Europe drives Sensex, Nifty to new 10-mth high; PSU Bank up 2.6%

Europe-led strength in last hour of trade helped the equity benchmarks end at fresh 10-month closing highs on Thursday. Even the likely meeting between NDA and Congress over various issues of Goods & Services Tax (GST) and possible announcement of new RBI governor by weekend also lifted sentiment. Banking & financials, auto, infra and FMCG stocks led the support.

The 30-share BSE Sensex was up 126.93 points or 0.46 percent at 27942.11 and the 50-share NSE Nifty gained 45.50 points or 0.53 percent at 8565. The broader markets also participated in late uptrend as the BSE Midcap and Smallcap indices were up 0.5-0.7 percent.

Nirmal Jain of IIFL said India remained in good stead. "We are seeing that a lot of policy reforms are taking place. Now there is direction to many things... hopefully if monsoon also is good, and GST can go through, all those things put together will put us on a very good sort of platform for a bull market."

European markets rallied after the UK's new Prime Minister Theresa May took office and named her cabinet, bringing stability to the country's political scene post-Brexit. Globally investors also expect easier monetary policy from central banks. Germany's DAX index crossed the 10,000 mark, up around 1.4 percent while France's CAC gained 1 percent and Britain's FTSE was up 0.8 percent.

Meanwhile, ahead of the Monsoon Session of Parliament (that will begin from July 18), the Narendra Modi government reached out to the principal opposition party Congress over the contentious issue of Goods and Service Tax Bill. Union Minister Venkaiah Naidu spoke to senior Congress leaders Ghulam Nabi Azad and Anand Sharma. Both Congress leaders assured Naidu that they will get back to him soon after consultations within their party.

Logistics stocks gained strength on hopes of GST Bill getting passed in Monsoon session. Gati, Snowman Logistics and Patel Integrated Logistics rallied 8-9 percent.

3:30 pm Market closing: After a choppy session, the market has ended at fresh 10-month closing high. The Nifty has ended above 8550 for first time since August 6, 2015. The 50-share index is up 45.50 points or 0.5 percebt at 8565 while the Sensex was up 126.93 points or 0.5 percent at 27942.11.

ICICI Bank, Maruti, BHEL, SBI and ITC are top gainers while ONGC, Infosys, Sun Pharma, M&M and Dr Reddy's Labs were losers in the Sensex.

3:15 pm NDA-Congress to meet for GST issues: Ahead of the Monsoon Session of Parliament, the Narendra Modi government on Thursday reached out to the principal opposition party Congress over the contentious issue of Goods and Service Tax Bill.

Union Minister Venkaiah Naidu spoke to senior Congress leaders Ghulam Nabi Azad and Anand Sharma. Both Congress leaders assured Naidu that they will get back to him soon after consultations within their party.

The Monsoon Session will begin from July 18.

Top Congress leaders had on Wednesday discussed its strategy in parliament on the GST Bill at party president Sonia Gandhi's residence.

Congress has been pressing for a cap of 18 percent as part of the Constitutional Amendment bill to which government is not agreeing.

3:05 pm Market Update: Equity benchmarks extended upside in late trade with the Sensex rising 118.72 points to 27933.90 and the Nifty climbing 41.75 points to 8561.25.

About 1564 shares advanced against 1074 declining shares on BSE. European markets gained 0.8-1.5 percent.

2:59 pm TCS up 1% ahead of earnings: IT services company Tata Consultancy Services   ' first quarter (April-June) profit is likely to fall 4.7 percent sequentially to Rs 6,038 crore but revenue may increase 3 percent to Rs 29,300 crore, according to average of estimates of analysts polled by CNBC-TV18. Earnings will be announced on July 14.

Dollar revenue is seen rising 3.8 percent quarter-on-quarter to USD 4,367.5 million in quarter ended June 2016 and 3 percent in constant currency.

Analysts feel cross currency tailwinds may boost dollar revenue by 70-80 basis points.

2:50 pm Nomura on Kerosene prices hike: The government decision to hike kerosene prices, although staggered over 10 months, sends a positive signal on reforms and will ease the fiscal subsidy burden by Rs 11.9 billion (Rs 1,190 crore), says a report.

According to Japanese financial services major Nomura, every Rs 1/litre rise in kerosene price lowers the under recovery by Rs 8-9 billion (Rs 800-900 crore).

"Hence, from a fiscal perspective, a Rs 2.5 per litre rise in kerosene prices over the next 10 months will lower kerosene's under-recovery by around Rs 21 billion and ease the government's fiscal subsidy burden by Rs 11.9 billion (0.01 percent of GDP)," it said in a research note.

The current under-recovery in kerosene is Rs 13.1 per litre, of which the government subsidises Rs 12 per litre with the rest (Rs 1.1 per litre, as of now) borne by upstream oil companies.

The government has given a directive to oil companies to increase kerosene prices in a staggered manner, by Rs 0.25 per litre every month until April 2017 (a cumulative increase of Rs 2.5 per litre in 10 months).

2:40 pm Amtek Auto deal: The sale of Amtek Auto 's German subsidiary Neumayor Tekfor is on track and will be completed before September end, reports CNBC-TV18.

Valuation for the deal has been agreed upon with the buyer and currently, paperwork is being sorted, sources say.

This asset monetisation plan will help reduce Amtek's debt by Rs 6,000-7,000 crore. Amtek has consolidated debt of Rs 14,800 crore which it plans to bring down by two-thirds over 2-3 years.

Amtek acquired the company in 2013.

2:20 pm Crude rebounds: Crude prices rose to recoup some of their big losses from the previous session, but gains are likely to be limited by mounting concerns the global glut in oil is not going away soon after two major agencies issued bearish reports.

Brent crude was up 40 cents at USD 46.66 a barrel. US crude rose 40 cents to USD 45.15 a barrel.

2:00 pm Market Check: The market is holding gains with the Nifty hovering around 8550. The 50-share index is up 29.95 points or 0.3 percent at 8549.45 and the Sensex is up 80.61 points or 0.3 percent at 27895.79. About 1556 shares have advanced, 1020 shares declined, and 166 shares are unchanged.

ICICI Bank, SBI, Maruti, GAIL and Adani Ports are top gainers while ONGC, Infosys, M&M, Sun Pharma and Wipro are major losers in the Sensex.

The Southwest Monsoon has covered the entire country two days ahead of its normal date after reaching the last frontiers of Kutch and Western
Rajasthan.

According to India Meteorological Department's (IMD), the country has so far received four per cent more rainfall than normal. All sub regions have been receiving good rainfall except the Northeast and east region of the country, where the deficiency has reached 23 percent.

1:45 pm International markets: Ahead of the Bank of England policy meeting to be held later during the day, Hartmut Issel of UBS says the central bank is in a predicament whether or not to cut interest rate.

"Pound has fallen. The central bank may cut rate by 25 bps today and another 25 bps by the end of this year to save the economy from running  into recession," he said.

However, no quantitative easing will take place in this meeting.

He added that cues from the US earnings season will also factor in shaping the European indices, going forward.

1:30 pm FII view: Even as global markets have rallied since the Brexit vote and no longer appear cheap, Andrew Holland of Ambit Investment Advisors is less worried about the Indian market. In an interview with CNBC-TV18, Holland said that though people are hoping for growth recovery on back of strong monsoon and 7th Pay Commission, earnings recovery will likely be patchy. Ambit has been adding pharmaceutical to its portfolio thanks to low valuations on back of regulatory issues. Private banks, cement and non-banking finance companies too have high valuations, lessening the previous excitement, he said. "However, once the economy starts growing in second half, private banks will be the first to benefit."

The Sensex is up 62.19 points at 27877.37, and the Nifty up 20.80 points at 8540.30. About 1509 shares have advanced, 969 shares declined, and 162 shares are unchanged.

Maruti, SBI, ICICI Bank, GAIL and Tata Motors are top gainers while ONGC, M&M, Sun Pharma, Infosys and Cipla are losers in the Sensex.

Amid a weakening global trend and profit-booking, gold futures fell Rs 232 to Rs 31,531 per 10 gm today as participants trimmed their positions. Market analysts said the fall in gold futures was mostly in tune with a weak trend overseas as investors await stimulus from policy makers and profit-booking by speculators.

12:50 pm Nifty reclaims 8550: Equity benchmarks gained further in afternoon trade with the Nifty reclaiming 8550 for the first time since August 11, 2015.

The Sensex was up 71.50 points at 27886.68 and the Nifty rose 21.65 points to 8541.15. About 1516 shares advanced against 954 declining shares on BSE.

12:40 pm Europe opens: European stocks opened higher after the UK's new prime minister named her closest team of officials, removing more uncertainty about the country's political scene after the Brexit vote.

The pan-European STOXX 600 was up 0.75 percent.

European stocks closed mostly lower on Wednesday as the UK awaited new leader but Theresa May's appointment as the new prime minister came soon after in the early evening, after David Cameron tendered his resignation to the Queen.

12:30 pm Market Expert: Even as global markets have rallied since the Brexit vote and no longer appear cheap, Andrew Holland of Ambit Investment Advisors is less worried about the Indian market.

In an interview with CNBC-TV18, Holland said that though people are hoping for growth recovery on back of strong monsoon and 7th Pay Commission, earnings recovery will likely be patchy.

12:15 pm Analyst on IT earnings: With the first earnings season getting under way today, IT stocks will be in focus today, with TCS slated to report results later today and Infosys tomorrow.

Talking about his expectations from the two firms, Govind Agarwal of Prabhudas Lilladher expects  Tata Consultancy Services (TCS) to clock sequential constant currency revenue growth of 4 percent.

"Cross currency impact will be positive in June quarter by about 30 bps. So, we expect dollar growth of 4.3 percent," he said.

He expects Infosys to clock similar constant currency growth of 4 percent while dollar revenue growth is seen at 4.1 percent but he added that margins may be pressured due to wage hikes and increased visa costs.

12:00 pm Market Check
Equity benchmarks gained some strength amid volatility while the broader markets continued to outperform with the BSE Midcap and Smallcap indices rising 0.2 percent and 0.65 percent, respectively.

The 30-share BSE Sensex was up 52.77 points at 27867.95 and the Nifty gained 18.15 points at 8537.65. The market breadth remained strong as about 1433 shares advanced against 944 declining shares on the Bombay Stock Exchange.

Wholesale price index inflation increased to 1.62 percent in June against 0.79 percent in May, which was higher than forecast of 1.15 percent.

The Indian rupee gained further in noon trade, up 13 paise to 66.91 a dollar.

11:55 am Who is new RBI chief? If NITI Aayog chief Arvind Panagariya is made the governor of the Reserve Bank, as is being speculated in some quarters, it could result in at rate cuts of 25 basis points each in the third and fourth quarters of fiscal year 2017, according to Asianomics.

The firm's Deputy Chief Economist Sharmila Whelan said Panagariya was "quite a dove" but she added that he had an "impressive CV, from World Bank to Asian Development Bank to IMF."

She maintained that the due to soaring vegetable prices in India, headline CPI inflation will remain high for next 2-3 months, and then eventually come down.

However, she doesn't expect any rate hike in the US, but sees a possibility of more quantitative easing (QE).

11:45 am Fund raising: Drug firm Wockhardt has sought shareholders' approval for raising up to Rs 1,200 crore through issuance of non-convertible debentures (NCDs) on private placement basis.

The company said it will utilise the money to re-pay or pre-pay term loan availed by it and for general corporate purposes.

In a notice for AGM, Wockhardt said: "Consent of the company... is hereby accorded to the Board of Directors... to offer, issue and allot secured/unsecured redeemable non-convertible debentures (NCDs) on a private placement basis in one or more series/tranches, up to an amount not exceeding Rs 1,200 crore."

11:30 am IPO details: L&T Infotech's Rs 1,243-crore IPO got oversubscribed 11.67 times on Wednesday, eliciting strong response with the number of applications crossing 1 million on the final day.

The IPO received bids for 14,29,46,840 shares against the total issue size of 1,22,50,000 shares, data available with the NSE till 1930 hrs showed.

Quota reserved for qualified institutional buyers (QIBs) was oversubscribed 19.90 times, while that of HNI 10.75 times, sources said.

The category reserved for retail investors was also oversubscribed 7.30 times.

The market is still in red with the Sensex down 30.98 points at 27784.20. The Nifty is down 5.55 points  at 8513.95. About 1271 shares have advanced, 930 shares declined, and 111 shares are unchanged.

GAIL, Tata Motors, Maruti, Asian Paints and Bharti are top gainers while ONGC, M&M, Sun Pharma, Dr Reddy's and Cipla are major losers in the Sensex.

Crude prices rose to recoup some of their big losses from the previous session, but gains are likely to be limited by mounting concerns the global glut in oil is not going away soon after two major agencies issued bearish reports.

A bearish assessment on the oil market from the International Energy Agency (IEA) sent both benchmarks down more than 4 percent by the close of trading. The glut in the global oil market is persistent and is putting a lid on crude prices despite strong demand growth and steep declines in non-OPEC production, the IEA said.

10:30 am Earnings Poll: IT services company Tata Consultancy Services  ' first quarter (April-June) profit is likely to fall 4.7 percent sequentially to Rs 6,038 crore but revenue may increase 3 percent to Rs 29,300 crore, according to average of estimates of analysts polled by CNBC-TV18.

Dollar revenue is seen rising 3.8 percent quarter-on-quarter to USD 4,367.5 million in quarter ended June 2016 and 3 percent in constant currency.

Analysts feel cross currency tailwinds may boost dollar revenue by 70-80 basis points.

10:15 am FII View: Mark Mobius of Templeton EM Group says, "The Brexit event actually brightens our view of emerging markets and the investment potential we see for the long term."

He feels the Brexit vote shows the world that political instability is not concentrated in emerging markets, it can be found even in developed markets.

"While volatility may be with us a while, the markets have already begun to readjust. Part of the volatility was related to the surprise element of the vote. The markets simply did not price the 'leave' scenario in properly," he says.

Also read - TCS Q1 profit seen down 4.7%, dollar revenue growth may be 3.8%: Poll

10:00 am Market Check
Equity benchmarks continued to consolidate for the second consecutive session today with the Nifty hovering around 8500 level while the broader markets outperformed. The BSE Midcap and Smallcap indices gained 0.2-0.5 percent.

The 30-share BSE Sensex was down 10.66 points at 27804.52 and the 50-share NSE Nifty fell 3.90 points to 8515.60. The market breadth was positive as about 1132 shares advanced against 684 declining shares on the Bombay Stock Exchange.

Max India lost 5 percent to Rs 171 after listing at Rs 180 on National Stock Exchange.

9:55 am Bonds: The New Development Bank (NDB) of the BRICS countries, including India, announced plans to issue green bonds in Chinese yuan to raise funds for clean energy and infrastructure projects.

The bank jointly founded by the BRICS (Brazil, India, China and South Africa) and headquartered in Shanghai, plans to issue 3 billion yuan worth of five-year bonds denominated in Chinese currency on July 18.

Bank of China has been mandated as the lead manager on the deal, with China Development Bank (CDB), China Construction Bank (CCB), Industrial and Commercial Bank (ICBC) of China, HSBC and Standard Chartered in the underwriting group.

9:45 am Pulse: With pulses still ruling as high as Rs 200 per kg, the government today said it is taking several measures to boost domestic output and imports, besides taking action against hoarders to control rates.

"The central government is taking several measures to control the price rise of pulses," Agriculture Ministry said in a statement.

"On one hand, the government is trying to give relief to citizens by importing pulses from foreign countries or taking action against hoarders, on the other hand the government has taken several steps to increase pulses production and to incentivise pulses growing farmers," it added. Dal prices have soared up to Rs 198 per kg in the retail markets due to fall of production in last two crop years at about 17 million tonnes in view of drought.

9:30 am Rating: Rating agency India Ratings affirmed the long-term issuer ratings on four state-owned banks at AAA, apart from maintaining stable outlook on them.

The agency affirmed ratings of SBI, Bank of Baroda, Union Bank of India and Canara Bank.

"The ratings is driven by expectations of continued strong support from the government," it said in a report. For SBI, it said the expected support from the government is backed by the bank's quasi-sovereign risk status and huge systemic importance. The government owned 60.18 percent in SBI as of March 2016.

The market has opened in red but the Nifty has managed to hold 8500. The Sensex is down 1.70 points at 27813.48, and the Nifty is down 6.40 points at 8513.10. About 292 shares have advanced, 160 shares declined, and 27 shares are unchanged.

GAIL, Bharti Airtel,L&T, HDFC Bank and Coal India are top gainers while Bajaj Auto, Wipro, Sun Pharma, ONGC and M&M are losers in the Sensex.

The Indian rupee opened with marginal gain of 5 paise at 67 per dollar versus previous close 67.05. The yen strengthened versus the dollar. The pound slipped amid Theresa May's elevation as Britain's new prime minister.

Mohan Shenoi of Kotak Mahindra Bank said, "Global equity market rally of the last few days has slowed down. The market focus is now on Bank of England's MPC meeting with an expectation of rate cut or stimulus."

"The Bank of Japan stimulus package is also widely expected. Global currency markets are flat except yen weakness across the board. The trading range for the USD-INR is seen between 66.95-67.25/dollar for the day," he added.

Asian markets appeared to have lost some of its momentum, trading mixed at the open, after US stocks closed near the flatline but still managed to make it further into record territory.

Australia's ASX 200 was up 0.23 percent, boost by a 0.42 percent increase in the heavily-weighted financials subindex. In Japan, the benchmark Nikkei 225 was up 0.31 percent, while the Topix was up 0.3 percent. Across the Korean Strait, the Kospi was down 0.19 percent.

Markets have rebounded in recent sessions on the expectation of further stimulus measures in Japan and in the UK.

US stocks ticked just enough for the S&P 500 and Dow industrials to set record highs, with investors expecting upbeat earnings to keep the rally going.

Crude prices rose in early Asian trading after big losses in the previous session spurred by mounting concerns that the global glut in oil is not going away soon after the latest bearish data out of the United States.