Indian shares end flat; Reliance gains, BHEL slumps

* BSE gains 0.06 pct; NSE adds 0.02 pct
* Little impact from finmin fiscal deficit comments
* United Spirits shares drop on Diageo deal worries

By Manoj Dharra
MUMBAI, Oct 29 (Reuters) - Indian shares ended flat on
Monday as Reliance Industries gained on hopes the appointment of
a new oil minister would improve relations with the government,
but Bharat Heavy Electrical 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 to cut interest rates when it reviews monetary
policy on Tuesday, but analysts say the central bank 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.
"As of now there is no fiscal consolidation. Only the intent
is there," said Aneesh Srivastava, chief investment officer of
IDBI Federal Life Insurance.
"Overall result earnings and policy would set the tone of
the market in the near term," he said.
India's BSE index rose 0.06 percent, or 10.48
points, to 18,635.82 points.
The 50-share NSE index rose 0.02 percent, or 1.30
points, to 5,665.60 points.
Among decliners, Bharat Heavy Electricals Ltd,
fell 6.4 percent after reporting a bigger-than-expected 10
percent drop in its quarterly net profit due to falling orders
in a slowing economy.
Shares of Hindustan Unilever dropped 1.1 percent 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 percent over the
previous two sessions. It posted earnings that disappointed
investors on Friday.
Shares in United Spirits dropped 9 percent, 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 percent after
reporting a smaller-than-expected 23.8 percent rise in
July-September quarterly earnings.
Bank of India fell 2.7 percent after reporting a
38.5 percent drop in quarterly earnings and warning 12-15
percent of its restructured loan book could turn bad, while
saying it expected a slight increase in non-performing assets.

However, Reliance Industries rose 1.5 percent
after India's new oil minister Veerappa Moily promised to speed
decision making, raising hopes for a more conciliatory approach
over the energy conglomerate's investments in the KG-D6 block in
India's east coast.
Shares in Wipro gained 2.6 percent after Credit
Suisse upgraded the stock to 'outperform' from 'neutral', saying
shares have "significantly underperformed peers and the Indian
market over the past 12 months."

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FACTORS TO WATCH
* Euro falls on uncertainty over Greece, Spain
* Oil falls below $109 as hurricane shuts refineries
* Shares ease on earnings weakness
* Foreign institutional investor flows
* For closing rates of Indian ADRs

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($1 = 53.6750 Indian rupees)

(Additional reporting by Abhishek Vishnoi; Editing by Rafael
Nam)