Sensex ends flat, while Nifty closes below 10,000; midcaps underperform

3:30 pm Market Check: Equity benchmark began the week on a flat note, with the Nifty ending below 10,000-mark.

The Sensex closed up 32.67 points at 31846.89, while the Nifty ended higher by 8.00 points at 9987.70. The market breadth was narrow as 1,530 shares advanced against a decline of 1,186 shares, while 122 shares were unchanged.

BHEL, Dr Reddy's Laboratories, Yes Bank and Coal India were the top gainers, while ONGC, Reliance and Aurobindo Pharma lost the most.

3:25 pm Buzzing: Shares prices of pump manufactures rallied between 8 percent and 12 percent intraday after the fall in goods & services tax (GST) on water pumps.

On Friday, the government has reduced GST rate on water pumps to 18 percent from 28 percent earlier.

The stock price of Roto Pumps was quoting at Rs 112.15, up 6.51 percent while KSB Pumps was at Rs 740, up 2.84 percent and Shakti Pumps (India) was at Rs 503.15, up 3.25 percent.

3:19 pm Land Acquisition: CEAT – the flagship company of RPG Enterprise has closed a deal to purchase a 163-acre land parcel in Chennai to set up a radial tyre manufacturing plant and plans to invest approximately Rs 5,000 crore into this mega greenfield project in a phased manner over next five years.

This is their first plant in South India and is expected to create over 2,000 jobs in and around the region, boosting its overall socio-economic status.

''The primary reason for CEAT to choose Chennai – and specifically this land parcel - for this  investment was the proximity to OEMs like Hyundai, Renault Nissan, Ford, Daimler, KIA, Isuzu, etc,. The local skill availability, favorable incentive structure, ecosystem for tyre manufacturing and a very proactive Government machinery were also important influencing factors.

3:09 pm Debt reduction: Reliance Infrastructure (RInfra) announces the signing of business transfer agreement for transfer of its Western Region System Strengthening Scheme (WRSSS) transmission undertakings.

WRSSS B & C Undertakings are being transferred to its two subsidiaries as part of process of sale of the businesses to Adani Transmission.

Earlier in December 2016, RInfra has entered into share purchase agreement with Adani Transmission for sale of WRSSS valuing the businesses at Rs 1,000 crore.

All key approvals (CCI, CERC and lenders) have been obtained and transaction is expected to be closed shortly.

The entire sale proceeds shall be utilised for debt reduction, the company said.

2:59 pm Buzzing: Oriental Bank of Commerce share price fell 4 percent intraday after the Reserve Bank of India has initiated a 'prompt corrective action' against the state-run bank for high bad loans.

The move will place various restrictions on the public sector lender including on fresh loans and dividend distribution.

''The Reserve Bank of India...has put the Bank under Prompt Corrective Action (PCA) in view of high Net NPA (non- performing asset),'' the OBC said in its BSE filing.

It, however, added that the action will not have 'any material impact' on the performance of the bank and will contribute in overall improvement in its risk management, asset quality, profitability and efficiency.

2:48 pm IPO: Reliance General Insurance Company (RGIC) filed its draft red herring prospectus (DRHP) with the market regulator SEBI seeking permission for its initial public offering (IPO).

The IPO comprises of an offering of up to 6,70,79,979 equity shares of face value of Rs 10 each of Reliance General Insurance Company. The offer comprises of a fresh issue of up to 1,67,69,995 equity shares by Reliance General Insurance Company and an offer for sale by Reliance Capital of up to 5,03,09,984 equity shares.

The net proceeds from the fresh issue will be utilised for augmenting the solvency margin and consequently increase the solvency ratio.

It will also used issue proceeds for future capital requirements which are expected to arise out of growth.

2:38 pm Loan for green projects: Anil Ambani led Reliance Capital arm will get a loan assistance of Rs 300 crore from government body IREDA to utilise funds for on-lending to renewable energy sector.

"Reliance Money (a brand of Reliance Commercial Finance or RCFL) signs Rs 300 crore agreement with Indian Renewable Energy Development Agency Ltd (IREDA)," Reliance Money said in a statement today.

The company will use the funds for lending to its renewable energy and energy efficiency projects, it said in a statement.

"Our partnership with IREDA opens new opportunities for us to create solutions for renewable power sector," said Devang Mody, Executive Director and CEO, Reliance Commercial Finance Limited (RCFL).

2:24 pm Buzzing: Shares of Jain Irrigation Systems advanced 2.5 percent intraday on the back of order win worth Rs 84.50 crore.

The company's pipe division has bagged Bhusawal water supply project of Rs 84.50 crore from Bhusawal Municipal Council through national competitive bidding.

This project has received funding under the AMRUT scheme of the central government.

2:09 pm USFDA nod: Marksans Pharma share price rallied 8 percent intraday on receipt of establishments inspection report for Goa plant.

The Mumbai-based pharma company informed exchanges that it has received establishments inspection report from the US Food and Drug Administration for Goa facility.

The US health regulator had inspected this formulation manufacturing facility during April 3 and April 7, 2017.

1:59 pm Acquisition: Future Retail today said it has executed share purchase agreement (SPA) with Shoppers Stop for its Rs 655-crore acquisition of Hypercity Retail in stock-and-cash deal.

Last week, Kishore Biyani-led Future Retail Ltd (FRL) had announced that it would acquire Hypercity that operates 19 large format premium stores in some key cities from the K Raheja group firm Shoppers Stop.

Shopper Stop owns 51.09 percent stake in HRIL and rest is owned by the promoter group and others.

1:46 pm Earnings Preview: For the upcoming earnings season, Credit Suisse expects Q2 for pharmaceuticals to have another weak quarter.

It expects US sales to be impacted by the full quarter impact of Mckesson Walmart bidding, while sequential improvement will be driven by recovery in India post GST.

The global research observed that the companies which bucked the trend are Cadila and Alkem Labs. Additionally, Dr Reddy's Labs reported a weak Q1, but recovery in Q2 is not significant, it said.

On Sun Pharma, it expects earnings to be hit by notional forex loss at Taro, while Lupin could report weak September quarter.

Going forward, a recovery in India sales should help Cipla report sequential improvement, the brokerage house said in its report.

1:36 pm Earnings this week:

1:31 pm Market Check: Equity benchmarks as well as broader markets continued to consolidate in afternoon trade despite positive market breadth.

The 30-share BSE Sensex was up 37.76 points at 31,851.98 and the 50-share NSE Nifty gained 7.20 points at 9,986.90.

About 1,460 shares advanced against 1,039 declining shares on the BSE.

1:29 pm Sectoral performance: All sectoral indices barring PSU Bank traded in green.

Among PSU banks, Oriental Bank of Commerce, Bank of India, IDBI Bank, Andhra Bank, Syndicate Bank, Canara Bank, Allahabad Bank, SBI and Bank of Baroda were down up to 3 percent.

1:25 pm Earnings preview: The September quarter earnings season is unlikely to throw any surprise for IT sector. The revenue performance is likely to remain soft while sequential growth (dollar terms) is likely to be boosted by 50-150bp on account of a stronger Euro/GBP/AUD, BofA-ML said in a report.

Q2 is likely to cement FY18 as a year that did not witness the expected cyclical uptick with a) spends from major verticals like financial services and retail remaining weak and (2) at least some pockets of the market witnessing slower decision making in the first half of the fiscal amidst the political situation in the US, it said.

The global investment bank further added that the sequential growth (dollar terms) is likely to be boosted by 50-150bp on account of a stronger Euro/GBP/AUD.

1:11 pm Coffee exports data: Coffee exports from India, Asia's third-largest producer and exporter of coffee, rose by 9.36 percent to 3,76,873 tonne in the marketing year that ended September 2017, buoyed by higher global prices, according to state-run Coffee Board.

The country's coffee shipments stood at 3,44,613 tonne in the 2015-16 marketing year.

"Two factors contributed for higher shipments in 2016-17. Firstly, there was enough domestic supply to meet the export demand as the domestic output was record in 2015-16. Also, global prices were better," a senior Board official told PTI.

As a result, coffee exports remained robust both in terms of volume and value in 2016-17, he said.

12:59 pm GST Impact: The Development Bank of Singapore (DBS) expects policy fine-tuning from the Indian government -- on the lines of the Goods and Services Tax (GST) -- in coming weeks.

According to DBS, incoming high-frequency data are likely to improve. The index of industrial production for August -- due this week -- is poised to extend gains from July's 1.2 per cent, said DBS in its daily economic report today.

As GST-driven distortions fade, expectations are set on festive-driven demand, good monsoon, remonetisation and higher disposable income following an increase in wage or allowances to provide support to the production outlook, it said. Production in 2017-18 is likely to be around 2%, slower than last year's 4.6 per cent, added the Singapore banking group.

It saw more such pockets of improvement in high-frequency data prints, including core industries index, PMIs (Purchasing Managers Index) and auto sales. This should translate into a growth average of 6-7 per cent in the second half of 2017-18 after the trough in the June quarter, the bank stated.

12:48 pm USFDA approval: Shilpa Medicare share price rallied 5.1 percent intraday on establishment inspection report for Telangana unit.

The US Food and Drug Administration has issued an establishment inspection report (EIR) for the company's generic pharmaceutical manufacturing facility at Jadcherla in Telangana.

The plant was inspected between July 24 and July 28, 2017.

The company had submitted a detailed corrective and preventive action (CAPA) plan to the regulator within the stipulated timelines in response to the form 483 issued at the end of inspection.

"The US FDA has reviewed the CAPA and has found them acceptable," it said.

12:35 pm Europe trade: European stocks opened higher, with investors watching political instability in Spain and a meeting of European finance ministers in Luxembourg.

The pan-European Stoxx 600 was 0.2 percent higher with most of the sectors moving in positive territory.

Political instability in Spain continues to simmer away, with hundreds of thousands of protesters gathering in Catalonia's capital Barcelona over the weekend to protest against a resurgent independence movement that has been gathering steam in recent days.

12:22 pm Economic growth: Principal economic advisor, Sanjeev Sanyal, said that the government had expected ''some degree'' of downturn in the economy post reforms like demonetisation and GST and that the government expects a recovery early next year.

''We did expect some degree of downturn,'' said Sanyal adding ''when you are dealing with so many unprecedented measures, you have to expect unintended consequences''.

Batting for the government, he said that the government was ''aware'' of the slowdown, but it was all in good faith.

''We acknowledge the slowdown… (But) you need to see this in a wider context. Very major reforms have been rolled out very-very quickly,'' he said.

Talking to Moneycontrol, he said, ''Government expects the economy to recover by early next year''.

India's quarterly growth has been going southward after demonetisation. It fell from 7 percent during Q3 of FY17 to 5.7 during Q1 of FY18.

12:09 pm Buzzing: Granules India share price rallied nearly 4 percent intraday as Motilal Oswal believes the stock has the potential to deliver more than 50 percent return in the next 12-18 months on the back of multiple re rating and strong EPS CAGR of around 30 percent till FY20.

The research house has a buy call on the stock with a target price of Rs 200 per share as it expects 35 percent profit CAGR over FY17-20.

It said this strong growth will be driven primarily by ramp-up of the base business (led by capacity expansion), shift in product mix, Omnichem JV, and OTC business expansion.

11:56 am Order win: Shares of Kalpataru Power Transmission rose 2.5 percent intraday as it has received orders worth Rs 1,057 crore.

The company has secured new orders / notification of award of Rs 1,057 crore, including two orders of Rs 913 crore for design, supply and construction of 500 kV and 225/90 kV transmission lines in Thailand and Africa and an order for pipeline installation and associated terminal works of KSPPL for Rs 144 crore.

11:50 am Market Check: Equity benchmarks erased some gains amid consolidation in late morning trade as investors awaited second quarter earnings season that will begin tomorrow with South Indian Bank.

The 30-share BSE Sensex was up 40.58 points at 31,854.80 and the 50-sahre NSE Nifty gained 6 points at 9,985.70.

The market breadth remained strong as about 1,445 shares advanced against 958 declining shares on the BSE.

11:40 am Auto sales: Global brokerage houses retained their positive view on Tata Motors following Jaguar Land Rover's September sales data.

While maintaining outperform rating, Credit Suisse said sales volumes improved marginally and expects sharper improvement in second half of FY18.

It expects JLR volume growth at 15 percent in second half of FY18 against 4 percent in first half.

Nomura has maintained its buy rating with a target price of Rs 514, which implies 21.5 percent potential upside.

In FY18, the research house expects wholesale sales growth to remain healthy at around 9.8 percent YoY led by the ramp-up of the new RR Velar, launch of E-Pace/XE (Long wheel base) in Q4FY18 and RR Sport variants (in Oct-2017).

Jaguar Land Rover reported September 2017 retail sales growth of around 7 percent YoY to 65,097 units, largely in line with Nomura estimate. Jaguar sales increased around 4 percent to 18,336 units, while Land Rover was up around 7.7 percent YoY at 46,761 units.

11:27 am Management interview: The pre-sales for the second quarter were up 14.4 percent at Rs 592 crore versus Rs 518.2 crore for the same month last fiscal.

The company posted sales value which was highest in the last three years, said JC Sharma, Vice Chairman & MD, Sobha. This tells us that even while the macro environment was sluggish, if one were to focus on marketing and believe that underlying demand will be there, one will do succeed, he said, adding that this has taken place in all their markets in the last 9 months.

On the business outlook front, he said the EBITDA margins will be better than the last three years and the revenues too will be good. Moreover, company will be one of the beneficiaries of the goods and services tax (GST) transition, which will help aid their margins, said Sharma.

He also confirmed that the company would be working on affordable housing scheme.

11:12 am Divestment: Jindal Steel & Power (JSPL) share price gained 5.6 percent intraday after the company sold its oxygen plant assets at Raigarh and Angul units.

"JSPL has divested its oxygen plant assets at its integrated steel plants at Raigarh (Chhattisgarh) and Angul (Odisha), and received a total consideration of Rs 1,121 crore," the company said in its filing.

JSPL has consummated sale of oxygen plant assets at Rs 1,121 crore with SREI Equipment Finance.

Both companies have also entered into a lease back agreement of the oxygen plant assets for continued operations by JSPL for manufacturing of steel at the respective plants.

10:59 am IPO subscription: MAS Financial Services' initial share sale has been oversubscribed 1.5 times today, as per data available on exchanges.

The issue received bids for 1.07 crore equity shares against IPO size of 71.24 lakh equity shares, excluding anchor investors' reserved portion.

10:45 am Gold trade: Gold prices climbed to their highest in more than a week today as renewed concerns over North Korea's nuclear ambitions stoked safe-haven demand for the precious metal and weighed on the dollar.

US gold futures for December delivery gained 0.83 percent to USD 1,285.50 per ounce.

10:35 am Buzzing: Sobha share price rallied nearly 9 percent intraday as global brokerage house CLSA has maintained its buy rating on the stock with a target price of Rs 525 after strong pre-sales data.

The Bangalore-based real estate company during the second quarter achieved new sales volume of 8.61 lakh square feet total valued at Rs 675.1 crore with an average realisation of Rs 7,840 per square feet.

The company has achieved this growth without launching any new projects during the quarter.

This showed the growth of 5.6 percent and 8.3 percent in sales volume and total sales value compared with previous quarter, respectively while on year-on-year basis, sales volume was marginally higher and total sales value increased by 22.5 percent in Q2FY18.

Sobha said its share of sales value stood at Rs 592.7 crore (out of Rs 675.1 crore) with an average realisation of Rs 6,883 per square feet, up 5.3 percent QoQ and 14.4 percent YoY.

10:20 am Market Check: Equity benchmarks gained strength after early consolidation.

The 30-share BSE Sensex was up 93.76 points at 31,907.98 and the 50-share NSE Nifty rose 24.85 points to 10,004.55.

About 1,482 shares advanced against 654 declining shares on the BSE.

10:05 am Buzzing: Jewellery stocks rallied 2-20 percent after the Government withdrew its GST notification on gems and jewellery.

Gitanjali Jems, PC Jeweller, Titan Company, Tara Jewels and TBZ gained 4-7 percent as Permanent Account Number (PAN) card will no longer be mandatory on the purchase of jewellery for over Rs 50,000.

The government has taken this decision at its 22nd GST Council meeting on Friday.

9:55 am Rupee trade: The rupee went up 6 paise to 65.31 against the dollar today after the US currency found no takers among exporters and banks.

The dollar losing sheen against other currencies overseas supported the local unit, traders said. A higher start in domestic equities added to the upside, they added.

On Friday, the rupee had depreciated by 24 paise to end at 65.38 on persistent demand for the American currency from importers.

9:45 am Saudi Aramco deal likely next year: State-run oil giant Saudi Aramco is in talks with several Indian refiners and hopes to land a joint venture deal by next year, the company's chief executive told Reuters on Sunday.

Aramco, like other major oil producers, wants to tap rising demand growth opportunities and invest in the world's third biggest consumer.

"We are hoping to land on a JV sometime," Aramco's CEO Amin Nasser said at India Energy Forum by Cera Week in New Delhi.

Asked if a deal could be finalised next year, he said: "We hope so. We are in serious discussions."

Aramco wants to buy a stake in the planned 1.2 million barrels per day (bpd) refinery in India's west coast, India's oil minister said in June.

9:38 am GST Impact: Modi government's initiatives like Swachh Bharat, Goods and Services Tax (GST) and demonetisation are having desired impact, with the latter two resulting in increasing tax compliance and squeezing quantum of cash in the economy, Indian Finance Minister Arun Jaitley has said.

In his key note address – via video conference -- to the Berkeley India Conference, Jaitley said that there is public support to the reforms being undertaken by the governments of the day both at the Centre and state levels.

"I do hope that India is able to retain its growth rate once again and live up to the aspirations of its people because we must not forget that we not only have a large population to service, we have a very young population to service," he said.

9:32 am Asia trade: Most Asian markets traded higher as investors in Asia digested the release of China Caixin services PMI.

The S&P/ASX 200 rose 0.66 percent on broad-based gains across its sub-indexes. The Shanghai Composite surged 1.24 percent, shrugging off lackluster services data.

The Caixin services purchasing managers' index showed non-manufacturing activity in China expanded at its slowest levels in almost two years in September, Reuters said. The Caixin/Markit PMI stood at 50.6 last month, compared to the 52.7 figure seen in August.

Meanwhile, the Caixin composite PMI stood at 51.4 in September, below the 52.4 in August.

Hong Kong's Hang Seng Index was off 0.16 percent.

Japan, South Korea and Taiwan markets closed for public holidays

9:25 am IPO: Indian Energy Exchange's initial public offer has opened for subscription today, with price band of Rs 1,645-1,650 per share.

The issue will close on October 11.

The issue is an offer for sale of up to 60,65,009 equity shares by 11 shareholders, including Tata Power and Multiples Private Equity Fund.

The offer would constitute up to 20 percent of the post-offer paid up equity share capital.

Bids can be made for a minimum of 9 equity shares and in multiples of 9 equity shares thereafter.

The 50 percent of the total offer is reserved for qualified institutional buyers (QIBs); of which the company may allocate up to 60 percent of the QIB portion to anchor investors. Out of 60 percent to anchor investors, at least one-third is reserved for domestic mutual funds.

Further, 15 percent of the net offer is reserved for non-institutional bidders and 35 percent for retail individual bidders.

9:15 am Market Check: Equity benchmarks as well as broader markets were flat in opening trade despite positive Asian cues.

The 30-share BSE Sensex was down 12.67 points at 31,801.55 and the 50-share NSE Nifty fell 7.90 points to 9,971.80.

About two shares advanced for every share falling on the BSE.

SPARC plunged 13 percent as Baclofen GRS did not meet primary end point in placebo controlled studies. Bacoflen is a muscle relaxer used to treat symptoms caused by Multiple Sclerosis.

TBZ, Titan Company, Sobha, Shakti Pumps, Speciality Restaurants and Jaiprakash Associates rallied 2-6 percent. Adani Enterprises, OBC and VA Tech were down 2-4 percent.