The BSE Sensex ended flat on Monday as Reliance Industries gained on hopes the appointment of a new oil minister would improve relations with the government, but BHEL dropped after quarterly earnings missed estimates.
The finance minister on Monday pledged to nearly halve the country's fiscal deficit by March 2017, but the impact was limited as P Chidambaram offered few concrete steps to meet the ambitious target.
The comments were seen as an attempt to persuade Reserve Bank of India (RBI) to cut interest rates when it reviews monetary policy tomorrow, but analysts say the RBI is unlikely to do so given its concerns about inflation.
Instead, analysts expect the RBI to cut the cash reserve ratio, or the amount of deposits lenders must keep with the central bank. The BSE Sensex rose 0.06 percent, or 10.48 points, to 18,635.82 points. The 50-share Nifty rose 0.02 per cent, or 1.30 points, to 5,665.60 points.
Among decliners, Bharat Heavy Electricals Ltd, fell 6.4 per cent after reporting a bigger-than-expected 10 per cent drop in its quarterly net profit due to falling orders in a slowing economy.
Shares of Hindustan Unilever dropped 1.1 per cent on continued worries about whether the consumer goods maker can sustain pricing-led sales growth in the soaps and detergent segment, and concerns about slower growth in personal products and food.
Analysts also cited concerns about higher taxes: Jefferies said Hindustan Unilever has raised its tax rate assumptions for fiscal 2013/14 and 2014/15, citing guidance from the management.
Hindustan Unilever shares had dropped 4.3 per cent over the previous two sessions. It posted earnings that disappointed investors on Friday.
Shares in United Spirits dropped nine per cent, after Vijay Mallya, who controls the liquor company, told Reuters on Sunday he had not reached a deal to sell a stake to Diageo.
Shares in Havells India dropped 5.6 per cent after reporting a smaller-than-expected 24 per cent rise in July-September quarterly earnings.
Bank of India fell 2.7 per cent after reporting a 39 per cent drop in quarterly earnings and warning 12-15 per cent of its restructured loan book could turn bad, while saying it expected a slight increase in non-performing assets.
