Markets end flat; telcos rally on tariff hike hopes

Benchmark share indices ended flat, amid a range bound trading session, as gains in select index heavyweights failed to offset losses in private banking majors even as telecom shares rallied on hopes that they would hike tariffs.

The 30-share Sensex ended down 6 points at 28,879 and the 50-share Nifty ended up 2 points at 8,780.

"Markets seem to have taken a pause after gains in the previous few sessions and Reliance Industries is supporting the market.

Further, telecom stocks have gained on twin effects of fresh buying and shortcovering on hopes that the service providers would hike tariffs after huge investments to acquire spectrum," said Deven Choksey, MD & CEO, KR Choksey Shares & Securities.

Further, the government will announced Index of Industrial Production for February after market hours later today.

Meanwhile, global rating agency Fitch said that performance of state-owned banks would remain weak for a while even as the pace of non-performing assets has eased at some large banks.

The agency also added that the government’s ability to provide substantial financial support to the banking system in a potential crisis is limited given the already high government debt burden.

The Indian rupee was trading lower at 62.35 to the US dollar compared to the previous close of 62.24 after the US currency appreciated overseas on the back of encouraging US jobs report.

SECTORS & STOCKS

Bankex, Capital Goods and Healthcare indices were the top sectoral losers while Auto, Consumer Durables, Metal, Power, Oil and Gas were among the gainers.

Bank shares witnessed profit taking. HDFC Group shares HDFC and HDFC Bank were both ended down 1-1.5% each contributing the most to the Sensex losses.

Axis Bank and ICICI Bank ended down 0.7% each. However, SBI ended up 1.9% after the global brokerage Barclays maintained its 'overweight' stance on SBI for a target of Rs 353.

Barclays expects operating efficiency through better performance. Pharma shares were trading mixed after recovery in select stocks.

Cipla slipped 2.7% after international brokerage CLSA downgraded the stock from 'underperform' to 'sell'.

However, Dr Reddy's Labs and Sun Pharma reversed early losses and ended up 0.5-1.6% each. Hindalco dropped 1.8% as sentiment in the stock dampened after global aluminum major Alcoa reported lower-than-expected revenues.

Telecom shares gained on hopes that they would hike tariffs after huge investments to acquire spectrum.

Bharti Airtel ended up 1.1%, Idea Cellular gained 4% while Reliance Communications jumped 13%. Index heavyweight Reliance Industries ended up 1% on renewed buying interest.

Society of Indian Automobile Manufacturers said domestic passenger car sales grew 2.64% to 1,76,011 units in March, from 1,71,491 units in the same month of last year.

Tata Motors gained 0.5% while Maruti Suzuki ended marginally lower. Motorcycle sales last month dipped 5.22% to 8,59,521 units as against 9,06,901 units a year earlier, SIAM said.

Hero Motocorp slipped 1% while Bajaj Auto gained 0.3%. Shares of IDFC ended up 2% after the company said it has got the shareholders approval for the demerger of its financial undertaking into IDFC Bank.

BSE Midcap and Smallcap indices outperformed the benchmarks up 0.4-1.1% each The market breadth ended firm on the BSE with 1,644 advances versus 1,171 declines.

GLOBAL MARKETS

Japan's key share index Nikkei topped 20,000 on Friday for the first time in 15 years on hopes of stronger corporate earnings, and gained 2.4% on the week.

The benchmark Nikkei rose as high as 20,006 before ending down 0.2% at 19,907.63.

The rally has been driven by many factors, including hopes of higher shareholder returns, a rise in corporate earnings, a recovery in domestic consumption and more share buying, both real and imagined, by Japanese public investors.

European shares firmed up with Germany leading the gains after beter-than-expected industrial production data raised prospects that the economy in the euro zone is picking up pace.

Germany's benchmark DAX was up nearly 1% while CAC-40 and FTSE-100 were both trading 0.2% higher.