Nifty ends at 7109, Sensex flat; midcaps gain, PSU banks up

The market took a breather after breaking records for three consecutive sessions. The Nifty ended the session flat at 7109. This is the first time since June 2005 and only the fifth time in history that the Nifty has closed unchanged.

The Sensex was down 56.11 points at 23815.12. About 1683 shares advanced, 1206 shares declined, and 129 shares are unchanged.

The highlight of the day was Midcap and Smallcap indices which closed with over 1 percent gains, outperforming the benchmark indices by a huge margin. Metals and Realty indices gained the most with 3 percent and 4 percent respectively.

Analysts are wary of election outcome and warn that any unfavourable results may drag the market massively.

Raamdeo Agarwal, joint MD at Motilal Oswal Financial sees fair value of the Nifty at 7000 looking at the earnings estimate for current and next year. He warns investors not to put money into the market based on the number of possible seats the BJP might get on Friday.

Meanwhile Nilesh Shah of Envision Capital believes that for the near-term, market move clearly depends on the poll outcome. In case NDA gets close to 300 seats then there would be a fresh round of rally but consolidation is on cards post election euphoria. However, in case NDA gets below 250 seats then there would be a sell-off, and if they garner around 270 seats then the trade would be in favour of cyclicals, says Shah in an interview.

According to him, Sensex may go up 5-10 percent in the next 6-12 months but it won't be a fair value trade if it crosses 25000.

Stocks action
Metal stocks were piping hot at Dalal Street today. Just before announcing March quarter results, Tata Steel continued to charm investors and closed with a 6 percent gains. Coal India, Bajaj Auto, Sesa Sterlite and NTPC were other major gainers in the Sensex.

PSU Banks also saw good rally with gainers like Bank of Baroda, PNB, Canara Bank, Union Bank, Bank of India and Indian Bank. RBI-constituted committee led by PJ Nayak proposed that the Indian government should cut its stakes in state banks to below 50 percent.

Besides the PSU banks, Rashtriya Chemicals, EID Parry, Gujarat State Fertilisers and Chemicals and Sadhav Engineering were top gainers in the midcap space.

Capital goods, oil & gas, IT, pharma and auto index ended in red. M&M lost 3 percent on the back of multiple block deals on the bourses.

Dr Reddy's Labs closed down over 3.5 percent sulking over March quarter earnings. Its management sees limited growth in the US in FY15 but better growth in FY16.

MSCI will announce HDFC Bank's weightage in MSCI India index today which is likely to be reduced to 2 percent from 5.5 percent. The changes will be effective from June 2. This may lead to selling by passive funds. The HDFC twins were down 1-2 percent each.

Big fall was seen in BHEL today after massive rally in earlier sessions. Brokerage house Nomura has retained its 'reduce' call on it , citing fuel supply, over capacity and margins as the key concerns. Nomura has a target price of Rs 123 for BHEL.The stock price has more than doubled since last August when it had crashed to a low of Rs 100, as the market is betting on a revival in the investment cycle.

3:50 pm Asian markets: Japan's Nikkei average fell, slipping from a 1-1/2-week high on profit-taking after big gains the previous day, while JGC Corp tumbled after forecasting dismal profit. The benchmark Nikkei ended 0.1 percent lower at 14,405.76.

Engineering company JGC plunged 13 percent and contributed 17.55 hefty negative points to the Nikkei after saying it expects a net profit of 42 billion yen for the year ending March 2015, a 11 percent drop on year.

The broader Topix added 0.4 percent at 1,183.15 and the new JPX-Nikkei Index 400 advanced 0.4 percent at 10,767.97.

3:40 pm Market closing: After the fast and furious rally in last three trading sessions, market lost breath and was subdued through out the day. The Nifty ended at 7108.75,  exactly unchanged (from Tuesday) after nine years. The Sensex was down 56.11 points at 23815.12. Tata Steel gained 6 percent, followed by Coal India, Bajaj Auto, NTPC and Sesa Sterlite.

Among the losers were Dr Reddy's Labs, M&M and Reliance.

3:30 pm ECB rate cut: The European Central Bank is preparing a package of policy options for its June meeting, including cuts in all its interest rates and targeted measures aimed at boosting lending to small- and mid-sized firms (SMEs), reports Reuters.

Five people familiar with the measures being prepared detailed plans involving a potential rate cut, including the ECB's deposit rate going negative for the first time, along with the targeted measures SME measures.

The package offers some stimulus for the euro zone economy but falls short of the large-scale effect the ECB could unleash with a major programme of quantitative easing (QE) - money printing to buy assets. Such a QE plan is still some way off.

A June rate cut is "more or less a done deal", said one of the five sources who spoke to Reuters on condition of anonymity.

A second source echoed that sentiment, and added: "This will be the first major central bank to move to a negative deposit rate. That would move the exchange rate."

3:20 pm Houseviews: UBS maintains buy rating on the stock but reduced target to Rs 3110 from Rs 3200. The firm expects a lower target price as DRL's management sees limited growth in the US in FY15 but better growth in FY16.

In its concall yesterday, Dr Reddy's indicated that Ranbaxy will retain its 180 days exclusivity on Nexium as was the in case with Diovan and Valcyte. It's been close to two years in case of Diovan and more than eight months for Valcyte since the exclusivity should have commenced. However no other generic player has launched since it can launch only post Ranbaxy's 180 days exclusivity expires.

Nexium is prescribed to treat gastroesophageal reflux disease (GERD) and other conditions involving excessive stomach acid. Nexium has a total market size of USD2120mn and Ranbaxy can generate sales and PAT of USD170mn and USD71mn respectively during exclusivity period.

3:10 pm Market check: The market is no mood to budge as the Sensex is down 57.79 points at 23813.44, and the Nifty is down 3.60 points at 7105.15. About 1589 shares have advanced, 1254 shares declined, and 125 shares are unchanged.

Dr Reddy's Labs has slumped further. M&M, HDFC twins and BHEL are majr laggards in the Sensex.

3:00 pm International markets: Robert Parker of Credit Suisse said he expects to see an acceleration in US growth numbers, likely to exceed 3 percent on an annualised basis, in the second and third quarter.

On Indian markets, he said that compared to other markets, particularly China, India is somewhat overvalued. However, he does not see any reversal in the Indian market unless there's a major political upset.

"I think there is a very high probability that the second quarter and the third quarter growth number annualised will be in excess of 3 percent. So, that is positive number one. Positive number two is if you do an analysis of first quarter corporate earnings results, they generally exceeded expectations and that has pushed funds, investor funds into the S&P and US equity market," he said.

2:50pm Rejig concerns for HDFC Bank
MSCI will announce HDFC Bank's weightage in MSCI India index today which is likely to be reduced to 2 percent from 5.5 percent. The changes will be effective from June 2. This may lead to selling by passive funds. The stock was down 1.5 percent.

2:40pm Tata Steel hits 52-week high ahead of results
Prabhudas Lilladher expects Tata Steel to report a 169.7 percent growth quarter-on-quarter in net profit at Rs 1356.2 crore. Sales are expected to increase by 6.1 percent Q-o-Q (up 12.5 percent Y-o-Y) to Rs 38977.1 crore. The stock was up 5 percent. Read more

2:30pm IVs in Nifty Options surge
The Implied Volatility (IVs) in Nifty options surged to 38-40 levels for out of the money call options after falling to 36 levels yesterday. Nifty 7300, 7500 and 8000 calls added over 5 lakh shares in open interest each.

2:20pm FIIs step up buying of Indian shares
Overseas investors have bought cash shares and index futures worth Rs 6339 crore (USD 1.06 billion) in the three sessions from Friday to Tuesday.

Foreign investors bought cash shares worth Rs 4500 crore (USD 752.76 million) and index futures worth Rs 1840 crore in the previous three sessions, as per Reuters report.

2:10pm GSFC hits 16-month high, up 8%; Q4 net rises 129%
Shares of Gujarat State Fertilisers & Chemicals (GSFC) hit 16-month high at Rs 67.40, up 8.5 percent intraday on Wednesday. Its March quarter earnings impressed the street with net profit growing 129.5 percent at Rs 134 crore year-on-year. Read more

2:00pm The Nifty was trading absolutely flat today amid low volumes in absence of cues from domestic and global front. After exit polls prediction of NDA's victory with majority, it is now awaiting confirmation from the actual results on May 16. European markets too opened flat in trade today.

The Sensex was down 29.05 points or 0.12 percent at 23842.18 while the Nifty was up 1.95 points or 0.03 percent at 7110.70. About 1486 shares advanced, 1264 shares declined, and 110 shares were unchanged.

Bank of Baroda touched fresh 52-week high today and was up 8.07 percent. Tata STeel was up 5 percent ahead of its earnings. Jindal Steel (up 4.52 percent), DLF (up 3.97 percent) and PNB (up 3.72 percent) also gave them company.

Top losers in the Nifty were M&M (down 4.09 percent), Dr Reddys Labs (down 3.02 percent), HCL Tech (down 2.29 percent), HDFC (down 1.81 percent) and BHEL (down 1.67 percent).

1:50 pm Ratings: With the exit polls indicating a stable majority for the NDA, Thomas Rookmaaker, Director, Asia-Pacific Sovereign Ratings, Fitch Rating says that rating action will depend on the way policies play out; particularly policies such as fiscal consolidation.

The credit rating agency pegs FY15 GDP growth target at 5.5 percent and 6 percent for FY16 without factoring in possible El Nino impacts.

Rookmaaker feels India's current account deficit stands better amongst peers, which in turn is helping its external position to remain strong, he says in an interview with CNBC-TV18

1:40 pm Buzzing: Shares of Gujarat State Fertilisers & Chemicals (GSFC) hit 16-month high at Rs 67.40, up 8.5 percent intraday. Its March quarter earnings impressed the street with net profit growing 129.5 percent at Rs 134 crore year-on-year.

Margins were at 13 percent while EBITDA was up 104 percent on yearly basis. However, 30 percent in fertiliser products dented sales growth. During the period, sales were subdued with a fall of 10.5 percent (Y-o-Y) at Rs 1518 crore.

Managing director Atanu Chakraborty said the company is confident of sustaining margins and profits going forward. He sees a likely improvement in the fertiliser sector and in industrial products on good sales of new products.

1:30 pm Road developers' wishlist: According to KK Mohanty, MD of Gammon Infrastructure the new government has to reinstall faith in its decision-making and governance process. He says people have lost confidence in the government agencies' ability to carry out infra projects transparently and without any prejudice. He believes ailing private project developers must not be bailed out by the government. ''Public sector bureaucracy has to be reenergized for faster decisions,'' he said.

He also feels the pre-construction role of NHAI needs to be ramped up. Along with the pre-construction, Brijeshwar Singh, former chairman of NHAI  says, the road regulator needs to also take on a post-construction role. He says the PPP model works well in areas with heavy traffic but most of them have been taken up. There are not too many roads with heavy traffic left for PPP. The BJP manifesto has highlighted the need for coastal and border highways. Singh believes these will have to be done on a non PPP mode. ''We are going to see a lot more EPC and annuity-type projects, which I think is the way forward,'' he said.

1:20 pm Shares of Nestle India slipped over 2 percent intraday as investors were disappointed about its March quarter earnings. The FMCG major's net profit declined 7.14 percent to Rs 259.16 crore in the first quarter ended March 31.

CLSA has an underperform rating on the stock with a target of Rs 5100 per share. Adding that its earnings decline was sharpest in past 32 quarters, CLSA said that margin focus has impacted growth rates.

The market takes a breather after yesterday's strong upmove. Nifty falls below 7,100, the Nifty is down 17.90 points at 7090.85. The Sensex is down 91.45 points or 0.38% at 23779.78.

About 1387 shares have advanced, 1250 shares declined, and 111 shares are unchanged.

In broader markets, midcaps and smallcaps outperform benchmark indices.

Tata steel may report 18 percent revenue growth led by higher volumes in Europe. The company may post a profit of Rs 920 crore versus a loss of Rs 6,677 crore. In other key earnings, Asian Paints may see a revenue growth of 14 percent but margins are likely to remain flat.

BHEL is under pressure after brokerage firm Nomura says that concerns on fuel supply, overcapacity and margins will remain. Nomura cut target price as even with quick and speedy reforms, the company is unlikely to revive earnings trajectory soon.

12:50pm Dr Reddy's slips 3%: Why analysts advise to buy it post Q4?
Shares of Dr Reddy's Labs continued to slip for second day after it announced March quarter earnings. It slipped 3 percent intraday on Wednesday.  So, how to trade the stock now?

12:40pm Big Winners
Stocks like BGR Energy, Indiabulls Housing, UB Holdings, Va Tech Wabag, GSFC, Prism Cement, Indian Bank, Central Bank, Canara Bank and Indiabulls Real were up in the range of 5 to 13 percent.

12:30pm Buzzing stock: Bank of Baroda touches fresh 52-week high
Bank of Baroda has touched a fresh 52-week high today and was up 9 percent. Religare maintains buy rating on the stock with a revised target of Rs 975 per share. Its Q4 beat estimates with strong advances growth, lower slippages, and strong core fee income. Read more

12:20 Market Outlook: Nifty fair value at 7000; bet on past winners, says Raamdeo Agarwal

Agarwal sees the fair value for the Nifty at 7000 looking at the earnings estimate for current and next year. He advises investors to buy into high quality stocks, like Cummins and Bosch at reasonable price.  Read more 

12:10pm Profit booking in broader market
Stocks like Manappuram Finance (down 4.26 percent), Tata Coffee (down 4.05 percent), Hatsun Agro (down 3.7 percent), ILandFS Trans (down 3.06 percent), Vascon Engineer (down 4.28 percent), TD Power System (down 4.18 percent) and NCC (down 4.11 percent) were big losers in the broader markets

12:00pm It was a dull session for the market after three blockbuster sessions of one-side rally taking benchmark indices in to uncharted territories.

BSE Capital goods index was the top loser with loss of over 1 percent. Oil& gas stocks also witnessed some profit booking. Realty and metal stocks saw massive buying in trade today.

The Sensex was down 38.23 points or 0.16 percent at 23833.00, and the Nifty was down 8.00 points or 0.11 percent at 7100.75. The breadth of the market was positive. About 1379 shares advanced, 1096 shares declined, and 113 shares were unchanged.

Top gainers in the Sensex were Tata Steel (up 3.07 percent), Bajaj Auto (up 2.18 percent), Hindalco (up 2.00 percent), ITC (up 1.09 percent) and Cipla (up 1.09 percent)

Dr Reddys Labs shed another 3 percent in trade today. M&M (down 2.32 percent), BHEL (down 2.31 percent), Larsen (down 1.27 percent), Reliance (down 1.12 percent).

12:00 pm Results: FMCG major Nestle India posted a 7.14 percent decline in net profit to Rs 259.16 crore in the first quarter ended March 31. The company had posted a profit of Rs 279.09 crore in the January-March quarter a year earlier.

Net sales rose to Rs 2,313.46 crore from Rs 2,248.08 crore in the same period of the previous year, Nestle India said in a BSE filing.

"The first-quarter results are broadly as expected and in line with our strategy, which was alluded to in my comments while announcing the full year 2013 results," Nestle India Managing Director Etienne Benet said.

He said Nestle would continue to take decisions to move towards being a leader of nutrition, health and wellness in India.

11:50 am Exclusive: Former State Bank of India chairman and managing director Pratip Chaudhuri feels there are enough safeguards in place to ensure that boards of state-owned banks do a good job.

In an interview to CNBC-TV18, Chaudhuri said boards of PSU banks were reasonably professional as of now. On whether the recommendations of the PJ Nayak panel on governance of bank boards would be accepted, Chaudhuri said it would depend on the political leanings of the next government.

Nayak-led panel, among other things has recommended that government holding in PSU banks be brought below 50 percent.

11:40 am House views: Brokerage house Nomura has retained its 'reduce' call on Bharat Heavy Electricals , citing fuel supply, over capacity and margins as the key concerns. Nomura has a target price of Rs 123 for BHEL. The stock price has more than doubled since last August when it had crashed to a low of Rs 100, as the market is betting on a revival in the investment cycle.

''We continue to believe that even with quick and speedy reforms, order activity and earnings trajectory for BHEL are most unlikely to revive in several quarters to come,'' said the Nomura note to clients.

Brokerage house Nomura has retained its 'reduce' call on Bharat Heavy Electricals , citing fuel supply, over capacity and margins as the key concerns. Nomura has a target price of Rs 123 for BHEL. The stock price has more than doubled since last August when it had crashed to a low of Rs 100, as the market is betting on a revival in the investment cycle. ''We continue to believe that even with quick and speedy reforms, order activity and earnings trajectory for BHEL are most unlikely to revive in several quarters to come,'' said the Nomura note to clients.

11:30 am Market outlook: Putting money into the market based on the number of possible seats the BJP might get on Friday is something speculators should do, not long-term investors. That's the word coming in from Raamdeo Agarwal, joint managing director at Motilal Oswal Financial Services, who believes any dips right now should be used to buy one's preferred stocks aggressively. A

Agarwal sees the fair value for the Nifty at 7000 looking at the earnings estimate for current and next year. He advises investors to buy into high quality stocks, like Cummins and Bosch , at reasonable price.

Profit booking seeps in the market after the strong rally in last three trading sessions. The Sensex is down 45.16 points or at 23826.07, and the Nifty is down 2.60 points at 7106.15.

About 1263 shares have advanced, 979 shares declined, and 113 shares are unchanged.

Tata Steel is up over 3 percent ahead of announcing its March quarter earnings. Bajaj Auto, Hero Motocorp, Hindalco and NTPC are top gainers in the Sensex. Among the losers are BHEL, Dr Reddy's Labs, Maruti and ONGC.

Asian markets trade mixed today as lack of a strong finish on Wall Street weighed on sentiment. China is lower for the second day running while the Kospi trades at 3 week highs

Commodities saw gold prices rise marginally but still sub 1300/ounce. Crude moved up with Nymex at USD 102 and brent at USD 109 per barrel on the back of expectations of oil stock piles falling to record lows last week

The dollar index traded above 80 with the euro languished at 5 week lows.

10:50am Selective PSU stocks rally
Selective PSU stocks like BEML, SAIL, IOB, Central Bank surged three to six percent today.

10:40am Election Exchange Update
Bhupendra Chaubey of CNN-IBN told CNBC-TV18 that BJP's top brass is meeting in Gandhinagar today and likely to discuss contours of the next government. Arun Jaitley may be discussed for finance minister post while Sushma Swaraj being considered as defence minister.

10:30am Profit booking in selective stocks
Profit booking was happening today in selective stocks like Tata Coffee, M&M, Kalpataru Power, TVS Motor, Manappuram Finance, Shasun Pharma and BHEL.

10:20am MUST READ: Why is SBI going easy on Kingfisher?
The country's banking sector may be reeling under its worst non-performing assets (NPA) crisis in a long time but it does not appear to have added to any sense of urgency to state-run State Bank of India's approach towards handling one of its key non-operative accounts. Read more

10:10am Adani group stocks at 52-week high
Adani group stocks like Adani Enterprises and Adani Ports were trading at fresh 52-week high. Adani Enterprises was up 6 percent while Adani Ports was up 2 percent.

10.00am It was a muted session for the market as Sensex was trading flat after stellar rally of 1500 points in last three trading sessions. The Nifty was trading above 7100 mark while Sensex was trying to inch closer towards 24000.

The Sensex was up 37.49 points or 0.16 percent at 23908.72, and the Nifty was up 19.05 points or 0.27 percent at 7127.80. About 1072 shares advanced, 577 shares declined, and 80 shares were unchanged.

Top gainers in the Sensex were Tata Steel (up 2.17 percent), Bajaj Auto (up 2.16 percent), NTPC (up 1.63 percent), ITC (up 1.33 percent) and Hero Motocorp (up 1.03 percent).

M&M was top loser in the Sensex with loss of 2.39 percent followed by BHEL (down 1.97 percent), Dr Reddys Labs (down 1.47 percent), ONGC (down 1.32 percent) and Infosys (down 1.19 percent)

10:00 am Nayak panel: The PJ Nayak-led panel on governance of bank boards has recommended that public sector banks should be answerable only to the RBI, and not to both RBI and the Finance Ministry as is the case now. This would provide a level playing field for state-owned banks vis--vis their private sector counterparts, the panel said.

''All regulatory functions of the Government need to be moved forthwith to RBI, freeing the public sector banks of dual regulation,'' the committee said in its report.

The government periodically issues instructions to public sector banks, which have to do with regulations, as well meeting social objectives.

Last October, the Finance Ministry had asked public sector banks to offer cheaper loans for customers wanting to buy automobiles and consumer durables, in an effort to boost demand in the economy. But even more damaging was the interference by the Finance Ministry in 2008 when it asked PSU banks to waive off Rs 76,000 crore worth of outstanding loans to farmers.

9:50 am Volatility check measures: Concerned over the sudden spurt in stock markets ahead of poll results, Finance Minister P Chidambaram Tuesday asked regulators, including Sebi and RBI, to remain alert and take necessary actions to curb excessive volatility.

Sebi Chairman U K Sinha on his part sought to calm the markets saying regulations are in place to curb any excessive volatility and the regulator in keeping a very close watch on stock movements. Emerging from the meeting of the FSDC, where the volatility in stock markets figured during discussions, RBI Governor Raghuram Rajan said the central bank is prepared to deal with any kind of eventuality that may occur over next few days.

Over last three trading sessions, the BSE benchmark Sensex has rallied over 1,500 points and the NSE's Nifty nearly 450 points. The markets are expected to remain volatile in view of the results of the general elections which will be announced on May 16.

9:40 am Stock action: After a heavy rally in last two session, BHEL is losing steam. The stock fell over 3 percent intraday. Anaylsts argue that BHEL's profit decline is likely to continue and order book depletion is big cause of worry as it is not booking enough orders. Pricing environment also is tough.

9:30 am Market outlook: If NDA gets less than 230 seats, it will be a rude surprise for the market and it will see a correction, says Nirmal Jain of IIFL. But if all goes as per expectations and the NDA does come to power with a decisive mandate, Jain sees the Sensex touching 30000 points by year end. However, it will depend on a stable government and also good policy measures which are business and investment friendly.

According to him, the top agendas of the new government would be infusing positive sentiment, decisive and clear policy making and removing hindrances to investment.

"If most of the things turn positive as we are expecting today then Sensex can touch 30000 by year end. It will again depend on stable government and also good policy measures which are business and investment friendly because in Indian context investment friendly policies are required to trigger employment as well as economic growth. Then by year end corporate earnings will look significantly better for FY16. So, that is the one optimistic scenario that Sensex can touch 30000 by year end," he said.

After heavy buying seen on Tuesday, the market seems to have taken a breather today. The Sensex is up 11.48 points at 23882.71, and the Nifty is up 3.25 points at 7112.00. About 386 shares have advanced, 91 shares declined, and 22 shares are unchanged.

M&M, ICICI Bank, Tata Motors, Maruti and Infosys are top losers.Tata Steel, ITC, Cipla, Sun Pharma and NTPC are big gainers in early morning.

On the global front, US stocks ended mixed, with the S&P 500 crossing 1,900 for the first time, as disappointing April retail sales were offset by an upward revision for the prior month and an upbeat gauge of small business sentiment.

In Europe, markets closed higher as investors mulled on hopes of new measures by the European Central Bank to be announced soon.

In the currency space, disappointing US retail sales data for April pulled the dollar off a one-month high against the euro on Tuesday but it was still stronger versus the euro, which was undermined by a sharp decline in investor morale in Germany, Europe's largest economy.

Indian debt and FX markets are closed on account of Buddha Purnima. Trading will resume on Thursday.

In commodities, crude oil prices climbed to two-week highs on expectations for another draw on stocks at contract's delivery point. Meanwhile, Brent edged up, as traders doubted that Libyan oil exports would soon rebound.

From precious metals space, gold rose marginally as the metal is often seen as a safe-haven investment at times of political uncertainty. Meanwhile platinum and palladium retained its sharp gains made overnight on worries that increasing labor tensions in major producer South Africa could hurt supply.