Sensex rises 464 points, Nifty ends above 7350; SBI surges 12%

02 Mar 2016

3:30 pm Market Closing: It was a stellar rally in the market on Wednesday, continuing for the second consecutive session. The rally was largely led by banks, especially due to change in rules that determine banks' regulatory capital, which would be big boost to PSU banks that have been struggling with NPA issues. Bank Nifty jumped more than 4 percent.

The 30-share BSE Sensex surged 463.63 points or 1.95 percent to 24242.98 and the 50-share NSE Nifty climbed 146.55 points or 2.03 percent to 7368.85. About three shares advanced for every share declining on the BSE.

SBI was the biggest gainer on Sensex, up 12.39 percent followed by Hindalco, ICICI Bank, Adani Ports, Hero Motocorp, PNB and Bank of Baroda with 5-7 percent upside while M&M, Coal India, Sun Pharma, ITC and Bajaj Auto were down 1-5 percent.

3:20 pm PF: Amid widespread concerns, Finance Minister Arun Jaitley today said in Lok Sabha that the issue related to the proposal to tax PF will be addressed by him during the discussion on Budget.

"We are seized of the problem. I will address it during the Budget discussion," Jaitley said.

He was responding when TMC members raised the issue soon after the question House with Saugata Roy demanding that Jaitley, who was in the House, make an immediate announcement. TMC leader Sudip Bandhyopadhyaya said the Budget proposal to tax the EPF has caused nation-wide concern.

2:58 pm Market Update: The Sensex rose 414.52 points or 1.74 percent to 24193.87 and the Nifty climbed 135.50 points or 1.88 percent to 7357.80.

About 1923 shares have advanced against 670 declining shares on the BSE.

2:40 pm Buzzing: HCL Technologies shares gained more than 2 percent on five year next–generation IT outsourcing services contract from Sweden-based Husqvarna AB.

HCL has been providing application management services to Husqvarna and with this deal, HCL will now provide end-to-end integrated infrastructure and applications services, covering data centre services, network services, security services, applications operations and support services," says the IT company in its filing.

Husqvarna AB manufactures outdoor power products including robot mowers, garden tractors, chainsaws and trimmers.

"HCL's engagement with Husqvarna is nearly three years old and Husqvarna is marquee customer for the company in Nordics region," it says.

2:30 pm Europe Update: European markets traded higher today, tracking gains in the US and Asia overnight. FTSE, CAC and DAX gained 0.5-1 percent.

Markets in Asia were higher, with Japan's Nikkei 225 index leading the way after a strong finish on Wall Street overnight. Giving European markets another reason to be cheerful, major US indexes rose on Tuesday, with the Dow Jones industrial average up 2.11 percent, S&P 500 adding 2.39 percent, and the Nasdaq composite gaining 2.89 percent.

2:15 pm Tata Steel expansion: Tata Steel has received final environment clearance for its Rs 1,877 crore expansion project to be carried out at Jamshedpur Steel Works in Jharkhand.

"The Environment Ministry has considered the application based on the recommendations of the Expert Appraisal Committee (Industry-I) and decided to grant environment clearance (EC) to the proposal for expansion of crude steel production at Tata Steel Works," a senior government official said.

The EC, which was issued yesterday, has been given to the company subject to strict compliance to specific and general conditions, the official added.

Among conditions specified, the official said the company has been asked to take prior permission from the State Forest Department on likely impact of the expansion of the proposed steel plant on the reserve forests.

2:00 pm Market Check
Equity benchmarks remained strong in afternoon trade, backed by banks, oil, infra and select auto stocks. The Sensex rallied 429.50 points or 1.81 percent to 24208.85 and the Nifty climbed 141.35 points or 1.96 percent to 7363.65.

State Bank of India was the biggest gainer on Sensex, up 9 percent after the RBI on Tuesday relaxed capital rules for banks to help meet Basel-III norms. As per the new rules, banks will be allowed to recognise part of their real estate assets, foreign currency assets and deferred tax assets as capital with suitable hair cut.

This measure is a big positive particularly for State Bank of India because the bank never had revaluation reserves on balance sheet, Ravikant Bhat of IDBI Capital said, adding other beneficiary could be Corporation Bank.

ICICI Bank, Axis Bank, Adani Ports, Hero Motocorp, NTPC, Hindalco and BHEL rallied 4-6 percent.

The market continued to be strong as about three shares advanced for every share declining on the Bombay Stock Exchange.

1:45 pm Banks: Welcoming RBI's easing of rules to allow lenders to bolster capital ratios, Finance Minister Arun Jaitley said the government will take all steps and provide resources to keep public sector banks in good health. During his post-Budget interaction with the industry, he said banking is a stressed sector and so the government is professionalising PSU banks and recapitalising them. "RBI last evening took a very positive move which helps further in recapitalisation of banks," he said.

1:30 pm Order: The government ordered "rebidding" of the strategic Rs 10,050-crore Zojila pass tunnel contract in Jammu and Kashmir, which was earlier given to IRB Infrastructure . The decision to rebid the tunnel project was taken recently at a high-level meeting, chaired by Road Transport and Highways Minister Nitin Gadkari, official sources said. At the meeting, officials informed Gadkari that IRB Infrastructure had approached the Ministry to expedite the contract as the project was being delayed, sources said.

The market is still on a rise as the Sensex is up 413.66 points or 1.7 percent at 24193.01. The Nifty is up 136.70 points or 1.9 percent at 7359. About 1909 shares have advanced, 579 shares declined, and 116 shares are unchanged.

SBI, Hindalco, ICICI Bank, Hero MotoCorp and Adani Ports are top gainers while M&M, Bajaj Auto, ITC, Coal India and Sun Pharma are losers in the Sensex.

The rupee appreciated further as it rose by 17 paise to over a three-week high of 67.68 against the US currency on sustained bouts of dollar selling from banks and exporters amid firm domestic equities. Overseas, the US dollar was trading mixed while the Japanese yen nursed broad losses in early Asian trade after encouraging US factory and construction data, which offered hope that the economy is pacing up.

12:58 pm Market holds gain: The Sensex climbed 434.14 points or 1.83 percent to 24213.49 and the Nifty rose 142.30 points or 1.97 percent to 7364.60.

About 1888 shares have advanced against 534 declining shares on the BSE.

12:45 pm Global Markets Update: Asian markets rose today, with Japan's Nikkei 225 index leading the way after a strong finish on Wall Street overnight.

The Japanese benchmark index was up 4.26 percent, with the yen hovering near the 114 handle against the dollar, after falling overnight.

Other markets followed suit, with Australia's S&P/ASX 200 finishing on a one-month high, breaking the 5,000 level, to close up 98.94 points, or 2.01 percent, at 5,021.20. South Korea's Kospi gained 1.60 percent while Hong Kong's Hang Seng index was up 2.9 percent. Chinese markets also rallied, with the Shanghai composite up 4.2 percent.

Major US indexes rose on Tuesday, with the Dow Jones industrial average up 2.11 percent, S&P 500 adding 2.39 percent, and the Nasdaq composite gaining 2.89 percent. Many analysts agreed that the better-than-expected data from the US overnight reduced some of the concerns, for now, over a sharp slowdown in US growth.

12:30 pm Interview: Bajaj Auto reported 12 percent gain in total sales for the month of February, year-on-year (YoY) and sold 2.7 lakh units.

Motorcycle sales increased 9 percent (YoY) to 2.35 lakh units and three wheeler sales went up 37 percent (YoY) to 37437 units. Exports remained the only eye-sore as sales dipped 12 percent (YoY).

In an interview with CNBC-TV18, Kevin D'sa, President of Finance at Bajaj auto said that he expects domestic sales to grow to 2 lakh units in March against 1.73 lakh units in February.

At present Bajaj has 20 percent market share as retail level and the company aims to capture 22 percent by March end.

12:15 pm Jaitley supports PSU Banks: Welcoming RBI's easing of rules to allow lenders to bolster capital ratios, Finance Minister Arun Jaitley today said the government will take all steps and provide resources to keep public sector banks in good health.

During his post-Budget interaction with the industry, he said banking is a stressed sector and so the government is professionalising PSU banks and recapitalising them.

"RBI last evening took a very positive move which helps further in recapitalisation of banks," he said.

Easing rules on what banks can count towards their core capital requirement under the upcoming Basel III rules, the Reserve Bank of India allowed reserves associated with property revaluations and foreign-currency translations to be considered as common equity tier I capital.

The move is likely to free up as much as Rs 3,50,000 crore in capital of public sector banks, helping them boost buffers while complying with a deadline set to clean up their balance sheets.

12:00 pm Market Check
The market maintained its uptrend in noon trade, mainly driven by banks after the Reserve Bank of India made changes in determining banks' regulatory capital. Bank Nifty surged 4 percent, led by SBI (up 9 percent), ICICI Bank (up 5 percent), HDFC Bank (2 percent), Axis Bank (up 4.4 percent), Bank of Baroda (up 8 percent) and Punjab National Bank (up 5 percent).

The Reserve Bank of India on Tuesday made some amendments to the treatment of certain balance sheet items of banks, in effect boosting their regulatory capital and aligning it with the internationally adopted Basel III capital standards. As per the new rules, banks will be allowed to recognise part of their real estates assets, foreign currency assets and deferred tax assets as capital with suitable hair cuts.

PS Jayakumar, MD & CEO of Bank of Baroda says the Reserve Bank's new amendments on balance sheet items will help in improving CET I by 1.1 percent while Anshula Kant, CFO of State Bank of India (SBI) says that the bank should get upward of 100 basis points (bps) of capital [adequacy ratio].

The 30-share BSE Sensex rose 407.74 points or 1.71 percent to 24187.09 and the 50-share NSE Nifty gained 138.20 points or 1.91 percent at 7360.50. The BSE Midcap and Smallcap indices continued to outperform benchmarks, up 2.5 percent.

About five shares advanced for every share declining on the Bombay Stock Exchange.

11:55 am Interview: The Reserve Bank's new amendments on balance sheet items will help in improving CET I by 1.1 percent, says PS Jayakumar, MD & CEO of Bank of Baroda.

The move will further help in improving Capital Adequacy Ratio (CAR) to 13.25 percent, he adds. CAR is the ratio of bank's capital to its risk.

As per the new amendments by RBI, banks will be allowed to recognize part of their real estate assets, foreign currency assets and deferred tax assets as capital with suitable hair cuts.

The move, Jayakumar says, will also give more headroom to work on non-performing asset problems. While the credit growth might not be very robust in coming quarters, there will be improvement in asset quality, he adds.

11:45 am FII view: Sakthi Siva of Credit Suisse says with India's price-to-book value versus return on equity premium dropping below 40 percent for the first time since May 2015, the key question for investors is whether valuations have corrected enough.

He thinks not yet, saying he is waiting for India to drop out of the Expensive 4 club before reducing underweight call. He did upgrade Indonesia when it dropped out of the Expensive 4 club last August.

Siva continues to prefer cyclicals regionally and in India. Top picks from the Credit Suisse regional portfolio are HCL Technologies and Hindalco.

11:30 am Macro-economy: The government sticking to the 3.5 percent fiscal deficit number was a pleasant surprise, says Srinivas Varadarajan, Head - Fixed Income & Currencies at Deutsche Bank.

Speaking from sidelines of DB Access India Conference, Vardarajan says that ''there is a clear case for 25 basis points (bps) rate cut by the RBI.'' However, he adds that the rate cut is more likely to come in April.

The technical conditions in run upto the Budget are the reason behind current market rally, which is expected to continue a little longer.

The key events, which could be probable triggers, to watch out from now would be monetary policy cycle and the committee decision on Fiscal Responsibility & Budget Management (FRBM) target, he says.

The market continues to surge ahead with support from banks. The Sensex is up 392.48 points or 1.6 percent at 24171.83, and the Nifty is up 131.35 points or 1.8 percent at 7353.65. About 1823 shares have advanced, 337 shares declined, and 80 shares are unchanged.

It is a relief rally for PSU banks as RBI has provided on capitalisation, approved revaluation reserves (land / property) to be counted as common equity tier 1 capital for banks. SBI management has said that it should get upward of 100 basis points of capital.

SBI is up 9 percent, while BHEL, Hindalco, Adani Ports and Hero MotoCorp are top gainers in the Sensex. Among losers are M&M, ITC, Coal India, Wipro and TCS.

Gold prices fell Rs 91 to Rs 29,135 per 10 grams in futures trade today as participants trimmed their positions, largely in line with a weak trend overseas. Analysts said there is a weakening trend in the overseas markets where gold retreated as stocks advanced, easing demand for a safe-haven assets, which weighed on the precious metal in futures trade.

10:58 am Market Update: The Sensex rallied 394.88 points or 1.66 percent  to 24174.23 and the Nifty climbed 133.05 points or 1.84 percent to 7355.35.

About six shares advanced for every share declining on the BSE.

10:45 am Interview: Mahindra and Mahindra ( M&M ) reported 16 percent rise in total sales to 44002 units year-on-year (YoY) for the month of February.

The domestic sales went up 18.41 percent (YoY) whereas, exports fell 15 percent (YoY), the company reported on Tuesday.

In an interview with CNBC-TV18, Pravin Shah, President and Chief Executive-Automotive at M&M said that the demand in urban market remains to be strong while the rural demand continues to struggle.

Regarding newly launched TUV300 and KUV100, he said both the vehicles are doing well and 27000 KUV100 have been booked so far.

10:30 am Market Expert: The market has taken off sharply since witnessing some volatility on Budget day. Following the highest single-day gain (777 pts) in seven years yesterday, the Sensex has tacked on another 300 points today.

But Ajay Srivastava of Dimensions Consulting has a word of caution: the current bounceback may have some more legs to go but till economic fundamentals solidly change, investors must be cautious to not over invest.

"This is a good opportunity to rebalance your portfolio [and lighten up on stocks that were badly hit]," Srivastava told CNBC-TV18.

He also said the RBI's move yesterday to tweak capital norms will help banks shore up capital but this may be a followed by another NPA hit in the fourth quarter.

10:15 am Jaitley to meet RBI, SEBI: Finance Minister Arun Jaitley will address the boards of Reserve Bank and Securities and Exchange Board of India on March 12, to discuss various financial sector reforms announced in Budget 2016-17.

The address of the finance minister comes in the backdrop of the government's announcement of meeting current year's fiscal deficit target and sticking to the target of 3.5 percent.

The minister would first address the board of Sebi and then RBI in Delhi on March 12, sources said.

It has been a custom that the finance minister addresses RBI board, consisting of RBI governor and existing three deputy governors, after the Budget.

10:00 am Market Check
Equity benchmarks continued to rally with the Sensex rising 408.51 points or 1.72 percent to 24187.86 and the Nifty climbing 120.30 points or 1.67 percent to 7342.60.

The broader markets outperformed benchmarks with BSE Midcap and Smallcap indices gaining 2 percen each. The market breadth was strong as more than seven shares advanced for every shares declining on the Bombay Stock Exchange.

ICICI Bank and SBI were leading contributors to Sensex's gains, up 6-9 percent. Hindalco also gained 6 percent and BHEL was up 6.5 percent on order worth Rs 5,600 crore in Tamil Nadu.

HDFC, HDFC Bank, Axis Bank, Reliance Industries, L&T, Hero and Adani Ports were up 1-5 percent.

ITC retreated on profit booking, down 1 percent after rallying 10 percent in previous session as excise duty hike on cigarettes was on expected lines.

Mahindra & Mahindra slipped over 2 percent on profit taking. Wipro and TCS lost half a percent as rupee recovered sharply in three trading sessions.

Coal India declined 0.4 percent as its February offtake dropped to 45.5 MT compared to target of 47.13 MT and production was down to 51.01 MT against target of 52 MT.

The rupee appreciated for fourth consecutive session today, rising from 68.71 a dollar (at close on Thursday) to 67.7 a dollar today.

9:55 am  New business: IDBI Bank has set an aggressive three-year target of doubling its business and sharply reducing bad assets, the lender said, a day after the government said it would consider ceding control of the state-run bank through a share sale. The bank said it expects to double its business to 10 trillion rupees (USD 147.2 billion) and cut its gross non-performing assets (NPAs) to less than 3 percent by financial year ending March 2019. That compares to gross NPAs of 8.94 percent in the most recently concluded Oct-Dec quarter when the company posted a loss of Rs 2184 crore (USD 321 million).

9:45 am Post Budget interview: "In the long sweep of history, we need 10 or 15 years really to know whether a Budget has been truly historic or not," Minister of Finance (State) Jayant Sinha said at the 'CNBC-TV18 Mint Budget 2016: The Verdict' in the capital on Tuesday. "In the meantime, you get flashes," he added, referring to the rally in the stock and bond markets. According to Sinha, the reaction of the bond market was a better indicator of the credibility of the Budget. The decline in yield on 10-year government bonds to 7.62 percent from 8 percent showed the bond market was convinced about the Budget. The fall in yields would reduce the government's debt burden and give it more finances to implement the various schemes for the deserving, he said.

9:35 am FII view: Sakthi Siva of Credit Suisse says, ''With India's price-to-book versus return on equity (ROE) premium dropping below 40 percent for the first time since May 2015, the key question for investors is whether valuations have corrected enough. We think not yet and are waiting for India to drop out of the Expensive 4 club before reducing our underweight call. We did upgrade Indonesia when it dropped out of the Expensive 4 club last August. We continue to prefer cyclicals regionally and in India. Top picks from the CS regional portfolio are HCL Tech and Hindalco.

9:25 am Market check: In a super rally post Budget also boosted by strong Asian cues, the market is making mighty gains. The Nifty is up 500 points, Sensex rises 1650 pts and Nifty Bank surges more than 1500 points from Budget day lows 

After a super rally, the market seems to be gushing with buyers in last month of the financial year. The Sensex is up 397.05 points or 1.7 percent at 24176.40, and the Nifty up 116.25 points or 1.6 percent at 7338.55. About 753 shares have advanced, 69 shares declined, and 23 shares are unchanged.

SBI, ICICI Bank, BHEL, Adani Ports and Axis Bank are top gainers in the Sensex. M&M, Sun Pharma and Coal India are major losers in the Sensex.

The Indian rupee extended upmove on Wednesday by opening at 67.74 a dollar, up 12 paise compared to 67.86 in previous session. This consistent recovery is led by rally in equity markets on hopes of rate cut post pricing in Union Budget.

The dollar rebounded against the yen and hit one-month highs against the euro after strong US manufacturing data supports views of higher US interest rates.

NS Venkatesh of IDBI Bank said, "The USD-INR strengthened yesterday and will take cues from the way the equity market as well as the crude prices behave. The pair is expected to trade between 67.80-67.90/dollar."

Asia markets were higher in morning trade, taking early cues from overnight gains in Europe and US. Wall Street enjoyed its strongest session in a month on Tuesday, led by financial and technology stocks after encouraging US factory and construction data suggested the world's biggest economy was regaining momentum.

Oil prices dropped in the wake of industry data that showed a huge build in US crude stockpiles.