Sensex, Nifty flat; Bharti, Tata Steel, SBI early gainers

Moneycontrol BureauLive Market Commentary

10:00 am Poll: IDFC will announce its third quarter (October-December) earnings today. Analysts expect a flattish performance on core metrics (PAT and NII), similar to September quarter when NII grew 7 percent and PAT was up 2 percent only. The reason for the NII slowing was overall slowdown in business due to higher focus on refinancing as against fresh loans and net interest margin was declining resulting in PAT slowing.

Its net interest income may rise 4 percent to Rs 682 crore versus Rs 656 crore (Y-o-Y) while profit after tax is seen going up 2 percent to Rs 463 crore versus Rs 455 crore on a yearly basis.

9:50 am Buzzing: Shares of SKS Microfinance rose 7 percent intraday as it completed a securitisation deal of Rs 55.56 crore though a private sector bank. The country’s only listed micro-lender said that this is the fifth microfinance securitisation in FY14.

“With this, the total sum of securitizations completed during FY14 (YTD) is Rs. 727.37 crore. The first four substantial securitisations were: Rs 321 crore (on September 30),   Rs 80.81 crore (on December 11), Rs 215 crore (on December 19) and Rs 55 crore (on December 30),” it said in a statement. 9:40 am Results Today: Companies that are expected to announce December quarter results today are IDFC, PNB, OBC, Marico, Canara Bank, Union Bank, Syndicate Bank, Petronet LNG, ING Vysya Bank, IRB Infrastructure,  Adani Enterprises, Motherson Sumi, NHPC, Delta Corp, Pantaloons Fashion, Bank of Maharashtra,  Alstom T&D India, Ballarpur Industries, Kansai Nerolac, Merck, Religare Enterprises, Magma Fin, PVR, Firstsource Solutions, 3i Infotech and Container Corporation.

9:30 am Exclusive: The Cabinet’s decision today to increase the cap on LPG cylinders from nine to 12 got a thumbs-down from the Reserve Bank of India Governor Raghuram Rajan who said the government should be careful about “expanding misdirected subsidy”. “We need to spend on important things that we are not spending on,” Rajan said in an exclusive, long-winding interview with CNN-IBN’s Karan Thapar.

The governor said one of the recommendations in the report recently submitted by a panel led by the central bank’s deputy governor Urjit Patel – to create a dedicated committee to take monetary policy decisions – would enhance the credibility of the RBI. “A monetary policy committee would create an institutional structure that would help take good decisions and would send a signal that the RBI is working on its mandate,” he said.

 Don't miss: Flat banking transaction tax: What it means for economy

After yesterday’s carnage, the market kick-started February series on a mildly higher note. The Sensex is at 20521, up 17.59 points while Nifty is at 6077, up 4 points.

Sesa Sterlite, GAIL, Bharti Airtel, Tata Steel and SBI are gainers in the Sensex. Among the laggards are NTPC, Tata Motors, BHEL, Bajaj Auto and HUL.

The rupee gained 17 paise to 62.39 against the dollar in early trade on Friday. Yesterday the rupee closed at 62.56 to the dollar. Dollar is at one-week high against a basket of major currencies.

Ashok Gautam of Axis Bank said emerging market currencies have shown sharp weakness during the last few days. "The impact was seen on rupee also, which has weakened till 63.18 in the recent move," he added.

He expects a softening bias for the rupee with a range of 62.30-62.70/USD today. "Good corporate hedging seen near the daily upper Bollinger at 62.78 - 62.88/USD range. This band is to be carefully tracked for any convincing breach which might see rupee beyond 63 levels," he said.

The Wall Street bounced back on Thursday boosted by positive earnings and on the back of the US economy expanding 3.2 percent. Europe too closed higher. In Asia, Japan opened positive in morning trade. However, trading volumes were thin due to the Chinese New Year holidays.

Brent crude remained largely unchanged at USD 107 per barrel. From the precious metals space, gold snapped its rally and fell 1 percent as strong US economic growth boosted global equities and the dollar.