Nifty ends below 8200, Sensex in green; Bharti down 3%, BHEL up

3:30 pm Market close: After a lot of volatility, the market ended in green.  The Sensex was up 47.79 points or 0.2 percent at 26643.24, and the Nifty up 12.75 points or 0.2 percent at 8192.25. About 1800 shares have advanced, 953 shares declined, and 689 shares are unchanged.

Coal India, BHEL, Axis Bank, GAIL and ICICI Bank were top gainers while Bharti Airtel,Hero MotoCorp, Tata Motors, Tata Steel and Wipro.

2:59 pm Market Update: Benchmark indices remained higher with the Sensex rising 85.20 points to 26680.65 and the Nifty climbing 27.10 points to 8206.60.

About 1827 shares advanced against 840 declining shares on the BSE.

2:50 pm Morgan Stanley on LIC Housing: Morgan Stanley has downgraded LIC Housing Finance to equal-weight from overweight, citing weak and uncertain revenue outlook driven by unexpected lending rate cuts by banks.

The brokerage house also slashed target price to Rs 560 (from Rs 700 earlier) after it cut FY17/18/19 EPS estimates by 1 / 16.5 / 22 percent on lower net interest margin (NIM) and loan growth.

Average NIM estimate for FY18-19 is reduced by 35 basis points, and FY16-19 loan CAGR to 12 percent from 16 percent due to both balance transfers and demonetisation.

2:35 pm Buyback: Balrampur Chini Mills, the country's second-largest sugar firm, today announced buyback of equity shares worth Rs 175 crore through tender offer.

In a BSE filing, the company said it will buyback one crore equity shares at a face value of Rs 1 each from the equity shareholders on a proportionate basis.

The buyback of equity shares would be through a tender offer route at a price of Rs 175 per share payable in cash.

The company has fixed January 13 as record date for determining the entitlement and the names of the shareholders, who are eligible to participate in the buyback offer. Axis Capital Ltd is manager to the buyback offer.

2:20 pm Cement sector outlook: Demonetisation is likely to pull down growth of the cement sector this fiscal to 4 percent and may impact the debt level of small and medium producing firms, says a report.

Cement output is estimated to grow around 4 percent in 2016-17 as against earlier projection of 4-6 percent, said India Ratings and Research (Ind-Ra) in its report.

"Cement production is likely to grow by around 4 percent in 2016-17. The agency earlier estimated 4-6 percent growth for 2016-17," said Ind-Ra.

2:00 pm Market Check
Benchmark indices gained strength again amid choppy trade in afternoon, tracking positive global cues. Banks, FMCG and infra stocks continued to support market.

The 30-share BSE Sensex was up 85.50 points at 26680.95 and the 50-share NSE Nifty rose 25 points to 8204.50. The BSE Midcap index climbed 0.6 percent and Smallcap was up 1 percent as more than two shares advanced for every share falling on the exchange.

ITC, ICICI Bank, Axis Bank, GAIL, Coal India and BHEL were top gainers among Sensex 30 stocks, up 1-2 percent while Infosys, HDFC Bank, Tata Motors, Hero Motocorp, HDFC and M&M were under pressure

Bourses in Europe started jumping higher on good figures from China and Europe. The pan-European Stoxx 600 was 0.75 percent higher with all sectors and bourses trading in positive ground.

Oil prices rose in the first trading hours of 2017 today, buoyed by hopes that a deal between OPEC and non-OPEC members to cut production, which kicked in on Sunday, will be effective in draining a global supply glut. Oil markets were closed on Monday after the New Year's holiday.

International Brent crude oil prices were up 0.76 percent, at USD 57.27 a barrel. US benchmark West Texas Intermediate crude oil prices were up 0.76 percent, at USD 54.13 a barrel.

1:45 pm European market: Bourses in Europe started jumping higher on good figures from China and Europe.

The pan-European Stoxx 600 opened 0.52 percent higher with all sectors trading in positive ground.

Investors are starting 2017 confident after solid manufacturing activity data in Europe and China. On Tuesday morning, data showed French inflation reaching its highest level since May 2014. French consumer prices increased 0.8 percent year-on-year, driven essentially by an increase in energy prices. Earlier, figures showed Chinese factory activity growing more than expected in December.

1:30 pm Union Budget: The government will be presenting its Union Budget 2017-18 on February 1.

Prime Minister Narendra Modi on October 26 had clealry indicated that Budget 2017 would be presented a month in advance.

Modi had asked the states to align their plans with changed date of Budget presentation. He further had added that the new system would ensure speedier implementation of schemes. The Budget earlier used to be presented at 5 pm. It was rescheduled to 11 am after 2001.

The Sensex is up 10.61 points at 26606.06, and the Nifty up 10.80 points at 8190.30. About 1778 shares have advanced, 787 shares declined, and 758 shares are unchanged.

BHEL, GAIL, Axis Bank, ITC and Coal India are top gainers while Infosys, Hero MotoCorp, Bharti Airtel, Tata Steel and M&M are losers in the Sensex.

Speaking to CNBC-TV18 Ashok Wadhwa, Group CEO of Ambit, said that demonetisation has reduced the consumption engine which was propelling the Indian economy.

''Very clearly, we were operating with an investment cycle which is not yet fully picking up.'' Since private sector investors aren't investing, the burden of capex will fall on the government and corporate earnings are going to be disappointing, he warned.

''The market is reflecting that dilution in corporate earnings,'' he said.

12:59 pm Market Update: Benchmark indices maintained uptrend in afternoon trade while the broader markets extended gains.

The 30-share BSE Sensex was up 70.56 points at 26666.01 and the 50-share NSE Nifty rose 29.30 points to 8208.80.

The BSE Midcap index gained 0.6 percent and Smallcap jumped over a percent on positive breadth. About 1760 shares advanced against 760 declining shares on the BSE.

12:40 pm Deutsche on OMCs: In Indian oil & gas sector, Deutsche Bank has reiterated its preference for oil marketing companies over upstream (ONGC, Oil India) companies. It expects OMCs to benefit from robust refining margins, capacity expansions, higher fuel marketing margin and consumption growth.

12:20 pm Union Budget: The Cabinet Committee on Parliamentary Affairs today recommended holding of the Budget Session from January 31 when the government is likely to table the Economy Survey followed by the Union Budget on February 1.

In a first, the government has decided to present the Budget on February 1 instead of the last day of the month as part of an overhaul that would also scrap the practice of a separate railway budget.

The first part of the Budget Session will run till February 9.

12:00 pm Market Check
Equity benchmarks remained higher in noon trade with the Nifty holding 8200 level, supported by FMCG, banks and index heavyweight Reliance Industries shares.

The 30-share BSE Sensex was up 74.43 points at 26669.88 and the 50-share NSE Nifty gained 27.70 points at 8207.20. The broader markets extended gains with the BSE Midcap and Smallcap indices rising 0.7-1 percent on positive breadth.

More than two shares advanced for every share falling on the exchange.

ITC, Reliance Industries, Axis Bank, ICICI Bank and L&T were top five contributors to Sensex's gains, up 0.5-2 percent while Infosys lost over a percent.

Railway stocks Titagarh Wagons, Texmaco Rail, Kalindee Rail, Kernex Microsystem and Stone India gained 3-5 percent.

Asian markets gained after a key indicator of China's private manufacturing showed robust gains in December. Mainland Chinese shares started the New Year on stronger footing, with the Shanghai composite up 1 percent. The Shanghai composite tumbled in 2016, to end the year down 12.3 percent, its worst year since 2011.

11:55 am Global funds: Investors funneled USD 375 billion into exchange-traded funds in 2016, investment manager BlackRock Inc said, a global record that came as investors looked to cut costs.

The total, which is preliminary, compares with USD 348 billion in 2015 and includes a record USD 286 billion haul in the United States, home to the funds' biggest market.

ETFs are a basket of stocks or other assets traded by individual investors and institutions. Fund managers from BlackRock to Vanguard and Schwab offer index ETFs that try to track, not beat, the market. They have sliced management fees on some funds to as little as USD 3 annually for every USD 10,000 managed. All three companies announced price cuts last year.

11:45 am Exclusive: The third and fourth quarter of the current fiscal will see some decline in the growth rate due to demonetiation, Arvind Panagariya, Vice-Chairman of Niti Aayog said. However, the move has also led to an increase in tax revenues.

Speaking to CNBC-TV18, Panagariya said demonetisation impact will be small and whatever is the loss, the government will recover it in the next fiscal.

Niti Aayog is pushing for kick-starting a strategic investment plan this year itself. Companies that do not have specific public purpose can be privatised.

Sick units for divestment are facing the issue of land ownership. Land owned by these units can be put in a land bank and could be used for various purposes, Panagariya said.

11:30 am Market outlook: Speaking to CNBC-TV18 Sridhar Sivaram, Investment Director at Enam Holdings, said that the CBDT circular regarding tax norms for FIIs is absurd. ''I don't think the government understands the CBDT's circular.'' While the FIIs were never against paying taxes, the clarity around procedures and the amount involved are a big concerns, he said.

Certain tax changes could hamper foreign portfolio investors (FPIs) as the Central Board of Direct Taxes (CBDT) has issued clarification on applicability of indirect transfer provisions. Under the indirect transfer provisions contained in Section 9 (1Xi) of the Income Tax Act, all income arising from any asset or source of income in India or through the transfer of a capital asset situated in India, shall be deemed to accrue or arise in India.

The market has recovered from early weakness supported by FMCG, oil & gas and bank stocks. The Nifty is up 22.30 points or 0.3 percent at 8201.80 while the Sensex is up 52.43 points or 0.2 percent at 26647.88.

BHEL, Axis Bank, ITC, ICICI Bank and SBI are top gainers while Infosys, Bahrti, Hero, Wipro and TCS are losers in the Sensex.

Gold prices were up by Rs 31 to reclaim Rs 27,601 per 10 grams in futures trading today as speculators enlarged positions amid a firming trend overseas.

Analysts said a firming trend in precious metals overseas mainly buoyed gold futures here. Globally, gold surged as much as 0.50 percent to USD 1,156.70 an ounce in Singapore today.

10:59 am Market Update: Benchmark indices gained more strength with the Sensex rising 35.33 points to 26630.78 and the Nifty up 16.95 points at 8196.45.

About 1594 shares advanced against 624 declining shares on the BSE.

10:40 am Citi on BEL: Citi believes Bharat Electronics (BEL) can deliver 15 percent EPS CAGR over FY16-19, given the expected order inflows and guidance announced by management.

The state-run aerospace and defence company received orders of Rs 4,130 crore during October-December quarter and Rs 5,130 crore in the first half of FY17. Recently media report indicated the company is likely to get three more orders totalling Rs 2,190 crore in Q3FY17 which takes the tally Rs 7,320 crore so far in FY17.

Key orders expected in the near term are Akash Missile System (7 squadrons), mobile cellular communication system, commander TI sights, Samyukta upgrade, long-range surface-to-air missile and L-band Tropo upgrade, Citi says.

10:20 am Market Expert: Speaking to CNBC-TV18 Sridhar Sivaram, Investment Director at Enam Holdings, said that the CBDT circular regarding tax norms for FIIs is absurd. ''I don't think the government understands the CBDT's circular.'' While the FIIs were never against paying taxes, the clarity around procedures and the amount involved are a big concerns, he said.

Certain tax changes could hamper foreign portfolio investors (FPIs) as the Central Board of Direct Taxes (CBDT) has issued clarification on applicability of indirect transfer provisions. Under the indirect transfer provisions contained in Section 9 (1Xi) of the Income Tax Act, all income arising from any asset or source of income in India or through the transfer of a capital asset situated in India, shall be deemed to accrue or arise in India.

 FIIs have been net sellers in India. In dollar terms India hasn't given much higher returns thatn other EMs. The ten year returns in MSCI are about 1 percent, Sivaram said.

10:00 am Market Check
Benchmark indices recouped early losses with the Nifty inching towards 8200 level after consolidation. Banks stocks rebounded while pharma stocks gained strength. Positive Asian cues also aided the market sentiment.

The 30-share BSE Sensex was down 5.97 points at 26589.48 and the 50-share NSE Nifty gained 3.05 points at 8182.55 while the broader markets continued to outperform benchmarks.

The BSE Midcap and Smallcap indices climbed over half a percent on positive breadth. About 1435 shares advanced against 575 declining shares on the exchange.

Banks stocks rebounded after yesterday's weakness due to lending rate cut. ICICI Bank, Axis Bank and SBI gained 1 percent each.

Index heavyweights Reliance Industries and ITC rose half a percent whereas Infosys, HDFC and L&T declined 0.6-1.7 percent.

9:55 am Lending rates:  Housing, auto and corporate loans are all set to become cheaper with half a dozen PSU and private banks today steeply reducing benchmark lending rate by up to 1.48 percent after spurt in deposits following demonetisation.

Taking a cue from State Bank of India, other lenders including largest private sector lender ICICI Bank and state-owned Oriental Bank of Commerce and Andhra Bank announced cut in marginal cost of funds based lending rate (MCLR).

SBI yesterday reduced the lending rate by a good 0.9 percent after Prime Minister Narendra Modi in his new year eve address urged the banks to focus on the needs of poor and lower middle class and middle class.

9:45 am Infosys woes: Cautioning Infosys employees that the road ahead is long and not easy, company chief executive officer (CEO) Vishal Sikka has stressed the importance of automation and warned against ''lackadaisical'' attitude towards greater value creation.

In his New Year message to the employees, he said by achieving all that they set out to do, Infosys can be a force powering the purposeful evolution of our world. ''We must remember that operational excellence is an imperative for each one of us. We must focus on delivering the best solutions in the smartest, fastest way possible, and not give up or give in to weaker instincts,'' Sikka has said in a letter to employees.

9:30 am Market outlook: Anish Damania of IDFC Securities says while he was positive on the market when the previous Budget shifted its focus to consumption and bolstering income, a populist Budget this year may not be taken positively if enough currency de-legalisation gains do not materialise.

He retains top picks, focussing on export-related segments, B2B category, regulated returns and oil marketing companies, while avoiding consumer-facing companies.

Tata Motors, Asian Paints, Tata Steel, ONGC and Cipla are top gainers while Dr Reddy's Labs, Hero MotoCorp are losers in the Sensex.

The Indian rupee gained in the early trade on Tuesday. It has opened higher by 9 paise at 68.13 per dollar versus previous close 68.22.

Bhaskar Panda of HDFC Bank said, "Most of the overseas markets were closed on Monday. This provided no respite to USD-INR pair. Demand pushed up the pair above the 68/dollar mark." The dollar index bounced back strongly, up around 0.60 percent, after falling for the past three straight sessions. The yen weakened.

Asian stocks began 2017 on a flat note, uninspired by a surge in European markets to their highest in more than a year, while the dollar resumed its climb after last week's stumble.

MSCI's broadest index of Asia-Pacific shares outside Japan was little changed in early trade as most regional markets reopened after the New Year holiday. It ended 2016 with a 3.7 percent gain, its best year in four.

Australian shares, however, were off to a robust start, jumping almost 1 percent, while South Korea added 0.2 percent. Japan was closed for an extended New Year holiday.