Sensex ends flat, Midcap at record closing high; ONGC up 3%

It was another consolidation day for equity benchmarks on Wednesday but the broader markets outperformed frontline indices throughout the session.

The 30-share BSE Sensex fell 1.30 points to 28442.71 while the 50-share NSE Nifty rose 12.95 points to close at 8537.65. The BSE Smallcap Index gained 1.6 percent.

The CNX Midcap Index ended at record closing high today, up 1.5 percent as Eicher Motors (up 7 percent) and Bajaj FinServ (up 8 percent) were top contributors to midcap gain.

Experts feel the market may remain in a consolidation mode due to lack of triggers in near term. November inflation and October industrial output data will be the next triggers.

Rakesh Arora, Macquarie says despite the outperformance relative to global markets, the Indian market is still below previous valuation peaks.

He believes the market can re-rate further to 16-17x if economic recovery is stronger-than-expected. ''Our 12-month Nifty target is 9,940 based on 15x FY17e EPS,'' he adds.

Meanwhile, the Bombay Stock Exchange closed with a market capitalisation of Rs 100 trillion for the first time ever.

State-run oil explorer ONGC topped the buying list in the Sensex, up 3 percent after agencies report indicated that the government is considering reworking company's subsidy formula. According to the report, reworking subsidy formula could improve ONGC profitability.

Jindal Steel was the biggest gainer in the Nifty, up 8 percent as coal prices declined 50 percent, which is positive for steel companies struggling for coal.

BHEL was up 2.5 percent as the power equipment maker has successfully developed, manufactured and commissioned India's first phase shifting transformer Kothagudem Thermal Power Station in Telegana.

Utility vehicle maker Mahindra and Mahindra climbed 1.6 percent as CLSA maintains buy on the stock with a target price of Rs 1550. According to the brokerage, M&M's stock performance is now completely hinged on the market response to upcoming new products in FY16.

India's largest private sector lender ICICI Bank gained 1.3 percent ahead of ex-split date (Thursday). The current face value of the stock will be reduced from Rs 10 to Rs 2, which means one share will be dividend into five shares.

Among others, shares of Axis Bank, Hindustan Unilever, NTPC, Maruti Suzuki and Gail India advanced 1-1.7 percent whereas HDFC, HDFC Bank, Dr Reddy's Labs and Bharti Airtel declined 1-2.4 percent.

Hindalco Industries was down 1.5 percent as sources told CNBC-TV18 that the aluminium major may carve out plan to restructure Rs 63,000 crore debt. The debt restructuring could be undertaken in 3-4 phases, say sources.

In the broader space, Eicher Motors closed at record high of Rs 15,375, up 7.14 percent and TVS Motor gained 6.4 percent after Goldman Sachs resumed coverage on both the stocks with a buy. On TVS, Goldman has a 12-month target price of Rs 345 and on Eicher a 12-month target of Rs 19235.

Havells India (up 3.5 percent), Bajaj Electricals (up 5.5 percent) and Surya Roshni (up 16 percent) saw huge buying interest. CNBC Awaaz reports suggested that all government offices and municipal corporations will have LED lights.

Insurance companies such as Reliance Capital, Max India and Bajaj Finserv climbed 4-8 percent on news of FDI in insurance making headway. Reports indicated that the Congress has back key reforms measures and the draft report is expected in first 10 days of December after which the panel will approve. It will be tabled in the house thereafter.

Construction stocks like NCC, HCC, IVRCL, NBCC, Ashok Buildcon, Gammon India and Gammon Infrastructure rallied 5-7 percent as the government eased FDI rules for construction sector and DIPP released press note on FDI in construction development.

Telecom operator MTNL surged nearly 9 percent as Telecom Minister Ravi Shankar Prasad says there is no proposal for disinvestment of MTNL and BSNL. In fact, the government is in process of revitalising both companies, says Prasad, adding revival measures include merger of MTNL and BSNL and four groups formed to study BSNL and MTNL merger.

Among others, Essar oil, Sun TV Network, Texmaco Rail, Kalindee Rail, Siti Cable, Firstsource Solutions, Tourism Finance, Suzlon Energy and Engineers India shot up 6-20 percent.

However, Pratibha Industries was down 5.5 percent as Crisil downgraded the company's ratings to BB+ negative from BBB negative to reflect the expectation of continuing pressure on the group's financial risk profile. The company told CNBC-TV18 that its net debt stood at Rs 1,700 crore and it expects debt to be down by Rs 200-300 crore by end of 2015 via monetisation of non-core assets.

Shares of Steel Authority of India (SAIL) fell nearly 5 percent as sources told CNBC-TV18 that the government will conduct offer for sale (OFS) on Friday. The Government of India holds 80 percent stake in the steel maker, as of September 2014.

Advancing shares outnumbered declining ones by a ratio of 1926 to 1088 on the Bombay Stock Exchange.

03:30pm Market Closing
Equity benchmarks closed flat amid consolidation on Wednesday but the broader markets outperformed frontline indices. In fact, the CNX Midcap index ended at record closing high, up 1.5 percent.

The 30-share BSE Sensex fell 1.30 points to 28442.71 while the 50-share NSE Nifty rose 12.95 points to 8537.65. About 1926 shares have advanced, 1088 shares declined, and 117 shares are unchanged on the Bombay Stock Exchange.

Shares of ONGC, Cipla, BHEL, HUL, NTPC, Jindal Steel and Asian Paints topped the buying list, up 2-8 percent while Dr Reddy's Labs, HDFC, Bharti Airtel, Hindalco Industries, HDFC Bank and Zee Entertainment fell 1-2.5 percent.

Eicher and Bajaj FinServ were top contributors to midcap gain while major gainers on midcap index were Financial Technologies, Suzlon and Sun TV Network.

03:15pm Construction stocks in News
The government eased FDI rules for construction sector and DIPP releases press note on FDI in construction development. IVRCL, HCC, NBCC and NCC gained 5-10 percent.

02:55pm SAIL OFS on Friday?
The government will conduct SAIL's offer for sale (OFS) on Friday, reports CNBC-TV18 quoting unnamed sources.

Ministers' panel will meet tomorrow to fix floor price, say sources, adding there are no plans of the government to offer heavy discount to institutional investors.

CNBC-TV18 learnt that the government may provide limited discounts to retail investors and will communicate to stock exchanges today on OFS timeline.

02:30pm BHEL, ONGC in focus
BHEL has successfully developed, manufactured and commissioned India's first phase shifting transformer Kothagudem Thermal Power Station in Telegana. The stock gained 2.5 percent.
State-run oil & gas explorer ONGC climbed over 3 percent after agencies report indicated that the government is considering reworking company's subsidy formula. According to the report, reworking subsidy formula could improve ONGC profitability.

Another state-run company Oil India also saw buying interest, up 1 percent.

02:25pm RBI comfortable with current account deficit
The Reserve Bank of India is "reasonably comfortable" with the current account deficit because of lower oil prices, deputy governor HR Khan said, after the country last week unexpectedly eased some rules on gold imports.

"We are reasonably comfortable from the current account point of view because of oil," Khan told reporters in the sidelines of an event in Mumbai.

"So taking all that into account, a view has been taken that we'll give up this 80:20 (rule on gold imports)," Khan told reporters

India on Friday scrapped a rule mandating traders to export 20 percent of all gold imported into the country - in what had been known as the 80:20 rule. India will soon announce the current account deficit for the July-September quarter, reports Reuters.

02:00pm Market Check
The market remained lacklustre in afternoon trade with the Nifty trading in a 20 points range. The index advanced 13 points to 8537.70 and the Sensex rose 11.27 points to 28455.28.

The broader markets maintained strong momentum with the BSE Midcap and Smallcap indices gaining 1.6 percent each. About 1864 shares have advanced, 974 shares declined, and 107 shares are unchanged on the Bombay Stock Exchange.

Midcap auto stocks like Eicher Motors and TVS Motor saw heavy buying interest today after Goldman Sachs resumed coverage on both stocks with a buy. On TVS Goldman has a 12-month target of Rs 345 and on Eicher, a 12-month target of Rs 19,235.

Insurance companies such as Reliance Capital and Max India rallied 4-7 percent on news of FDI in insurance making headway. Reports indicate the Congress has back key reforms measures and the draft report is expected in first 10 days of December after which the panel will approve it and will tabled in the house thereafter.

Bajaj Electricals, Havells and Surya Roshni surged between 5-17 percent on a CNBC Awaaz exclusive news that all government offices and municipal corporations will have LED lights.

However, Pratibha Industries declined 5 percent after Crisil downgraded the company's ratings to negative to reflect the expectation of continuing pressure on the group's financial risk profile. The company told CNBC-TV18 that its net debt is at Rs 1,700 crore and it expects debt to be down by Rs 200-300 crore by end of 2015 via monetisation of non-core assets.

01:45pm Interview
The finance ministry seeks to extend the 5:25 scheme to all stalled infrastructure projects. The scheme is likely to help easing project and finance bottlenecks. It will also address issues related to the non-performing assets.

Speaking to CNBC-TV18, KK Mohanty, MD, Gammon Infrastructure says the 5:25 scheme is a positive step for infra companies and will be more effective at lower interest rates.

According to him, interest rate of construction projects is currently around 12 percent. Post 5:25 scheme, investors can earn returns at the start of the project.

The company is planning to implement the scheme for its new projects.

01:30pm MTNL in focus
Telecom Minister Ravi Shankar Prasad says there is no proposal for disinvestment of MTNL and BSNL.

In fact, the government is in process of revitalising both companies, says Prasad, adding revival measures include merger of MTNL and BSNL and four groups formed to study BSNL and MTNL merger.

01:00pm Market Check
Equity benchmarks gained marginal strength amid volatility, supported by banks, oil, auto, capital goods and select metals stocks. The Sensex rose 32.59 points to 28476.60 and the Nifty advanced 17.65 points to 8542.35.

The broader markets extended gains in afternoon trade. The BSE Midcap and Smallcap indices climbed 1.7 percent each. About two shares advanced for every share declining on the Bombay Stock Exchange.

Rakesh Arora, Macquarie says despite the outperformance relative to global markets, the Indian market is still below previous valuation peaks.

He believes the market can re-rate further to 16-17x if economic recovery is stronger-than-expected. "Our 12-month Nifty target is 9,940 based on 15x FY17e EPS,'' he says.

Shares of BHEL and Sesa Sterlite kept top position in the buying list in the Sensex, up 2.5-3 percent. ICICI Bank, Axis Bank, ONGC, Reliance Industries, Mahindra & Mahindra, State Bank of India and Maruti Suzuki gained 0.6-1.6 percent.

However, ITC, HDFC, TCS, Infosys, Dr Reddy's Labs, Bharti Airtel and Hero Motocorp declined 0.5-2 percent.

In the midcap space, Firstsource Solutions, Bajaj Electricals, Natco Pharma, Max India and Indian Bank climbed 7-12 percent while Sundaram-Clayton, Astral Poly, SpiceJet, Hindustan National Glass and Ramco Cements fell 2-4 percent.

12:55pm Ramco Systems in News
Nigeria's leading professional security solutions provider, Halogen Security has singed a multi-year contract with Ramco Systems to implement full-suite Services EPR to manage security solution operations of its 13000 plus guards across the region.

12:30pm Interview
In an interview to CNBC-TV18, Kapil Mehan, managing director, Coromandel International says the company's net interest margins (NIMs) are likely to improve by 40- 50 basis points (bps) on the steep fall seen in global crude prices.

Furthermore, Mehan says the company is not likely to have more than a 5 percent production impact on the damage caused by cyclone Hudhud.

12:00pm Market Check
It's another day of consolidation on Dalal Street as key indices took a breather and trade flat. Metals, capital goods, select auto and banks stocks gained while defensives like technology and FMCG stocks see mild losses.

The 30-share BSE Sensex rose 1.07 points to 28445.08 and the 50-share NSE Nifty advanced 9.35 points to 8534.05. However, the broader markets continued to outperform benchmarks with the BSE Midcap and Smallcap indices rising 1.5 percent each.

More than two shares advanced for every share declining on the Bombay Stock Exchange.

The Nifty could correct briefly over the next few sessions, but has a strong support level at 8460, says Vineet Bhatnagar, Managing Director, Phillip Capital.

In an interview with CNBC-TV18, Bhatnagar says there is a higher probability of the index moving towards 8630 by the end of this year.

Jindal Steel topped the buying list, up 7.53 percent followed by BHEL, Asian Paints, Sesa Sterlite, IndusInd Bank, Axis Bank, Mahindra & Mahindra and Maruti Suzuki with 1-3 percent gain.

However, Dr Reddy's Labs, HDFC, Zee Entertainment, ITC, Infosys and HDFC Bank lost ground, up 0.7-2 percent.

Asian equities turned mixed on account of profit booking. Indices in Japan and Shanghai moved off the multi-year peaks they hit in early trade. Europe too is expected to open higher. Brent is trading near USD 70 per barrel.

11:30am Oil Update
Oil rose more than 1 percent today with Brent climbing above USD 71 a barrel, recovering slightly from losses in the prior session as a turbulent market struggled to find a price floor.

The market has swung between sharp gains and losses since OPEC said last week that it would maintain steady output in an oversupplied market. Brent and US crude are down more than 30 percent since June and touched five-year lows on Monday.

Brent hit a high of USD 71.46 a barrel before trading up 62 cents at USD 71.16 by 0350 GMT, after falling USD 2 on Tuesday.

US crude was at USD 67.68 a barrel, off the day's high of USD 67.97 but up 80 cents from the previous session when prices dropped more than USD 2.

American Petroleum Institute data showing a bigger-than-expected fall in crude stocks supported US oil prices, reports Reuters.

11:00am Market Check
It is quiet day for the benchmark indices as the Nifty and Sensex consolidate while broader markets outperform. Globally, Asian markets trade mostly higher. Japan's Nikkei and China's Shanghai surge to multi-year peaks.

The Sensex declined 35.40 points to 28408.61 and the Nifty slipped 2 points to 8522.70. About 1684 shares have advanced, 745 shares declined, and 90 shares are unchanged.

Auto stocks are in focus today. Mahindra & Mahindra gained as CLSA maintains buy on the stock with a target price of Rs 1550. According to the brokerage, M&M's stock performance is now completely hinged on the market response to upcoming new products in FY16. The stock rallies 1.2 percent.

Tata Motors too sees buying. Jaguar Land Rover has begun building its plant in Brazil which will be the first fully owned factory outside UK. The company will invest USD 290 million in this plant and the first vehicle roll out is expected in 2016. The stock gains 0.6 percent.

In the broader space, Eicher Motors and TVS Motor gained 4-6 percent. Goldman Sachs has resumed coverage on both the stocks with a buy. On TVS, Goldman has a 12-month target price of Rs 345 and on Eicher a 12-month target of Rs 19235.

Moving beyond the auto space. Havells India and Bajaj Electricals gain 4-8 percent, reacting to a CNBC Awaaz exclusive news that all government offices and municipal corporations will have LED lights.

Insurance companies such as Reliance Capital gains 3 percent on news of FDI in insurance making headway. Reports indicate the congress has back key reforms measures and the draft report is expected in first 10 days of December after which the panel will approve. It will be tabled in the house thereafter.

Pratibha Industries loses 5 percent as crisil downgraded the company's ratings to BB+ negative from BBB negative. The company told CNBC-TV18 that it is comfortably servicing their debt as of today.

10:55am Services PMI at highest since July
Activity in India's services sector expanded at its fastest rate in five months in November, driven by surging new orders as firms cut prices on tumbling raw material costs, a business survey showed on Wednesday.

The outlook was clouded, however, by business confidence slumping to a more than seven-year low.

The HSBC Services Purchasing Managers' Index (PMI), compiled by Markit, rose to 52.6 in November. Growth in October had stalled at 50, the level that demarcates growth from contraction.

"Despite the uptick in order flows, business sentiment deteriorated, reminding us that continued policy action that addresses investor concerns is needed to sustain growth momentum," said Pranjul Bhandari, chief India economist at HSBC.

The new business sub-index accelerated to 52.5 in November, its highest since July, signaling improving demand as firms cut prices for the first time in over four years, reports Reuters.

10:25am Market Expert
The market will remain elevated till the Budget since most of the news momentum that will be flowing is expected to be positive, said Harendra Kumar of Elara Capital.

On specific stocks, he is positive on consumer-driven sectors. Also, the ongoing decline in global crude oil prices makes paint companies and PVP pipes companies attractive. He expects these stocks to head higher in the next six-12 months.

However, he is not too upbeat on oil marketing companies.

10:00am Market Check
Equity benchmarks continued to consolidate with the Nifty hovering around 8530 level while the broader markets outperformed frontline indices with the BSE Midcap and Smallcap indices rising more than a percent.
The Sensex fell 5.40 points to 28438.61 and the Nifty rose 3.35 points to 8528.05. Advancing shares outnumbered declining ones by a ratio of 1397 to 493 on the Bombay Stock Exchange.

The Nifty could correct briefly over the next few sessions, but has a strong support level at 8460, says Vineet Bhatnagar, Managing Director, Phillip Capital

In an interview with CNBC-TV18, Bhatnagar says there is a higher probability of the index moving towards 8630 by the end of this year.

BHEL topped the buying list, up more than 3 percent followed by State Bank of India, Mahindra & Mahindra and NTPC with more than a percent gain. Commercial vehicle maker Tata Motors rallied 1.7 percent on bagging orders for 1,542 Sumo Gold from police agencies. Shares of ICICI Bank, Axis Bank, Reliance Industries and ONGC were up over 0.4 percent.

However, index heavyweights ITC and Infosys fell 1.6 percent each. HDFC, TCS, Sesa Sterlite and Sun Pharma declined 0.3-0.8 percent. Dr Reddy's Labs lost 1.5 percent.

09:55am Monte Carlo IPO opens
Ludhiana-based woollen and cotton apparel manufacturer Monte Carlo Fashions (MCFL) has opened its public issue of 54.33 lakh equity shares for subscription today.

The company has fixed price band of Rs 630-645 per share or the issue, which will close on December 5, 2014. Bids can be made for minimum 23 equity shares and in multiple of 23 shares thereafter.

Monte Carlo, the apparel retail chain, aims to garner Rs 342-350 crore through the issue by diluting 25 percent shareholding.

There is no fresh issue of shares. Promoters (including Oswal family & members and other companies) will reduce their stake from 81.06 percent to 63.63 percent and Smara Capital, a Mauritius-based PE firm (through its affilliate, KIL had acquired stake in Monte Carlo in June 2012) will cut its shareholding from 18.51 percent to 10.94 percent through this issue.

09:30am Market Expert
Rakesh Arora, Macquarie says India's impressive return of 36 percent in 2014 year-to-date has been driven by 15 percent PE re-rating and 19 percent forward EPS growth.

''The current multiple of 15x PE and 3x P/B are a tad above long-term average and consistent with implied 6.5-7 percent GDP growth. Despite the outperformance relative to global markets, the Indian market is still below previous valuation peaks,'' he adds.

Arora says the brokerage believes the market can re-rate further to 16-17x if economic recovery is stronger-than-expected. ''Our 12-month Nifty target is 9,940 based on 15x FY17e EPS,'' he adds.

09:15am Market Check
Equity benchmarks opened flat on Wednesday despite positive Asian cues. The Sensex rose 9.05 points to 28453.06 and the Nifty climbed 6.85 points to 8531.55.

About 589 shares have advanced, 159 shares declined, and 33 shares are unchanged on the Bombay Stock Exchange.

Tata Motors, BHEL, Mahindra & Mahindra, Tata Steel, Bajaj Auto, Jindal Steel and Larsen & Toubro are top gainers in early trade, up 0.8-2 percent.

However, ITC lost 2 percent followed by Infosys, Dr Reddy's Labs, Sesa Sterlite, Gail India and Coal India with more than 0.5 percent loss.

In the broader space, BGR Energy, Havells India, Surya Roshni and Bajaj Electricals gained 5-10 percent. Max India and Reliance Capital gained 2-5 percent.

The Indian rupee opened flat at 61.87 per dollar today against 61.88 a dollar in previous session.

The dollar hovers at a seven-year high against the Japanese yen , following a broad rally overnight, thanks in part to a big rise in US yields.

Pramit Brahmbhatt of Veracity expects the rupee to trade rangebound to slightly weak tracking the local equity market movement. "Range for the USD-INR pair is seen between 61.50-62.30/dollar," he says.

On the global front, US stocks gained, with the Dow striking another peak, as investors cheered better-than-expected November auto sales. The CBOE volatility index, one measure of investor uncertainty, fell 10.1 percent to 12.85 percent.

Meanwhile, Asian markets traded higher with the Nikkei and Shanghai rising 1 percent each. Reports suggest that People's Bank of China may unveil a cut in reserve requirements for banks.

In commodities, crude prices stayed steady after industry data showed a larger than expected drop in crude oil inventories in the United States.