Sensex gains for 2nd day; banks lead, Kotak Mah & TCS slump

Equity benchmarks gained for the second consecutive session on Tuesday supported largely by banks and metals stocks.

The Sensex rose 46.07 points to 21,251.12, and the Nifty added 9.85 points to 6,313.80 while the BSE Midcap and Smallcap indices gained 0.4 percent.

Overall the market has been in a consolidation phase with the Nifty trying very hard to hold the 6,300 level ahead of further quarterly earnings and RBI policy on January 28.

Banks continued to lead gainers as the rally may be in anticipation of no cut in policy rates by Reserve Bank of India next week after fall in December inflation. BSE Bank index climbed 1.55 percent followed by Auto with a percent upmove.

ICICI Bank topped the buying list, rising over 3 percent while its rivals State Bank of India and HDFC Bank gained 1 percent each.

Axis Bank jumped more than 2 percent as sources say SUUTI, which holds 20.72 percent stake, has approved 10 percent stake sale in the bank.

In the auto space, commercial vehicle maker Tata Motors rallied 2.7 percent as brokerage house UBS advises buying the stock with a target price of Rs 460 apiece.

Cabinet Committee on Economic Affairs (CCEA) on Monday cleared government's residual stake sale in Hindustan Zinc and Federal Bank 's proposal to hike foreign investment limit to 74 percent from 49 percent. Sesa Sterlite and Hindustan Zinc gained 1.5-2 percent while Federal Bank rose a percent.

Hindustan Unilever climbed a percent as sources say the FMCG major hiked some product prices in December-January. After announcing financial numbers, its parent company Unilever Plc said 2013 proved to be challenging year for the company as it reported a 3 percent dip in turnover.

Brokerage house Nomura initiated coverage on Tata Steel with a buy rating and target price of Rs 518. It believes that the company is well placed for a strong EBITDA CAGR over FY14-16 expected (and beyond) on the back of its recent expansion at Jamshedpur and upcoming capacity at Kalinganagar. The stock was up over 2 percent.

Among others, Larsen and Toubro gained 1 percent ahead of third quarter earnings on Wednesday. HDFC, which rose 0.3 percent, too is going to deliver quarterly earnings on Wednesday.

However, TCS fell 2.5 percent on profit taking as it had rallied 5.5 percent in previous session. Coal India too declined 2.5 percent followed by Sun Pharma , Bharti Airtel , BHEL and GAIL with 1-2 percent loss.

Kotak Mahindra Bank dropped 3 percent as its third quarter net profit fell 6 percent (higher-than-expected) in the quarter ended December 2013 while Asian Paints declined 2 percent post weak numbers in the quarter gone by.

In the broader space, Aurobindo Pharma soared over 6 percent to close at record high of Rs 435.15. Bank of America Merrill Lynch reiterates buy rating on the stock and raises target price to Rs 525 apiece post acquisition of Actavis' business in seven Western European Countries.

Suzlon Energy surged 6.5 percent as sources say the company is going to list REpower in London Stock Exchange by August 2014.

Sasken Communication has decided to pay special dividend of Rs 25 apiece. The stock climbed 6 percent.

03:50 pm Stake sale:
The government has chosen JPMorgan Chase & Co, Citigroup Inc and JM Financial to help sell half of the government's stake in Axis Bank valued at USD 925 million, said three people involved in the process.

The sale is part of a search for funds to narrow the government's fiscal deficit to 4.8 percent of gross domestic product in the financial year ending March 2014 from 4.9 percent a year earlier.

The government aims to raise around USD 9 billion by selling shares but has managed just 3 percent of that amount.

03:40 pm Market closing:
The market closed on a flat note but the Nifty managed to hold above 6300. The Nifty ended up 9.85 points at 6313.80 while the Sensex was up 46.07 points to close at 21251.12. About 1364 shares have advanced, 1240 shares declined, and 239 shares are unchanged.

Banking and auto stocks supported the market with Bank Nifty gaining 1.5 percent. It stocks were under pressure in today's trade.

Auto stocks, too, rallied. ICICI Bank , Tata Motors were up around 3 percent each. Other gainers in the Sensex were Tata Steel , Axis Bank and Sesa Sterlite. Among the laggards were TCS (down 3 percent), Coal India , BHEL , GAIL and Sun Pharma .

03:30 pm Deal:
Life Insurance Corporation has sold 2.001 per cent stake in Bharat Forge , flagship of the USD 2.5 billion Kalyani Group, for Rs 150.53 crore. The state-run insurer sold 46.58 lakh shares of the firm.

LIC had 167.74 lakh shares amounting to 7.206 percent stake in the Pune-based forgings maker before the transaction held between November 15, 2013 and January 15, 2014, Bharat Forge said in a BSE filing today.

Following the transaction, LIC now has 121.16 lakh shares in the company or 5.205 per cent stake.

03:20 pm Market news:
Market regulator Securities and Exchange Board (Sebi) called for reforms in the underlying market and said regular issuance of government bonds across maturities can go a long way in achieving this by way of increasing liquidity.

''The success of the derivatives market is dependent on the underlying market, which has to be liquid. There have to be reforms in the underlying market as well. There should be regular issuance of government bonds across maturities to make the underlying market of interest rate futures more liquid,'' Sebi Chairman UK Sinha said.

Sinha said almost 34 percent of the public bonds issued by government were held by the banking system. Unless they participate, any produce has little chance to succeed, he said, adding that the three earlier attempts in last 11 years to launch these products failed.

03:10 pm Davos special:
Slower economic growth and its consequences, income inequality and climate change will be the key topics debated by business leaders, regulators and political heads at the annual meeting of the World Economic Forum in Davos, beginning Wednesday.

"The Reshaping of the World: Consequences for Society, Politics and Business" is the thematic focus of Davos 2014, as there appears to be a whiff of optimism in the air for the first time since the global financial crisis five-and-a-half years ago.

There are no signs of a dramatic rebound, but enough to suggest that the global economy led by United States is slowly getting back on the rails.

03:00pm Government divestment plan
The government may get around Rs 75,000 crore from divestment in FY14 as against target of Rs 54,000 crore, reports CNBC-TV18 quoting unnamed finance ministry sources.

The government is likely to get Rs 25,000 crore from stake sale in Hindustan Zinc and BALCO while Axis Bank's 10% stake sale may give Rs 6,000 crore, sources say.

CNBC-TV18 learned that it may get Rs 30,000 crore as special dividend from Coal India, NMDC and SAIL while PSU ETF and IOC cross-holding may give around Rs 8,000 crore to the government.

02:50pm Kotak Mahindra Bank under pressure post Q3 earnings
Private sector lender Kotak Mahindra Bank disappointed street with its third quarter earnings (October-December) on every parameter with the asset quality weakening.

Standalone (banking operations only) net profit fell 6 percent year-on-year to Rs 340 crore and net interest income grew nearly 11 percent to Rs 912.7 crore. According to CNBC-TV18 poll, analysts had expected the bank to report net profit of Rs 386 crore and net interest income of Rs 948 crore for the quarter.

On the asset quality front, gross non-performing assets (NPAs) expanded 4 basis points sequentially (55 basis points year-on-year) to 2.01 percent while net NPAs jumped 14 bps quarter-on-quarter (46 bps Y-o-Y) to 1.1 percent in the quarter gone by.

In absolute term, gross NPAs surged 7 percent quarter-on-quarter (45.4 percent year-on-year) to Rs 1,076.18 crore while net NPAs climbed 20 percent Q-o-Q (81 percent Y-o-Y) to Rs 584.52 crore during October-December quarter.

The stock was trading at Rs 707.25, down 2.87 percent on the BSE.

02:40pm HUL in focus
HUL shares gained 0.3 percent as agencies reports indicated that the FMCG major has raised prices in some product categories during December-January.

The company increased Pepsodent toothpaste 200 gm pack price by Rs 3 and 100 ml Clinic Plus dandruff shampoo price by Rs 2 while Pureit Water Purifiers' price has been raised by Rs 250-1,010 apiece.

Meanwhile, its parent company Unilever's FY13 net profit grew 9 percent to euro 5.3 billion and operating profit rose 8 percent to euro 7.5 billion while topline fell 3 percent to euro 49.8 billion compared to previous year.

"Growth continued to slow in emerging markets as a result of the impact of economic uncertainty and currency depreciation on consumer demand. Developed markets remained weak with little sign of any overall improvement despite the more positive macro-economic indicators in recent months," the company said in its release.

02:30pm The market advanced marginally in afternoon trade supported by banks, auto and metals stocks. The Sensex rose 64.08 points to 21269.13, and the Nifty added 16.80 points to 6,320.75.

Tata Motors and ICICI Bank rallied nearly 3 percent. Brokerage house UBS advises buying Tata Motors with a target price of Rs 460 apiece.

Aurobindo Pharma , which is the most active stock, climbed 5.75 percent to Rs 432.80 after hitting a record high of Rs 434.60 on the BSE. Bank of America Merrill Lynch reiterates buy rating on the stock and raises target price to Rs 525 apiece.

The brokerage house also raises earnings per share by 3-5 percent for FY14/FY15. "Acquisition of Actavis' west Europe business will put pressure on margins but proposed acquisition will be neutral in the second year," Bank of America Merrill Lynch report said.

Aurobindo's European Subsidiary signs Binding Offer to acquire commercial operations in seven Western European Countries from Actavis".

2:00 pm Result: Consumer goods maker Unilever reported better-than-expected 2013 results on Tuesday, with an improved performance in emerging markets after currency devaluations earlier last year hurt demand.

The Anglo-Dutch maker of Ben & Jerry's ice cream, Lipton tea and Dove soap - which generates more than half its sales from developing and emerging markets - said core earnings were 1.58 euros per share, above analysts' average estimate of about 1.53 euros per share.

Turnover for the full year fell 3 percent, hit by foreign exchange rates and divestments. But underlying sales rose 4.3 percent, slightly ahead of analysts' expectations for a 4.2 percent gain.

In the fourth quarter, underlying sales rose 4.1 percent, fueled by 8.4 percent growth in emerging markets.

1:50 pm Exclusive: Debt-ridden Suzlon Energy is looking to list its 100 percent owned German subsidiary REpower on the London Stock Exchange this year. CNBC-TV18 learns from sources that the IPO size is likely to be around USD 600-750 million, with Suzlon diluting 40-50 percent of its total stake. This pegs REpower's expected valuation at USD 1.2 billion.

Sources say Suzlon Energy will use the proceeds from the IPO to repay German banks and domestic lenders. REpower owes as much as 750 million euros to German banks, who have ring-fenced the company's finances. This has been Suzlon's biggest challenge as the wind turbine maker is unable to access the Germany subsidiary's cash reserved to repay its debt.

Suzlon's total debt stands at Rs 14,155 crore, of this, Rs 9500 crore is getting restructured under the Corporate Debt Restructuring (CDR) cell. The company had repaid its first tranche of FCCBs worth USD 360 million in July 2012. It is understood that the company is now looking to settle another USD 500 million worth FCCBs with the bondholders. Suzlon has been reporting losses for the past 3 years.

1:40 pm FII view: In an interview to CNBC-TV18 , Adrian Mowat, Chief Asian and Emerging Equity Strategist, JPMorgan said the current ongoing political scenario presents an upside for Indian market. However, he feels FII flows in 2014 year will be lower compared to 2013.

He believes the best gains in India will be the first half of FY15. He likes financials, metals and mining spaces. He expects IT companies to continue to outperform.

"I think FII flows will end up being lower this year. We begun to see some buying by local institutional clients and as always remind everyone at the end of the day there were never any net buying or net selling in an equity market. There is a transfer of ownership between different types of investors and the pattern of the Indian market has been that the local institutional investors have been structural sellers for the last couple of years. We think that is going to be exhausted," he said.

1:30 pm Buzzing: Shares of Century Plyboards jumped over 10 percent on its third quarter results. The company reported net profit of Rs 19.74 crore in December quarter compared to net loss of Rs 8.23 crore in the year-ago period.

During the period, its net sales stood at Rs 276 crore. For the nine-month period (April to December 2013), profit rose four fold to Rs 38 crore. Century Plyboards (India) manufactures, sells, and exports plywood and veneer. The company offers commercial, marine, concrete, shuttering, and decorative plywood.

The market is flat but the Nifty is holding 6,300. Banks and auto stocks lead the gains. The Sensex is up 43.99 points at 21249.04, and the Nifty adds 10.45 points at 6314.40. About 1248 shares have advanced, 1146 shares declined, and 238 shares are unchanged.

Private sector lender Kotak Mahindra Bank disappointed street with its third quarter earnings (October-December) on every parameter with the asset quality weakening sequentially as well as yearly basis. Standalone (banking operations only) net profit fell 6 percent year-on-year to Rs 340 crore and net interest income grew nearly 11 percent to Rs 912.7 crore.

According to CNBC-TV18 poll, analysts had expected the bank to report net profit of Rs 386 crore and net interest income of Rs 948 crore for the quarter. The stock fell over 2 percent on the BSE.

The rupee is trading strong, rising for the first time in three days as foreign banks sold dollars on behalf of clients.

Brent futures held above USD 106 a barrel on Tuesday as immediate supply worries from prolonged outages in Africa offset the impact of a deal aimed at ending a decade-long dispute over Iran's nuclear programme.

While chances of a potential conflict diminished after Iran halted its most sensitive nuclear operations under a preliminary deal, the prospects of the OPEC member pumping more supplies still remains far away. That kept investors focused on near-term supply worries stemming from unrest in Iraq and Africa.

12:55pm Tata Steel on buyers' radar
Nomura initiated coverage with a buy rating and target price of Rs 518 as it believes that the company is well placed for a strong EBITDA CAGR over FY14-16 expected (and beyond) on the back of its recent expansion at Jamshedpur and upcoming capacity at Kalinganagar.
 
Tata Steel gained 1.55 percent to Rs 380.55 on the BSE.

12:45pm Hindustan Unilever flat post Unilever Plc
Unilever's FY13 net profit grew 9 percent to euro 5.3 billion and operating profit rose 8 percent to euro 7.5 billion while topline fell 3 percent to euro 49.8 billion compared to previous year.

"Growth continued to slow in emerging markets as a result of the impact of economic uncertainty and currency depreciation on consumer demand. Developed markets remained weak with little sign of any overall improvement despite the more positive macro-economic indicators in recent months," the company said in its release.

Hindustan Unilever is trading at Rs 553.00, down 0.41 percent on the BSE.

12:35pm FII View
Mahesh Nandurkar of CLSA believes the perceived political risks have risen. "Investors are worried that AAP's rise has increased probability of a weak coalition government at centre. We believe that these risks are overblown as AAP will likely require greater time to develop political infrastructure. We note that even in Delhi its influence was more visible in central Delhi, with outer Delhi being dominated by the BJP," he elaborated.

According to him, any potential weakness in market is a buying opportunity.

12:25pm Kotak Mahindra Bank slips 2% ahead of Q3 earnings
According to CNBC-TV18 poll, analysts expect standalone profit after tax to rise 7 percent year-on-year to Rs 386 crore and net interest income to increase 15 percent to Rs 948 crore in the quarter gone by.

They believe the bank may surprise with its earnings of banking business (standalone) as these are conservative expectations. Asset quality and net interest margin are expected to be stable sequentially.

Pick up in advances will be watched (that grew 11 percent year-on-year in Q2). Commercial vehicle (CV) and equipment portfolio in Q2 declined 16 percent Y-o-Y as the bank took a conscious decision to slowdown CV portfolio 18 months ago and so that should not show incremental stress in portfolio.

Analysts expect mark-to-market provisions on available for sale or held-to-maturity as the bank had provided for partially (Rs 264 crore in Q2).

Consolidated business earnings are expected to be led by Kotak Prime (auto financing) and capital markets (securities and asset management). Kotak Prime grew 10 percent Y-o-Y to Rs 125 crore in Q2.

Consolidated profit after tax is expected to grow 23 percent Y-o-Y to Rs 708 crore and net interest income may jump 21 percent to Rs 1,495 crore in the quarter gone by.

12:15pm CIMB maintains reduce rating on Asian Paints
Asian Paints too succumbed to the pressures of slowing consumption which has been affecting its peers for some time now when it posted weak set of numbers for the third quarter. Varun Lohchab, Regional Head of Consumer, CIMB Equities was already negative on the stock and continues to maintain reduce rating. It has cut back earnings estimate by 6-7 percent with target price of Rs 475. He says Asian Paints valuations were very stretched compared to the rest of the sector.

He expects to see downside risk from these levels on an ex-12 month basis in terms of volume growth. He expects volume growth to stay at 5-6 percent level and topline growth of close to 10 percent in the next few quarters.

12:05pm The market continued to be rangebound in noon trade as traders are looking for major trigger to get direction on either side. Near term triggers are ongoing third quarter earnings and RBI monetary policy next week (January 28).

The Sensex rose 9.32 points to 21,214.37, and the Nifty gained 2.10 points at 6,306.05. About 1122 shares have advanced, 1021 shares declined, and 239 shares are unchanged.

Top IT exporter TCS fell more than 2 percent on profit taking; the stock had rallied 5.5 percent in previous session on short covering.

Reliance Industries and Infosys declined over 0.5 percent while FMCG majors ITC and Hindustan Unilever slipped 0.3 percent and 0.9 percent, respectively. BHEL , NTPC and Bharti dropped over a percent while Coal India plunged 2 percent.

However, ICICI Bank and Tata Motors maintained upmove, rising 2-3 percent. L&T, SBI , Maruti, M&M, Tata Steel and Sesa Sterlite gained 1-1.5 percent.

11:50 am Exclusive: Fixing the fiscal mess, a legacy of Congress-led UPA-II, will be the biggest challenge for the new government. Noted author and former minister Arun Shourie minced no words in blaming the government for tripling India's debt burden in a matter of few years and rooted for a Prime Minister who is strong enough to get projects off-ground by himself instead of pushing files through various Cabinets.

Speaking to CNBC-TV18, Shourie criticized the government for failing to resolve revenue shortfall. "Unless the subsidy issue is tackled, expenditure cannot be controlled," he said adding freeing petroleum products must be continued by new government and it should include wiping out kerosene subsidy as well.

11:40 am Buzzing: Shares of Asian Paints fell over 3 percent intraday on Tuesday as it posted weak December quarter results with margins declining 120 basis points to 15.6 percent. Higher input cost dragged gross margins sequentially by 230 basis points to 41 percent. Gains from low cost inventory of earlier quarter waned out and this quarter saw rise in input costs.

Credit Suisse lowered target price to Rs 470 from Rs 481 as they reduced earnings estimates by 3 percent to build in marginally lower gross margins.

Motilal Oswal has a neutral rating on the stock with a target price of Rs 465.

11:30 am Commodity check: Brent futures eased towards USD 106 a barrel as world powers and Iran took a step forward in ending a decade-long dispute over Tehran's nuclear programme, but worries of prolonged outages at other exporters supported prices.

While chances of a potential conflict diminished after Iran halted its most sensitive nuclear operations under a preliminary deal, prospects of the OPEC member pumping more supplies still remain far away. That kept investors focused on immediate supply worries stemming from unrest in Iraq and Africa. 

The market is holding early gains as the Nifty is above 6300. The Nifty is up 20.65 points at 6324.60 while the Sensex is up 75.23 points at 21280.28. About 1155 shares have advanced, 714 shares declined, and 219 shares are unchanged.

Auto stocks are holding up the indices. Tata Motors , ICICI Bank , Sesa Sterlite, Tata Steel and Maruti Suzuki are top gainers in the Sensex. Among the losers are Coal India , TCS , BHEL , Bharti Airtel and NTPC .

Rupee is slightly up on dollar sales by some foreign banks. Bonds are higher as sentiment remains positive due to RBI open market operations (OMO) purchase auction on Wednesday which will provide liquidity support. Absence of supply this week and hope of softer policy stance by RBI aid gains.

The dollar rose against the yen in Asian trade as The Bank of Japan starts a two-day policy meeting. Most other Asian currencies such as the Malaysia Ringgit and Thai Baht were steady-to-slightly lower against the US dollar.

Asian markets gain led higher by the Chinese markets after the People's Bank of China injected money into the financial system, while a weaker yen helped push Japanese stocks higher.

10:59am Crude Update
Brent futures eased towards USD 106 a barrel as world powers and Iran took a step forward in ending a decade-long dispute over Tehran's nuclear programme, but worries of prolonged outages at other exporters supported prices.

While chances of a potential conflict diminished after Iran halted its most sensitive nuclear operations under a preliminary deal, prospects of the OPEC member pumping more supplies still remain far away. That kept investors focused on immediate supply worries stemming from unrest in Iraq and Africa.

Brent crude fell 4 cents to USD 106.31 a barrel by 0340 GMT, after dropping to a low of USD 105.81 in the previous session. U.S. oil futures slipped 48 cents to USD 93.89. Floor trading was shut, and there will be no settlement on the New York Mercantile Exchange due to the Martin Luther King Junior Day US holiday, reports Reuters.

10:54am Movers and Shakers
Tata Motors is top gainer in the Sensex, rising 3 percent followed by ICICI Bank and Bank of Baroda with 2.5 percent upmove.

Metals stocks like Sesa Sterlite and Tata Steel rallied 2 percent each while Maruti Suzuki and State Bank of India gained over 1.5 percent.

However, Asian Paints dropped 2.78 percent after reporting degrowth of 1.8 percent in bottomline in the quarter ended December 2013.

Kotak Mahindra Bank slipped 2.09 percent ahead of Q3 earnings. Coal India , TCS and UltraTech Cement fell 1-1.5 percent.

MCX India, Aurobindo Pharma , Tata Motors, Sesa Sterlite, SBI , HDFC , HCL Technologies and TCS are most active shares on exchanges.

10:44am Aurobindo Pharma hits record high
Bank of America Merrill Lynch reiterates buy rating on the stock and raises target price to Rs 525 apiece.

The brokerage house also raises earnings per share by 3-5 percent for FY14/FY15. "Acquisition of Actavis' west Europe business will put pressure on margins but proposed acquisition will be neutral in the second year," Bank of America Merrill Lynch report said.

Aurobindo's European subsidiary signed binding offer on Monday to acquire commercial operations in seven Western European countries from Actavis.

Aurobindo Pharma is trading at Rs 424.75, up 3.79 percent on the BSE after hitting a record high of Rs 424.75.

10:34am SpiceJet cuts airfare
The country's second largest low-fare airline SpiceJet cut airfares on Tuesday by 50 percent for booking for three days on or before 23 January in a move to improve load factor during the off-season. A minimum of 30 days advance purchase has been kept as a must for customers to avail the discount.

Speaking to CNBC-TV18, SL Narayanan, Group CFO, Sun Group said he expects no impact on margins as a result of the discounts. He also clarified that the offer is valid only for domestic flights.

Losses at SpiceJet have been mounting, as the company grapples with high fuel price and fierce competition. The company has reported a net loss of Rs 508 crore for the first half of this financial year, on the back of a Rs 191-crore loss for 2012-13.

10:24am Cadila Healthcare  on buyers' radar
Zydus Cadila has received the final approval from the USFDA to Bupropion Hydrochloride extended release tablets USP in the strength of 300 mg. The drug falls in the anti-depressants segment.

The estimated sales in 2013 as per IMS for Bupropion HCl tablets was at USD 255.9 million. The total market for Bupropion was estimated at USD 526.7 million.

Cadila Healthcare was trading at Rs 866, up 1.00 percent on the BSE.

10:14am Hindustan Zinc shines
Shares of  Hindustan Zinc jumped 3 percent while  Sesa Sterlite rallied 2.7 percent, with both the stocks hitting 52-week high.

The stocks are excited as the much impending government's residual stake in Hindustan Zinc was cleared by the Cabinet Committee on Economic Affairs (CCEA), last evening. Sesa Sterlite controls 64.5 percent of the equity in Hindustan Zinc.

The government holds a 29.5 percent stake in the company controlled by London-listed Vedanta Resources. The government sold a majority stake in HZL to Anil Agarwal-led Vedanta Resources in 2002.

With a market capitalisation of Rs 56,006 crore, the government's stake in HZL is valued at Rs 16,521.77 crore.

Reacting to the development, market expert SP Tulsian, sptulsian.com expects Sesa Sterlite to rise to Rs 220-225 going ahead.

''Vedanta had offered USD 3 billion earlier. They offered USD 487 million separately for BALCO and USD 3 billion for the residual stake in Hindustan Zinc . So, one has to understand that what are the conditions now attached,'' Tulsian told CNBC-TV18 in an interview.

10:04am The market maintained marginal upside supported by banks, metals and auto stocks. The Sensex rose 56.72 points to 21261.77, and the Nifty climbed 15.35 points to 6,319.30.

Advancing shares outnumbered declining ones by a ratio of 947 to 507 on the BSE.

Mahesh Nandurkar of CLSA believes the perceived political risks have risen.

"Investors are worried that AAP's rise has increased probability of a weak coalition government at centre. We believe that these risks are overblown as AAP will likely require greater time to develop political infrastructure. We note that even in Delhi its influence was more visible in central Delhi, with outer Delhi being dominated by the BJP," he elaborated.

According to him, any potential weakness in market is a buying opportunity.

Shares of Tata Motors, ICICI Bank, Sesa Sterlite and Tata Steel rallied 2 percent each followed by State Bank of India, Maruti Suzuki and Larsen and Toubro with 1.5 percent upmove.

9:50 am Holiday time! The country's second largest low-fare airline SpiceJet has cut airfares by 50 percent for booking for three days on or before 23 January in a move to improve load factor during the off-season. A minimum of 30 days advance purchase has been kept as a must for customers to avail the discount.

Speaking to CNBC-TV18, SL Narayanan, Group CFO, Sun Group said he expects no impact on margins as a result of the discounts. He also clarified that the offer is valid only for domestic flights.

Losses at SpiceJet have been mounting, as the company grapples with high fuel price and fierce competition. The company has reported a net loss of Rs 508 crore for the first half of this financial year, on the back of a Rs 191-crore loss for 2012-13.

9:40 am Bond market check: Government bonds rose to new three-month highs on Tuesday on a report quoting an unnamed finance ministry official as saying that the fiscal year borrowing may be less than earlier budgeted if fiscal deficit is kept in check.

A newspaper reported that a large chunk of the remaining 400 billion rupees of bond sale may be cancelled due to a pickup in small savings.

The benchmark 10-year bond yield fell 5 bps to 8.47 percent, its lowest since October 11.

9:30 am FII view: Mahesh Nandurkar of CLSA says that investors are worried that AAP's rise has increased probability of a weak coalition government at centre. "We believe that these risks are overblown as AAP will likely require greater time to develop political infrastructure. We note that even in Delhi its influence was more visible in central Delhi, with outer Delhi being dominated by the BJP. Any potential weakness in market is a buying opportunity," he adds.

Jonathan Garner of Morgan Stanley believes the headwind from expensive crude is likely to weaken through 2015 which will benefit countries like India, Indonesia improve their current account deficit. Stock picks that would potentially benefit from lower oil price will be BPCL , ONGC and Oil India within India

The market opened marginally higher on Tuesday, tracking positive Asian cues. The Sensex rose 48.68 points to 21,253.73, and the Nifty gained 12.95 points at 6,316.90.

About 373 shares have advanced, 112 shares declined, and 117 shares are unchanged.

Sesa Sterlite rallied 2 percent as CCEA approved Hindustan Zinc residual stake sale while TCS fell a percent on profit taking. Other gainers in the Sensex are Tata Steel,  L&T, Hindalco and SBI . Among the laggards are BHEL , ONGC, Infosys , Tata Motors and Coal India .

The rupee started off trade with marginal gains of 9 paise at 61.53 per dollar as against previous day's closing value of 61.62 per dollar.

Ashutosh Raina of HDFC Bank believes the dollar-rupee pair has been moving in a very narrow range. "The market has witnessed oil and other demand getting offset by good FII flows, and consistent intervention by RBI during times of volatility," he adds.

He expects the pair to continue trading in range of 61-62/USD with appreciating bias in the short-term.

Meanwhile, the dollar index is little changed above 81.11, having drifted off a two-month high of 81.296 yesterday in subdued trading due in part to the US holiday. Against the yen, the greenback edged up to 104.16 from 103.865.

In opening trade, Asian markets were trading higher. Nikkei gained 1.07 percent, Straits Times was up 0.17 percent and Seoul Composite rose 0.28 percent. In Asia, attention will remain squarely on Bank of Japan's policy meeting commencing later today.

Meanwhile in China, the seven-day repurchase rate hit its second highest level since December. People's Bank of China said it would give commercial banks emergency funding.

In commodities, crude prices continued to inch lower weighed down by data which showed China's oil consumption slowed in 2013 along with Iran starting to implement a nuclear deal with world powers.

From the precious metals space, gold traded just below a six-week high this morning amid subdued activity in the stock markets and on the data front, while platinum was near its strongest in 2-1/2 months as strikes were set to begin this week at the top producers.