Markets live: Equities end in green zone, rate hike risk lurks

3.30 pm: Indian markets closed near the low of the day with the BSE Sensex provisionally closing at 16,936, up by 60.29 points, while NSE Nifty trading at 5,085, up 10 points.

Banking stocks continued to be strong, with SBI trading at Rs 1,950, higher by 2.5 percent, while the banking index closed stronger, up 78 percent.

In a Reuters poll, 7 out of 12 analysts expect a further hike of 25 basis points in 2011.

Delta Corp has announced that it has entered into a sale agreement with the World Bank for sale of the property in Delta Centre for $22.8 million. The stock closed near the high of the day at Rs 110.15, creeping up 1.25 percent.

Jefferies, in its report on real estate sector, recommended Oberoi Realty with a target price of Rs 301. The stock closed the day at Rs 224, higher by 2.8 percent.

JP Morgan has downgraded Petronet LNG and Gujarat Gas in its report on the gas sector.

Meanwhile, in a sensitivity analysis on the proposed LPG supply cut, RBS has said if the supply is limited to six cylinders per year, under recovery on LPG, which currently stands at Rs 26,600 crore, will come down by Rs 19,870 crore.

2.45 pm: Indian markets continue to remain range-bound with the BSE Sensex trading at 17,038, surging 162 points. NSE Nifty is hovering at 5,122, up 48 points.

Banking stocks are looking up. SBI stock is now at Rs 1,950, moving higher by 2.75 percent. The banking index has also edged up 0.86 percent.

Financial Technologies is leaping as high as nearly 10 percent to trade at Rs 865. The company has recently announced its plans to list its multi-commodity exchange MCX.

Reports suggest the BHEL’s follow-on public offer (FPO) might be brought before that of ONGC. Despite uncertainty surrounding the ONGC offer, government officials are confident that divestment target of Rs 40,000 crore will be met.

Despite the strength in the index, market breadth continues to remain mixed with one share rising for one falling.

1.45 pm: Indian markets get the jitters after European markets erase their early gains of 1.5 percent. The western markets are now trading marginally in the red. BSE Sensex moves up 89 points to 16,966 while NSE Nifty is trading at 5,094, higher by 19 points.

In the meantime, Axis Bank board has approved Enam deal. It will pay Rs 274 crore in cash, equivalent to its book value, and a 5.7 to 1 share swap. Axis Bank is ruling at Rs 1,135, inching up by 1.7 percent.

Chief Economic Advisor Kaushik Basu has taken the line that he would have preferred a pause. Meanwhile, Eros International has hit a new high of Rs 253.65 as the market awaits the launch of ‘Ra One’. The company has recently tied up with KT Corp, South Korea’s No.2 mobile carrier, to showcase 50 of its film titles on multiple digital platforms. The company has just announced that it has finalised a sequel for ‘Tanu weds Manu’ .

Alfa Laval is the other stock that has scaled a new high on the announcement of the new Rs 74 crore order for an infant food manufacturing plant.

1.00 pm: Indian markets are showing some signs of stability after the central bank raised rates by 25 basis points. BSE Sensex is now at 17,051, up 194 points, while NSE Nifty is going strong at 5,120, ticking up by 45 points.

Tata Motors trades 7.56 percent higher at Rs 161.50 as the company posted better-than-expected international sales numbers. RBS, in its report, has termed the Jaguar Land Rover (JLR) August sales volume as “impressive” and maintains its ‘Buy’ rating with a 44 percent upside in the stock.

All the sectoral indices have again turned positive as euro fears are receding, which in turn is having a positive impact on Indian markets. European bourses are trading nearly 1.5 percent higher.

Nymex crude is trading lower by 0.5 percent at $89.25 a barrel. Meanwhile, business and consumer sentiments continue to fall in China.

12.30 pm: Markets have recovered from their lows after the central bank announced a rate hike of 25 basis points, in line with market expectations.

BSE Sensex is up 191 points at 17,068 while NSE Nifty jumps 46 points to 5,122. There is a distinct rebound in banking stocks, with SBI trading at the day’s high at Rs 1,938, up 2 percent. The banking index has also notched up gains, which is up 0.57 percent.

The RBI statement says inflationary pressures are expected to ease towards the latter part of 2011-12. Contrary to market expectations, the central bank has said higher inflation makes it imperative to persist with its current anti-inflationary stance. Moreover, there is still an element of suppressed inflation. Though global oil prices have moderated, the pass-through to domestic prices remains incomplete. Also, current administered electricity prices are yet to reflect increase in input prices, even though many states have rolled out such increases.

Food inflation is at near-double digit levels, despite normal monsoons, underlining the fact that it is being driven by structural demand-supply imbalances and cannot be dismissed as a temporary phenomenon.

All these point to a continuation of higher interest rate scenario. The bond yield is at 8.34 percent against 8.36 percent before announcement of the policy. Rupee is trading at Rs 47.46 against the dollar.

European markets have opened on a bullish note, trading around 0.9 percent higher.

12.05 pm: RBI hikes repo rates by 25 basis points to 8.25 percent. Reverse repo now stands adjusted at 7.25 percent.

BSE Sensex is trading at 16,962, still higher by 71 points. NSE Nifty pared its early gains and is now hovering at 5,091, up 4.7 points. BSE banking index is the biggest loser, 0.71 percent lower.SBI is at Rs 1,892, lower by 0.32 percent.

RBI sees downside risks to July growth projections. It maintains that inflation is above the comfort zone, significant pass-through of rising cost is visible. Pace of exports is unlikely to sustain weak demand. Importantly, the central bank thinks that it can’t dismiss food inflation as a temporary phenomenon.

Former governor of RBI says the central bank had little choice but to increase rates.

11.15 am: Markets have moved sharply lower as it awaits the RBI governor to present the mid-quarter review on monetary policy. BSE Sensex is trading at 16,876, a jump of 91 points, and the NSE Nifty at 5,104, up 29 points.

Gold , on the other hand, has seen the biggest weekly fall since 2009.

SRS, the company which made its debut on the market, is trading at Rs 37 against an issue price of Rs 58.

Thomas Cook in UK markets has surged 40 percent on the news of an international travel firm bidding for the company. The UK parent holds 77 percent in the Indian company. If the foreign player acquires the parent firm, it will automatically trigger the takeover code in India and it will have to make an open offer for the Indian entity. Thomas Cook’s Indian company was trading 10 percent higher at Rs 47.40.

Max India touches a yearly high of Rs 211.95.

George Soros said it’s imperative to prepare for the possibility of a default and defection from the euro zone by Greece, Portugal and Ireland.

10.30 am: Markets are moving in a narrow range near the high of the day, with the BSE Sensex trading at 17,066, up 189 points, and the NSE Nifty at 5125, up 50 points. With the RBI Governor expected to present the mid-quarter review on monetary policy soon, banking stocks stay range-bound.

Meanwhile, Kotak Securities has downgraded Maruti to ‘Add’ from its ‘Buy’ rating earlier as the broking firm thinks that the recent petrol price hike will affect buying sentiment during the upcoming festive season.

Essar Energy has said it is in talks with global oil majors, including Exxon Mobil, Chevron, Shell and ConocoPhilips, to acquire oil and gas assets in Africa, Latin America and Australia. Essar Oil is trading at Rs 95.25, an uptick of 1.35 percent.

Euphoria over the petrol price hike seems to have been short-lived with all oil marketing companies turning weaker.

10.00 am: Markets continue to show strength with the BSE Sensex trading 138 points higher at 17,103 and the NSE Nifty 36 points higher at 5,111. All the sectoral indices are moving in the upper circuit over the previous day’s close.

Meanwhile, the rupee rose on Friday for the second consecutive day, helped by sharp gains in the euro and domestic equities. Rupee was trading at 47.41/42 per dollar, much stronger than Rs 47.54/55 on Thursday.

Commenting on petrol price hike, Morgan Stanley says quarterly subsidy bill is likely to come down to $5.5 billion, which is sharply lower than the earlier estimates of $9.7 billion.

A report in The Times of India states that the government has allowed companies to raise yuan-denominated debt for the first time and raised overseas borrowing limits. The move will help companies cut down their interest costs as these will now be allowed to swap their high-cost loans. This however, puts pressure on Indian banks as companies will move away from them.

NTPC announced that it has commissioned a 3,500-mw power plant in Simhadri. The stock trades at Rs 168, up 2.13 percent.

9.25 am: Indian markets open higher with the BSE Index trading at 16,993, higher by 116 points, and the NSE Nifty trading at 5,110, up 33 points.

Among the top gainers were ONGC, which has moved up 5 percent and trades at Rs 274, Tata Motors, higher by 3.80 percent at 156.90, and Everonn hitting the upper circuit of 10 percent at Rs 333.05.

SBI is trading marginally lower at Rs 1,893 ahead of the RBI policy announcement.

Alstom Power, meanwhile, has approved a merger of Alstom Projects with itself. The result: The stock is trading higher by 1.31 percent at Rs 536.

Advance tax figures announced show Bank of Baroda paying 80 percent higher taxes while Ultratech Cement had a tax outgo that was 71 percent higher over the same period last year.Hindustan Unilever paid 33 percent higher taxes while SBI is noticeable among the lot as its tax outgo was lower by 11 percent.

SRS, which got listed on the BSE on Friday, trades at Rs 43 against an issue price of Rs 58.

9:05 am: A strong close in US markets and firm Asian cues may help Indian markets open on a positive note. Among the stocks to watch out for will be oil refining and marketing companies, which stand to benefit from last night’s price hike in petrol and aviation turbine fuel.

[caption id=“attachment_85292” align=“alignleft” width=“380” caption=“The Bombay Stock Exchange building. Reuters”] [/caption]

ONGC, however, is expected to be affected by a delay in its follow-on public offer (FPO).

RBI is expected to announce a 25-basis point hike in its mid-quarter review on monetary policy. Any deviation from the general expectation is likely to keep the market volatile.

Among other stocks to track are BHEL, which has won a Rs 3,000-crore order from Singareni Collieries, and Southern Petrochemicals (SPIC), which announced a sale of its phosphatic business.