginally higher than mean levels.

"Most importantly, the political situation remains fluid, particularly given the rising influence of AAP and the Congress's recent aggressiveness in the election campaign. If these trends gain momentum, markets could turn nervous into Q2CY14," he adds.

After yesterday's carnage, the market opened on a flat note Tuesday. The Sensex is up 6.77 points at 20714.22, and the Nifty is down 4 points at 6131.85. About 197 shares have advanced, 84 shares declined, and 112 shares are unchanged.

SBI , Maruti, L&T, NTPC and Tata Motors are top gainers in the Sensex. Among the losers are Infosys , ITC , HDFC Bank , Wipro and HUL .

The rupee opened lower at 63.18 per dollar versus 63.10 Monday. The dollar regains a firmer footing against the yen, as expectations that the US Fed will scale back its stimulus further pulled the dollar off a seven-week low against the yen.Emerging markets currencies remain under pressure, though most analysts believe a full-blown crisis is unlikely at the moment.

Ashutosh Raina of HDFC Bank says, ''Markets expect a status quo from RBI , although a small hike cannot be ruled out.'' ''Dollar-rupee has performed much better as compared to its EM peers, but global sell-off resulted in the pair moving out of the 61-63/dollar range,'' he added.

''RBI intervention was mild and appeared top be more to contain volatility. Expect the rupee to trade in the range of 62.50-63.50/dollar today.''

The market will be keenly watching Reserve Bank of India's monetary policy. According to a CNBC-TV18 poll, most analysts expect RBI to maintain status quo on the rates front in its quarterly policy.

Globally, the US markets ended lower following uncertainity ahead of the US Fed's two-day policy meet that begins today. Europe too ended in the red while Asian markets are flat in morning trade.

In commodities, Brent Crude continues to hover around USD 107 per barrel. From the precious metals space, gold prices hold steady at around USD 1260 per ounce. Gold was steady on Tuesday after a sharp slide the session before, with investors worried of a stimulus cut this week.