Nifty consolidates around 8,350; BHEL up 2%

Capital goods shares rallied ahead of May IIP data, while TCS slipped post Q1 earnings

Markets continued to rule steady in noon trades on Friday as gains in private lenders and capital goods shares helped offset losses in TCS and FMCG shares.

At 1:30PM, the Sensex was up 56 points at 27,631 and the Nifty was up at 21 points at 8,349.

In the broader market, the BSE Mid-cap and Small-cap indices were up 0.3% each. Markert breadth was positive with 1,410 gainers and 1,136 losers on the BSE.

On the macro-economic data front, India's Index of Industrial Production (IIP) data for the month of May is due later today.

The rupee trimmed some of the early gains and was trading at 63.37 per dollar against the previous day's close of 63.39 a dollar.

TCS Q1 RESULTS

TCS was down nearly 2%. The IT major reported a net profit of Rs 5,708.9 crore, up 12.8% from Rs 5,057.8 crore in the first quarter of FY15. The stock is has slipped by 0.6%.

At Rs 25,668 crore, revenue was up 16.1% on a year-on-year basis and six per cent sequentially. But revenue growth in dollar terms was below the Street’s estimates.

According to Reliance Securities, “TCS’ revenue was a slight-miss on vertical-specific count while profitability was tad-better on efficiencies and strong performance in core geo. We believe that strong digital adoption (digital revenue at 12.5% of 1Q revenue and growth at double-digit on sequential basis) and large transformational infrastructure deals (improvement in client metrics and infrastructure services) will drive growth ahead mitigating headwinds in energy/insurance/telecom; maintain BUY with Target Price of Rs 3,030.”

SECTORS & STOCKS

BSE Capital Goods index was the top gainer up 1% followed by Bankex and Metal indices. FMCG and Realty indices were among the top losers.

Capital Goods shares were among the top gainers on expectations of higher industrial growth in May, the data for which is expected later today. L&T  was up 1.5% while BHEL gained 2% after the state-owned company said it has successfully commissioned the second 500 megawatts (MW) unit at Tuticorin Thermal Power Station (TPS).

Bank shares firmed up on renewed buying interest at lower levels. HDFC Bank, ICICI Bank, Axis Bank and SBI were up 0.8-1.5% each.

IT shares were trading mixed with Infosys and Wipro up 0.6-1% each while TCS was down post its first quarter earnings. Wipro is set to acquire Designit, a Denmark-based global strategic design firm, for Euro 85 million (Rs 595 crore, or $94 million).

Tata Steel was marginally up after the company said its crude steel production showed an increase of 0.5% to 2.5million tonnes in Q1 2015 year-on-year.

Maruti pared early gains and was trading flat. The passenger car major announced that its Celerio model that was launched in 2014 has sold over 1,00,000 units.

FMCG majors lost ground on concerns that an uptick in inflation in wake of poor monsoon in July so far would hurt rural volumes. HUL was down 2.6% while ITC lost 0.6%.

Among other shares, Bhushan Steel shares surged 10% to Rs 72.65, extending its previous day’s 20% rally on the BSE, after the company said about 70% of the banks have approved the loan restructuring scheme and sanction from rest of the banks is under process which is expected within a month or so.