Nifty ends at 8822, Sensex rises 167 points; HDFC Bank gains 3.6%

3:30 pm Market Closing: Benchmark indices closed higher for second consecutive session, with the Sensex rising 167.48 points to 28468.75. The Nifty ended above 8800 level, up 43.70 points at 8821.70.

The market breadth was balanced today.

Sun Pharma, HDFC Bank, GAIL, ICICI Bank, Cipla and Tata Motors were top gainers while Infosys, Asian Paints, TCS, Hero Motocorp, Wipro, Bharti Infratel, Hindalco and Idea Cellular were under pressure.

3:05 pm Scrap-based steel plants: The government today said it is planning to set up scrap-based steel plants in north and west parts of India to augment the country's production capacity.

"We are examining the feasibility of setting up scrap-based steel plants," Steel Minister Chaudhary Birender Singh said during Make in Steel Conference here.

Stressing that the scrap-based steel plants are environment-friendly, energy-efficient and cost effective, he said that these plants would be on the lines of 'melt and manufacture' steel technology used in the US.

"I would like you to deliberate on the cost-benefit analysis of setting up scrap-based steel plants in north and west India. These regions are important form the perspective of scrap-availability and steel import hubs. The plants will have the capability to produce special high-grade steels, a pre-requisite for 'Make in Steel'," the minister said.

2:55 pm New chairman at IRB: IRB Infrastructure, a wholly-owned subsidiary of IRB Infrastructure Developers said it has appointed former NHAI Chief Rajinder Pal Singh as Chairman to the Board.

An IAS, he has worked in various areas like finance, industry, urban development and infrastructure development.

Singh has also been the Chairman & Managing Director, Punjab & Sind Bank and served as Secretary, Department of Industrial Policy & Promotions.

He was NHAI chairman from 2012 to 2015. Currently, he is on the Board of Directors of Maruti Suzuki India Ltd; Bharati Infratel Ltd and Lodha Developers.

2:25 pm Buzzing: State-run housing company NBCC fell more than 10 percent intraday after the stock adjusted for bonus issue.

The board of directors of the company, on January 4, recommended the issue of bonus shares that would be from its free reserves created out of profit.

The company has fixed February 21 as a record date for ascertaining the eligibility of shareholders for issuance of one bonus share of Rs 2 each on every existing two fully paid-up equity shares, subject to the approval of shareholders through postal ballot, it said on January 13.

With this bonus issue, the share capital of the company will increase to Rs 180 crore (90 crore shares) from Rs 120 crore (60 crore shares).

2:14 pm MFs may trade in commodities soon: With an aim to deepen the nascent commodity market, SEBI is likely to give mutual funds the go-ahead to trade in commodity markets in a month, while the regulator is also in talks with the RBI to allow institutional investors like banks and Foregin Portfolio Investors to trade in the segment.

"Mutual funds' participation in commodities derivatives would be the first one to happen among institutional investors," Securities and Exchange Board of India Chairman UK Sinha said on Friday, and hinted that the move could be implemented in a month.

Sinha, whose term as SEBI Chairman ends on March 1, was speaking to reporters on the sidelines of the regulator's international conference on commodity derivatives.

2:00 pm Market Check
The market remained in positive terrain in afternoon despite flat trade in Europe, led by private banking & financials, healthcare and select oil & gas stocks.

The 30-share BSE Sensex was up 186.31 points at 28487.58 and the 50-share NSE Nifty gained 49.90 points at 8827.90 while the broader markets rose 0.4 percent.

The market breadth was not strong as about 1432 shares advanced against 1201 declining shares on the BSE.

HDFC Bank, the country's second largest private bank, erased more than half of its gains in afternoon trade after the Reserve Bank put the bank back in its FIIs ban list, up 3.5 percent after rising as much as 10 percent in opening trade today.

ICICI Bank, Sun Pharma, Tata Motors, Lupin, Cipla and GAIL gained 1-3 percent while TCS, Infosys, Axis Bank, SBI, Maruti and Asian Paints were under pressure.

European bourses were flat, pausing for breath after a strong rally at the start of the week, as investors eyed economic data and more earnings reports.

Asia markets finished mostly lower, as Samsung Group shares were in focus following the arrest of its chief.

With an aim to deepen the nascent commodity market, SEBI is likely to give mutual funds the go-ahead to trade in commodity markets in a month, while the regulator is also in talks with the RBI to allow institutional investors like banks and Foregin Portfolio Investors to trade in the segment.

"Mutual funds' participation in commodities derivatives would be the first one to happen among institutional investors," Securities and Exchange Board of India Chairman UK Sinha said on Friday, and hinted that the move could be implemented in a month.

Sinha, whose term as SEBI Chairman ends on March 1, was speaking to reporters on the sidelines of the regulator's international conference on commodity derivatives.

On allowing participation of banks, alternative investment funds and foreign portfolio investors (FPIs) in commodities, he said SEBI is in active consultation with the Reserve Bank over the issue.

"Our argument with RBI has been, in any case bank's have huge exposure to commodities through the lending programme.

We have been asking them to disclose that. Let a beginning be made by the corporates in disclosing that and then you yourself discover there is a need to allow them to hedge also," Sinha said.

"We are at an early stage of dialogue and part of the reason is how comfortable RBI is about the financial health of the bank, so they will also have this as a concern when they take that call," he added.

SEBI, which started regulating commodity markets after the merger of Forward Markets Commission (FMC) with the regulator in September 2015, is working towards developing the commodities market by bringing in more products participants like FPIs, insurance and mutual funds.

12:45 pm No Brexit impact on banks: There will be no major impact on Indian banking operations in the UK post-Brexit and the British capital will continue to be the global "financial hub", according to the UK chief of SBI.

Sanjiv Chadha, the SBI's Regional Head for the UK and chair of the Association of Indian Banks in the country, said that Indian banks in the UK are set for a new phase of growth as they prepare to expand operations into subsidiaries.

In reference to Brexit, the banking chief said he did not foresee a major impact on Indian banking operations in the UK and believed that London would continue to be the global "financial hub".

12:30 pm Interview: PNB Gilts aims to replicate the strong performance of the last two quarters in the fourth quarter of the year, says Managing Director SK Dubey, But he also quickly cautions, that it would be difficult as various challenges persist in the market.

According to Dubey, the company has a strategy to short sell whenever the interest rates move adversely.

The company's book stood at Rs 2,500 crore whereas the net worth is at Rs 731 crore.

PNB Gilts reported stellar earnings for the quarter ending December 2016. On a year-on-year basis, it posted a net profit of Rs 66 crore versus Rs 9 crore in the same quarter last year, an improvement of 633.3 percent.

12:20 pm JLR expansion: India will get fresh investments and added product lines from Tata Motors-owned British brands Jaguar Land Rover even as the company has not lined up big-ticket investments for elsewhere across the globe.

C Ramakrishnan, Group Chief Financial Officer, Tata Motors, said, ''There will be some expansion of facilities here in India, where more product lines are getting added but beyond that in the immediate future or a short-term future we are not looking at any major investments of this nature''.

JLR is adding capacity at the assembly plant in Pune where it presently makes five models – Jaguar XE, XF and XJ and Land Rover Discovery Sport and Range Rover Evoque – with the help of knocked down kits imported from JLR's mother plant in the UK.

The move towards making fresh investment at the Pimpri plant in Pune highlights the need for JLR to have more localised products in order to be more cost competitive in the face of increased competition from rivals.

12:00 pm Market Check
Equity benchmarks maintained strong momentum in noon trade despite weakness in Asian peers. HDFC Bank was a key driver today, up 7 percent after FII stake-buy ban removed by the RBI. This lifted the Nifty Bank index nearly 600 points to hit a record high.

More than 2 percent market cap of HDFC Bank already traded on exchanges. The street expects large FIIs buying today, aided by bank's block deals.

The 30-share BSE Sensex was up 243.01 points at 28544.28 and the 50-share NSE Nifty rose 63 points to 8841, outperforming broader markets.

The BSE Midcap and Smallcap indices gained 0.6 percent each as about 1443 shares advanced against 997 declining shares on exchange.

Pharma stocks were in news today. Cadila Healthcare continued to gain after yesterday's strong run, up more than 5 percent as brokerages raised their target prices and earnings forecast on the stock.

Biocon shares gained nearly a percent after the USFDA accepted company's license application for biosimilar version of chemotherapy drug.

Kotak Mahindra Bank and Axis Bank were also in focus on merger rumours even as the two lenders denied all rumours. CLSA said if both banks are merged, then the merged entity will become the largest private bank with Rs 8 lakh crore in assets. CLSA sees a share swap ratio of 0.6 shares of Kotak Mahindra Bank for 1 share of Axis Bank.

BHEL and Idea Cellular fell 1-2 percent in an otherwise strong market, on news that both will be replaced by Indiabulls Housing Finance (up 3.77 percent) and IOC (up 2.3 percent) in the Nifty 50 with effect from March 31.

11:53 am CLSA on Kotak Bank, Axis: CLSA says if Kotak Mahindra Bank and Axis Bank are merged then the merged entity would be among the largest private banks and the merger would allow banks to capitalise on individual strengths.

According to the research firm, branch rationalisation may aid improve productivity/reduce cost-income ratio and Kotak promoters' holdings could fall from 34 percent to 19 percent post merger.

Key challenge would be to align asset quality of the two banks, it feels while saying higher stressed loans at Axis Bank than Kotak Mahindra Bank may raise credit costs.

11:40 am Interview: Biocon Thursday announced the US Food and Drug Administration has accepted Mylan's Biologics License Application (BLA) for biosimilar chemotherapy drug Pegfilgrastim for review. Mylan is Biocon's partner for biosimilar development.

Sharing details on the development with CNBC-TV18 Biocon Chairperson and Managing Director Kiran Mazumdar Shaw said, "This is a very important acceptance."

However, the drug will not be launched immediately as there could be certain patent challenges, she added.

She expects the launch in financial year 2018 or 2019.

She said the USD-3.5-billion US market, is the biggest for the company and that biosimilars will contribute to company's topline growth exponentially.

11:20 am FII View: Mahesh Nandurkar of CLSA says demonetisation hit the December 2016 quarter though it turned out to be a better quarter generally for all domestic-oriented companies barring power and telecom.

Nifty earnings growth of 6 percent turned out to be a tad weaker due to a drag from Tata Motors and Axis Bank, he adds.

He now expects FY18 Nifty earnings growth of 17 percent with small downside risk due to margin concern.

In model portfolio, he removed Tata Motors and reduced the weight for HUL, ITC and Maruti. He raised IT rating to overweight and added GSK Consumer.

Nandurkar removed ITC and Maruti from high-conviction list but added HCL Technologies.

11:00 am Market Check
The market remained strong in morning, though it wiped out some early gains. HDFC Bank retained its top position in buying list, up 6.7 percent after the RBI has withdrawan the limit for purchase of bank's shares.

The 30-share BSE Sensex rose 172.98 points to 28474.25 and the 50-share NSE Nifty gained 41.80 points at 8819.80.

The market breadth also remained in favour of advances. About 1340 shares gained against 927 declining shares on the BSE.

Cadila Healthcare extended its rally, up 4 percent on top of 20 percent surge in previous session as its Moriaya facility did not receive any observations from USFDA post inspection.

The rally also spilled over to other pharma stocks on hopes of more positive vibes from US FDA. Sun Pharma was up 2 percent and Lupin gained 1.4 percent. Wockhardt surged 3 percent.

TCS and Infosys fell more than  1 percent on profit booking. Maruti Suzuki, SBI, Hero Motocorp, Coal India and HUL were other losers.

10:20 am FII View: The recent strife at Infosys raises many question marks and is a cause for concern, said Hugh Young, Managing Director of Aberdeen Asset Management-Asia, one of the largest foreign institutional investors in Indian markets.

Young said that the conflict between the Infosys founders and the software major's board over corporate governance and severance payments to former top executives was not particularly healthy.

Young said the news that Infosys's peer TCS was mulling a buyback of shares was good news as it has a strong balance sheet and surplus cash, adding that other IT companies may follow suit.

10:00 am Market Check
Benchmark indices erased some early gains on account of selling pressure in technology and FMCG stocks. HDFC Group stocks continued to support the market.

The 30-share BSE Sensex gained 178.59 points at 28479.86 and the 50-share NSE Nifty rose 42.90 points to 8820.90 despite mixed Asian cues.

The broader markets also came off day's high, with the BSE Midcap and Smallcap indices rising 0.4 percent each on positive breadth. About 1209 shares advanced against 744 declining shares on the exchange.

There is desperate money coming into the market and the sheer lack of other investment opportunities is compelling investors to run towards equity, says Ajay Srivastava, CEO of Dimensions Corporate Finance Services.

However, he cautions, the market valuations are not cheap and investors need to be picky and ready to take 'serious risks' to see healthy returns.

HDFC Bank jumped 6 percent after the Reserve Bank of India has withdrawn the limit for purchase of bank's shares. The rally also spilled over to HDFC that was up 1.3 percent.

9:50 am Market off early high: Equity benchmarks erased more than half of early gains due to selling pressure in technology and FMCG stocks.

HDFC Bank also came off day's high, up 5.5 percent and HDFC gained 1.5 percent after profit booking while SBI and ICICI Bank turned lower.

The 30-share BSE Sensex was up 145.95 points at 28447.22 and the Nifty 50-share NSE rose 33.15 points to 8811.15.

About 1073 shares advanced against 674 declining shares on the BSE.

9:45 am Nifty changes: State-run BHEL and telecom major Idea Cellular will move out of National Stock Exchange's Nifty 50 index from March 31.

Indiabulls Housing Finance and Indian Oil Corporation will be included in the index in their place.

The changes, announced by Indian Index Services and Product, an arm of NSE, will be effective from March 31, 2017.

Apart from Nifty 50, the exchange has made changes to several indices including Nifty 500, Nifty 100, Nifty Midcap 50, Nifty Smallcap 250, Nifty Next 50.

Besides, changes have also been done in sectoral indices such as metal, private bank, media, bank and commodities.

9:30 am CLSA on Cadila: CLSA says Moraiya outcome for Cadila Healthcare is a big surprise but approvals may take time. The brokerage house has maintained outperform rating on the stock, with a target price at Rs 480 after raising FY18-19 US sales estimates by 4-10 percent leading to 3-9 percent rise in FY18-19 EPS.

It feels near-term outlook for the company is challenging. It expects investor interest to return once more companies resolve US FDA issues.

CLSA believes benefit of Moraiya clearance will be more visible in FY19 than FY18.

9:15 am Market Check
Equity benchmarks started off last day of the week on a spectacular note, with the Senses rising more than 400 points supported by HDFC Bank.

The 30-share BSE Sensex was up 400.89 points or 1.42 percent at 28702.16 and the 50-share NSE Nifty rose 95.60 points or 1.09 percent to 8873.60.

HDFC Bank surged 8.41 percent as RBI says restrictions placed on purchase of bank shares by foreign portfolio investors withdrawn immediately.

The rally also spilled over to HDFC that gained 2.63 percent. Axis Bank, Kotak Mahindra Bank and ICICI Bank surged 1-2 percent.

GAIL and Lupin were other gainers. Cadila Healthcare gained further, up 2.8 percent hitting a 52-week high.

BHEL, Bharti Airtel, Wipro, Infosys, ITC and Reliance were losers.

The Indian rupee slipped in the early trade today. It has opened lower by 5 paise at 67.12 per dollar versus previous close 67.07.

Ashutosh Raina of HDFC Bank says the USD-INR pair has been trading in a very tight range recently, tracking global dollar weakness.

He expects the pair to trade in the 67-67.30/dollar range today with slight weakening bias.

The dollar weakened against a basket of major currencies, due to lower US bond yields and uncertainty over the timing of the Federal Reserve's next interest rate increase.