Sensex, Nifty volatile; HDFC Bank, Coal India extend losses

FMCG major Dabur, which is focusing on the rural market, said the company has been witnessing a small uptick and expects the rural momentum to pick up by fourth quarter of the current year. The company expects to hold on to margins for FY14 and doesn’t see any cuts in advertising costs for the fiscal.

Talking to CNBC-TV18, Sunil Duggal, CEO, Dabur, said the company is looking at 14 percent ad spends as a percentage of sales for FY14 and expects around 10 percent volume growth and 15-17 percent top line growth. It is even looking at small international acquisitions to enhance portfolio.

Dabur India's stock was trading at Rs 167, up 0.54 percent over previous close on the BSE.

Manishi Raychaudhuri of BNP Paribas Securities is constructive on Indian equities at this point. But for one to take an aggressive call on India, investment climate needs to improve and corporate confidence needs to return, he told CNBC-TV18 in an interview.

Alluding to other macro-economic concerns, he said that fiscal stability needs to be more entrenched and sustainable and inflation, which continues to be sticky, needs to be brought down. 

Globally, the much-awaited FOMC meet, which will decide the future course of QE programme has begun today. While many market experts are betting on a December taper, Raychaudhuri sees the US Fed withdrawing monetary stimulus in March next year. He cautions of volatility in Asian markets once taper starts. 

Meanwhile, sharing his expectations from the upcoming RBI policy, he said that the market seems to have factored in a 25 bps rate hike, but one should be prepared for another round of rate hikes in January policy given that inflation is above RBI’s comfort zone. He further added that the liquidity situation will continue to be tight for some more time.

Cipla and Ranbaxy are top gainers on the Nifty today, rising 3 percent and 4 percent, respectively.

Cipla received approval for an asthma drug which is a limited competition drug for the company with around 3-4 players while Ranbaxy received approval for Plendil generic which is used to cure hypertension.

After hitting a life-time high of Rs 2,960, GSK Pharma is trading at Rs 2,941.40 apiece, up 0.48 percent over previous close.

Macquarie has upgraded the stock to neutral with a target price of Rs 3,100. According to the report, the open offer was the biggest risk to the underperform rating earlier and at Rs 3100 the stock is trading at 40 times CY15 expected earnings per share - good reflection of fundamentals.

The National Pharmaceutical Pricing Policy overhang and margin pressure provides a good opportunity to exit the stock, Macquarie said.

Among others, Sun Pharma rose 2 percent and Lupin gained 0.9 percent.

According to a poll by CNBC-TV18, most bankers and economists are expecting atleast a 25 basis points (bps) repo rate hike on Wednesday, therby hiking it to 8 percent. The central bank- Reserve Bank of India, however, is not expected to take any liquidity steps. The poll suggests that CRR is likely to remain unchanged and the RBI is also not expected to provide any additional liquidity under the LAF window or under the 7-14 day Repo window which they had introduced recently.However, post the disappointing inflation numbers, about 60 percent of experts are now expecting the year-end WPI to be around 7-8 percent, while 40 percent expect it to be below 7 percent.

And inline with the growth numbers, majority of bankers and economists are expecting growth to come in between 4.5-5 percent. So, bad news can be expected on the macro-front this week.

01:10pm Zee Entertainment Enterprises at 13-year high Shares of Zee Entertainment Enterprises touched a 13-year high of Rs 291.95 today after it decided to merge arm's media business operations with self.

Zee will issue one preference share of the company to arm shareholders for every four shares held.

Zee Entertainment Enterprises was quoting at Rs 290.50, up 3.11 percent over previous close on the BSE.

01:00pm The market erased morning gains amid volatility as shares of Coal India, HDFC Bank and HDFC extended losses in afternoon trade. However, TCS, Bharti Airtel, ICICI Bank and ITC continued to support equity benchmarks.

The Sensex advanced 26.79 points to 20,686.31, and the Nifty rose 9 points to 6,163.70.

HDFC Bank plunged nearly 4 percent. The Reserve Bank of India barred buying by foreign institutional investors (FIIs) in shares of the country's second largest private sector lender.

Stakes held by overseas investors, including FIIs, non-resident Indians (NRIs), persons of Indian origin (PIOs), foreign direct investment and global depository receipts, in HDFC Bank have crossed the ceiling of 49 percent of its paid-up capital, the RBI said in a release.

Coal India dropped 3 percent after the street seems to be disappointed with no announcement of special dividend. However, brokerages are buoyant with the select price hikes taken. Bank of America Merrill Lynch maintains neutral rating on the stock, but raised target to Rs 310 from Rs 300 as the selective price revision is a positive surprise.