Sesa Sterlite, Tata Steel slip; Sensex, Nifty take breather

Moneycontrol Bureau Live Market Commentary

11:50 am Buzzing: Shares in Sun Pharmaceutical Industries gain 1.5 percent after the company got US Food and Drug Administration approval to sell a drug to treat Osteoporosis, a bone-weakening disease.

Currently the drug, Ibandronate Sodium, is marketed by Roche under the brand name Bovina.

"Bovina generated an annual sales of USD 82 million in 2012. Currently, Sun Pharma is the only generic player to have final approval for this product," brokerage Sharekhan said in a note on Wednesday.

More players would be able to sell the drug after its patent expiry on September 2, 2014, Sharekhan said.

11:40 am Market outlook: The non-banking financial company or the NBFCs space is likely to be in the limelight as Bimal Jalan committee’s recommendations on new banking licences is eagerly awaited before this fiscal year end.

Nischint Chawathe, NBFC Analyst, Kotak is betting on IDFC, which is trading below book. He says over the next three years even if the finance company gets converted into a bank and sees pressures on Return on equity (RoE), it would still be a good buy. It may even take some time for the company to get into a full fledged banking model, but considering it is currently trading below book, the stock has possible factored in the worse, he adds.

He says as far as L&T Finance goes, from a valuation point and a return ratio that appears a little high, he would want to look at a better value.

11:30 am Stock in focus: Shares of Hero MotoCorp fell over 1 percent intraday on Wednesday as the auto major slashed price rates by up to Rs 4,500.

Following excise duty cut announced by Finance Minsiter P Chidambaram in the Vote on Account 2014-15, both Honda Motorcycle & Scooter India (HMSI) and Hero MotoCorp reduced product prices. Chidambaram announced reduction in excise duty on small car, motorcycles, scooter and commercial vehicles to 8 percent from 12 percent.

The price benefit starts from minimum of Rs 1,600 on Dream Neo motorcycle, priced between Rs 43,150 and Rs 47,289, and goes up to Rs 7,600 on CBR 250R performance bike tagged between Rs 1.58 lakh and Rs 1.93 lakh (ex-showroom Delhi).

11:20 am Market outlook: Prabodh Agarwal, VP- Institutional Equities, IIFL expects the bipolar nature of the market to continue till mid-2014. Speaking to CNBC-TV18 from the sidelines of IIFL Investors Conference 2014, he said that investment-oriented sectors should see a pick-up in earnings growth going ahead and capital goods, industrials and financials could see buying in the second half of CY14.

He is also positive on export and consumption sector and sees them continue to perform well. “Investors should remain reasonably exposed to the defensives like IT, pharma and financials focused on consumers,” he added.

Meanwhile, FIIs have neutral view on the Indian market as of now and would wait for elections to be out of market’s way before taking any investment call on India, he said. He expects FII investments into India to remain muted for the next three months.

Don't miss: Top 5 most valuable Indian brands in 2014

The market seems to be taking a breather and is also waiting for minutes of the US FOMC January meeting that will be released later today. The Sensex is up 19.87 points at 20654.08, and the Nifty is up 5.65 points at 6132.75.

About 1161 shares have advanced, 796 shares declined, and 94 shares are unchanged. Sun Pharma, Infosys, BHEL, GAIL and M&M are top gainers in the Sensex. Among the laggards are Sesa Sterlite, Tata Steel, Hero Moto Corp, HDFC and Tata Power.

Asian markets trade mixed due to lack of clear direction from US equities.

In currencies, the euro is trading slightly higher against the dollar as weak economic data from the US increased speculation about a delay in cutting down monetary easing. The yen trades in a tight range against the dollar.

Gold prices give up gains but is still trading near 3.5 month highs. Brent too is soft after settling at the highest levels this year.