Volatile Nifty holds 6150; banks gain ahead of RBI policy

Moneycontrol BureauLive Market Commentary

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.