Nifty ends above 8600, Sensex climbs 248 points; banks surge

03:30 pm Market check: The market ended on strong note. The Sensex was up 247.83 points or 0.9 percent at 28446.12 and the Nifty was up 84.25 points or 0.9 percent at 8608.05. About 1552 shares advanced, 1266 shares declined, and 165 shares were unchanged.

Axis Bank, BHEL, HDFC, Cipla and Dr Reddy's Labs were top gainers while Vedanta, Wipro, Hero, M&M and TCS were losers.

03:00 pm Market outlook: The recent global rally is a relief rally from global pressures, but the chances of the Indian market rising for the next few months are rather low, says Andrew Holland, CEO of Ambit Investment Advisors. He sees Nifty trading in the 8000-8500 zone.

He feels other than Greece, investors are also trying to forget the problems in China and expectations that the Fed might delay interests rate, so that has given global markets a bit of a fillip, he adds.

But, "I don't think we're (Nifty) getting higher from here. In fact, if anything I think we're going to go down from here and I think we're going to touch the lower end of our range which is 8000-8500 Nifty. So volatility has just gone away for the time being but it's going to come back and bite us quite hard in the next few months," he says.

02:45 pm YES Bank on FDI cap: Approval of composite FDI cap, while may appear procedural, is a significant reform for the economy as a whole as there will be more capital flowing into the system and significantly easing the procedural investment decisions by foreign investors, says Rana Kapoor, MD & CEO, YES Bank.

For the banking sector in particular, it is a great development. YES Bank has already got board approval in April 2015 and an enabling approval from shareholders for increasing the FII limit upto 74 percent in the AGM in June 2015.

Currently FII holding in YES Bank is below 49 percent. "Therefore from bank's capital raising perspective we now have head room to substantially increase the FII holding, given intensive FII interest in bank in the past. This will enhance flexibility of various capital raising options including ADR/ QIP plans," he adds.

02:30 pm Brokerage on trade deficit: India's trade deficit, that was released late Wednesday evening, widened marginally to USD 10.8 billion in June from USD 10.4 billion in May. The rise in import volumes, brokerage house Nomura believes, suggests that domestic demand is recovering.

In its report Nomura explains a large part of the weakness in both exports and imports is price-driven.

The brokerage expects year-on-year (YoY) import growth to turn positive once base effects from the sharp fall in low commodity prices wanes in Q4 2015. Based on the trade data from April-June, it estimates that the current account deficit (CAD) will widen to 2.1 percent of GDP in Q2 2015 from 0.3 percent of GDP in Q1 2015.

02:20 pm SBI gains: India's largest lender State Bank of India has put non-performing assets (NPAs) worth Rs 4400 crore on the block, say sources. It is looking to sell 66 bad loan accounts to asset restructuring companies (ARCs).

The stock was quoting at Rs 271, up Rs 2.70, or 1.01 percent.

02:00 pm Market Check
The market climbed further in afternoon trade with the Nifty reclaiming 8600 level for the first time since April 20, led by banking & financials and index heavyweights like Reliance Industries & Infosys.

The Sensex gained 202.97 points or 0.72 percent at 28401.26 and the Nifty rose 71.30 points or 0.84 percent to 8595.10. About 1546 shares have advanced, 1132 shares declined, and 163 shares are unchanged on the BSE.

Bank Nifty outperformed, trading at highest level since March 19, up 1.92 percent or 360.45 points at 19,176.70. Axis Bank gained nearly 5 percent after Finance Minister Arun Jaitley said the cabinet has approved composite cap on FDI. Kotak Mahindra Bank shot up 4 percent to hit a record high of Rs 743.

Coal India and Dr Reddy's Labs also hit all-time high. HDFC, HDFC Bank, Reliance Industries, ICICI Bank, Cipla and NTPC rallied 1-2 percent. However, M&M, L&T, Wipro, Vedanta and GAIL lost 0.3-1 percent.

2:50 pm Market outlook: While the market may be within striking distance of all-time high, it continues to be overvalued, says Nilesh Shetty of Quantum AMC.

In an interview to CNBC-TV18, Shetty says there is a significant disconnect between what is happening in the stock market and what is happening on the ground level.
Shetty says the institutional flows can drive the market further but there is no taking away the fact that the entire last year has been a disappointment and earnings cycles have been weak for quite some time now.

While sectorally Shetty is bullish on largecap IT stocks, he says he will be very surprised if anyone makes any strong returns from the market from a one-year perspective.

The bulls are unstoppable today and 8600 does not seem to be far today. The 50-share index is up 64.10 points or 0.7 percent at 8587.90.The Sensex is up 180.98 points or 0.6 percent at 28379.27. About 1516 shares have advanced, 1082 shares declined, and 169 shares are unchanged.

Banking stocks like Axis Bank and HDFC twins are fired up as Finance Minister said cabinet has approved composite cap on FDI. Reliance, NTPC are other top gainers in the Sensex. M&M, Wipro, Vedanta, Hero MotoCorp and ITC are among laggards.

Gold futures fell 0.25 percent to Rs 26,027 per 10 grams on Thursday as participants went about reducing exposure in tandem with a global trend. Globally, gold lost as much as 0.3 percent to trade at four-month low of USD 1,146.19 in Singapore on Thursday. Analysts said a weakening trend overseas after US Fed Chair Janet Yellen indicated an interest rate hike this year, boosting the dollar and curbing demand for the precious metal as an asset, weighed on gold prices.

12:58 pm Market Update: The Sensex gained 155.58 points or 0.55 percent at 28353.87 and the Nifty rose 54.35 points or 0.64 percent to 8578.15. About 1487 shares have advanced, 1068 shares declined, and 153 shares are unchanged on the BSE.

12:45 pm: Finance Minister Arun Jaitley says: Cabinet approved composite cap on FDI and review of FDI policy on various sectors.

Axis Bank rallied 3.6 percent. Yes Bank gained 3 percent and Pipavav Defence climbed 6 percent.

Jaitley says AP Shah panel will submit its report on MAT next week.

12:30 pm Steel sops?: A Credit Suisse report has recently suggested that the steel sector is expected to be a key source of stress for banks in FY16 and FY17. Gross banking credit to steel sector stands at Rs 2.77 lakh crore and 54 percent of total credit exposure is accounted by top eight steel projects, sources tells CNBC-TV18.

Sources are suggesting that banking secretary has sought urgent intervention from steel ministry to ease constraints of steel companies.

Expressing his concern that steel projects are facing issues of cost overruns and erosion of networth, the banking secretary highlighted eight steel projects with sub-optimal level of production. They are Bhushan Steel, Electrosteel, Essar Steel, Jindal Stainless, Usha Martin, Visa Steel, Bhushan and Monnet Ispat.

The banking secretary has asked his steel counterpart to allow sale of iron ore, including low grade of ore, via NMDC, oil marketing companies and SAIL till auction of mines kick off. He has also asked the steel secretary to identify logistics required to transport iron ore and avail benefit of railways for classified primary steel projects.

12:15 pm Market Expert: While the market may be within striking distance of all-time high, it continues to be overvalued, says Nilesh Shetty of Quantum AMC.

In an interview to CNBC-TV18, Shetty says there is a significant disconnect between what is happening in the stock market and what is happening on the ground level.

He believes, the institutional flows can drive the market further but there is no taking away the fact that the entire last year has been a disappointment and earnings cycles have been weak for quite some time now.

While sectorally Shetty is bullish on largecap IT stocks, he says he will be very surprised if anyone makes any strong returns from the market from a one-year perspective.

12:00 pm Market Check
The market continued to see buying interest in noon trade. The Sensex gained 134 points at 28332.29 and the Nifty advanced 43.60 points to 8567.40, supported by banking & financials, auto and pharma stocks.

The broader markets, too, gained strength. The BSE Midcap and Smallcap indices rose 0.9 percent and 0.6 percent, respectively. About 1387 shares have advanced, 991 shares declined, and 148 shares are unchanged on the Bombay Stock Exchange.

Tech Mahindra and BPCL rallied more than 2 percent. HDFC, Kotak Mahindra Bank, HDFC Bank, Reliance Industries and Sun Pharma gained 0.8-1.8 percent. However, M&M, Vedanta, Hindalco, Wipro, Hero Motocorp, NMDC and Bank of Baroda declined 0.6-1 percent.

Axis Bank surged 2.8 percent and Yes Bank gained 1 percent. The cabinet today is expected to clear a proposal to do away with the distinction between different types of foreign investments through a composite cap on all kinds of FDI investments

The rally in bank stocks may be on hopes of some relief for distressed steel companies. Sources told CNBC-TV18 that banking secretary has asked steel ministry to consider an effective anti-dumping duty and levy of appropriate duties.

Pipavav Defence surged 6 percent after Anil Ambani said the company will invest an additional Rs 5,000 crore over next few years towards indigenisation and that it will develop "combat management systems" for future naval vessels.

Globally, Asian markets remained steady as Greek parliament voted in favour of a new bailout plan. European markets, too, are expected to open higher. Dollar index rose above the 97 mark on expectations of a rate hike in US as early as September.

11:50 am Order book: Siemens said it has bagged a Rs 123-crore order from Power Grid Company of Bangladesh at two sites located in Dhaka. In a BSE filing, Siemens Ltd said it has "won a crucial turnkey order worth approximately Rs 123 crore from Power Grid Company of Bangladesh." "The scope of work for the project involves design, procurement, supply, installation, testing, commissioning of 230/132kV GIS Substation at Shyampur and 132/33kV GIS Substation at Dhamrai- both sites located in Dhaka," it added.

11:30 am Biocon IPO: Pharmaceutical firm Biocon has fixed a price band for an initial public offering of its subsidiary Syngene International at Rs 240-250 per share. The public issue is going to open for subscription on July 27 and will close on July 29. The research arm of biotechnology major Biocon has received the approval from capital markets regulator SEBI for IPO in June after filing draft red herring prospectus (DRHP) through its lead merchant banker Axis Capital in April.

The market is still holding up early gains. The Sensex is up 150.04 points or 0.5 percent at 28348.33, and the Nifty up 44.40 points or 0.5 percent at 8568.20. About 1366 shares have advanced, 824 shares declined, and 134 shares are unchanged.

Axis Bank, HDFC twins, Reliance and Tata Steel are top gainers in the Sensex. Among the losers are Vedanta, M&M, Hindalco, Wipro and Hero MotoCorp.

The Asian Development Bank (ADB) has cut its 2015 and 2016 growth forecasts for China and the rest of Asia, largely as a result of the slower than expected growth in the region's largest economy and in developed economies elsewhere.

Developing Asia is now expected to grow 6.1 percent and 6.2 percent this year and in 2016 against the ADB's March forecast of 6.3 percent for both years, the bank said in its 2015 outlook supplement released on Thursday.

Oil prices rebounded in Asia after a sharp decline the day before, as traders try to get a handle on the full implications of Iran's landmark nuclear deal with major powers. Brent crude for August advanced 45 cents to USD 57.50.

10:58 am Market Update: The Sensex rose 151.97 points to 28350.26 and the Nifty gained 46.20 points at 8570. About 1364 shares have advanced, 821 shares declined, and 135 shares are unchanged on the BSE.

10:45 am Rain deficiency?: While the official weatherman - India Meteorological Department (IMD) - has predicted a deficient monsoon with July rains slowing down by 33 percent , the relatively new weatherman Skymet has given a contrarion forecast of normal rains. They maintain it will be 104 percent of the LPA for July. Speaking to CNBC-TV18, GP Sharma, VP, Skymet said there is no need to press panic button just yet. He said as of July 15, the deficiency stood at 6 percent. Maharashtra and Gujarat may see rains by July 20, which is earlier than IMD's July 23 forecast.

He agreed El Nino is growing in strength and the effect may spill over to 2016. But there are other positive factors that can mitigate the impact of El Nino, he said.

Pranjul Bhandari of HSBC said there are three mitigating factors that can counter El Nino. "The translation from El Nino to drought to higher food prices to rural demand is not really very clear." Any step taken by the government to expedite imports, exports, release of food stocks can actually allow inflation, she said adding even the rural demand is a function of much more diversified agricultural sector. The impact of no rain does not equal no demand, she explained.

She points out sowing pattern and grain stocks as second mitigating factor. Because rains were so much better in June, sowing looks quite healthy compared to last few years. At the same time, stocks in the granaries are at decent levels and moisture in the soil is also at decent levels.

10:30 am Shares of South Indian Bank fell more than 7 percent intraday on dismal performance in the quarter ended June. Profit during the quarter dropped 48.4 percent year-on-year to Rs 65.29 crore, impacted by lower net interest income and other income. The fall in provisions & tax expenses, however, limited the profit decline.

On sequential basis, profit shot up 300.1 percent due to lower base in previous quarter. In Q4FY15, profit dropped 86.9 percent Y-o-Y to Rs 16.32 crore due to 387 percent rise in provisions.

Net interest income (the difference between interest earned and interest expended) declined to Rs 340.34 crore during April-June quarter compared to Rs 340.88 crore in the same quarter last year. Other income (non interest income) during the same period slipped to Rs 103.83 crore from Rs 121.16 crore.

Provisions dropped 16 percent year-on-year (down 42.3 percent sequentially) to Rs 79.51 crore while tax expenses declined 16.2 percent Y-o-Y (up 230.5 percent Q-o-Q) to Rs 36.09 crore.

Asset quality deteriorated as gross non performing assets (NPA) increased by 35 basis points Y-o-Y (up 14 bps Q-o-Q) to 1.85 percent and net NPA climbed 30 bps year-on-year (up 25 bps sequentially) to 1.21 percent in the quarter gone by.

10:15 am Fed rate hike soon?: Abhay Laijawala, Deutsche Bank said with the anxiety over Greece and China ebbing, expectations of a Fed liftoff will be back on the table for financial markets.

"Our US economics team believes that US Fed is on track for a September liftoff and it may emerge as the most significant event for emerging market liquidity," he added.

Laijawala said over the past 2-3 years, there has been a generally negative correlation between US 10-year bond yield and MSCI EM/MSCI India, implying that periods of rising US bond yields have led to an environment of subdued foreign inflows for emerging markets.

10:00 am Market Check
The market extended rally with the Nifty inching towards 8600 led by banking & financials, oil & gas, technology and pharma stocks. The broader markets also traded in line with benchmarks, rising 0.6 percent each.

The Sensex rose 170.84 points to 28369.13 and the Nifty gained 50.30 points at 8574.10. About 1272 shares have advanced, 555 shares declined, and 113 shares are unchanged on the BSE.

Axis Bank topped the buying list on Sensex, up 2.7 percent followed by HDFC, Reliance Industries, Bajaj Auto and Tata Steel with more than 1 percent upside. However, M&M, L&T, Hero Motocorp and GAIL fell marginally.

9:50 am FII view: Abhay Laijawala of Deutsche Bank says, "With the anxiety over Greece and China ebbing, expectations of a Fed lift-off will be back on the table for financial markets. With the FOMC meeting scheduled for September, the market will start to price in a lift-off then, unless some counter factors emerge. Our US economics team believes that US Fed is on track for a September liftoff. The Fed lift-off may emerge as the most significant event for emerging market liquidity. Over past 2-3 years, we have noted a generally negative correlation between US10yr bond yield and MSCI EM/MSCI India, implying that periods of rising US bond yields have led to an environment of subdued foreign inflows for emerging markets."

9:30 am Buzzing: Food processing company Hatsun Agro Products gained almost 20 percent intraday on Thursday after it reported four-fold jump in first quarter net profit.

The company's April-June quarter net profit increased to Rs 28.7 crore from Rs 7.3 crore in the same quarter same fiscal.

It's total income also jumped by 23.3 percent to Rs 867 crore versus Rs 703.2 crore.The company at its meeting held on July 15, 2015, has declared interim dividend of Rs 1.50 (150 percent) per equity share for the financial year 2015-16.

The market has opened in green territory. The Sensex is up 89 points or 0.3 percent at 28287.29. The Nifty is up 31.15 points or 0.4 percent at 8554.95. About 617 shares have advanced, 149 shares declined, and 71 shares are unchanged.

Tata Steel, Axis Bank, ONGC, HDFC and Bajaj Auto are top gainers in the Sensex. Among the losers are HUL, BHEL, Hero, M&M and NTPC.

The Indian rupee opened lower in early trade. It slipped 9 paise to 63.50 per dollar against previous day's closing value of 63.41 a dollar.
 
Mohan Shenoi of Kotak Mahindra Bank said, "Grexit having been averted, the focus of markets has now shifted back to US monetary policy with Yellen's testimony suggesting a September Fed rate hike."
 
Asian markets have opened higher this morning as Athens approved the bailout plan. The Nikkei moves higher for a fourth day and has now moved to a new two-week high as investors cheered a weaker currency. The yen is at a 3 week low. US stocks closed mildly lower as investors continue to focus on Greece.
Meanwhile US Federal Reserve Chairman Janet Yellen reiterates last Friday's statement that the central bank is on pace to raise rates this year if the economy evolves as expected.

In Greece, Athens finally passed strict austerity measures needed to secure a debt deal from its creditors. The verdict comes ahead of Greek payment due to the European Central Bank on Monday. An ECB rates decision is due on Thursday, with President Mario Draghi likely to face questions on a decision on emergency liquidity assistance for Greece. The central bank is widely expected to increase funding.