Nifty ends below 8650, Sensex up 174 points; BHEL up 5%

3:30 pm Market closing: The market has ended higher but it gave up early gains. The Sensex closed up 174.32 points or 0.6 percent at 27882.46, and the Nifty was up 38.50 points or 0.4 percent at 8641.25. About 1401 shares have advanced, 1387 shares declined, and 288 shares are unchanged.

BHEL, Bharti, ICICI Bank, NTPC and SBI were top gainers while ITC, Wipro, Lupin, Tata Motors and HUL were losers in the Sensex.

2:55 pm Budget expectations: The key focus this Budget will be on fiscal consolidation and the government is likely to stick to this path, say sources. The Budget will be presented by Finance Minister Arun Jaitley on February 1.

As per sources, government believes that deviating from the fiscal consolidation path will send a negative signal and it is an option only to meet any extraordinary situation.

Two themes that will not be skipped this Budget will be demonetisation and goods and services tax (GST) and the government says that it is better placed with resources post the note ban. It also expects the indirect tax system to boost revenue.

2:45 pm Market check: The market has become weak with index heavyweight ITC dragging 3 percent. The Sensex is up 166.49 points or 0.6 percent at 27874.63, and the Nifty up 37.90 points or 0.4 percent at 8640.65. About 1365 shares have advanced, 1317 shares declined, and 294 shares are unchanged.

BHEL, ICICI Bank, Bharti, NTPC and SBI are top gainers while ITC, Lupin, Wipro, HUL and Asian Paints are losers in the Sensex.

2:30 pm Market outlook: Harsha Upadhaya, Chief Investment Officer at Kotal Mutual Fund, said on Friday that he was surprised by the quick pace of recovery in terms of stock performance after the government decided to do away with popular bank notes in November. Speaking to CNBC-TV18, Upadhyaya said the impact of the note ban had only been short-term and that a fair amount of buying had been happening after an early blip. He said that there had been healthy and consistent inflows of domestic mutual funds into equity funds, largely thanks to systematic investment plan (SIP) numbers.

The market is still climbing higher with the Sensex up 234.35 points or 0.8 percent at 27942.49. The Nifty is up 56.05 points or 0.6 percent at 8658.80. About 1458 shares have advanced, 1174 shares declined, and 285 shares are unchanged.

BHEL, ICICI Bank, NTPC, SBI and Axis Bank are top gainers while Lupin, ITC,  Wipro, HUL and Cipla are losers in the Sensex.

ITC's December quarter has beaten estimates with net profit rising 5.7 percent to Rs 2650 crore from Rs 2504 crore in corresponding quarter last fiscal. During the quarter, its total income also grew marginally by 5 percent to Rs 13570 crore compared to Rs 12962 crore on annual basis.

Cigarette sales were up 2.2 percent at Rs 8288 crore against Rs 8106 crore year-on-year.

1:50 pm US vs Asia: Significant uncertainty surrounds the possible US shift to a new border adjustment tax, but India and Indonesia are better positioned as compared to other Asian economies, says a report.

Under the current proposals for the US border adjustment tax, exports will be exempted from the calculation of US corporate taxable incomes, while imports will be taxed.

"In a scenario of no or limited USD adjustment, US import prices could rise as much as 25 percent, resulting in Asia exports declining 3-4 percent in aggregate, and shaving around 0.5 percent from the region's GDP," Credit Suisse said in a research note.

1:40 pm FM ahead of Budget: Finance Minister Arun Jaitley today put up a spirited defence of demonetisation, saying the drive "shook" the financial system for a short while, but will integrate the shadow economy with the formal in the long run and ensure better tax compliance. He said most contentious issues regarding the Goods and Services Tax (GST) have been sorted out between the Centre and states and the new indirect tax regime is at the final stages of implementation.

"This (demonetisation), coupled with GST, in the days to come will ensure much larger revenues as far as states and the central government are concerned and expand the size as far as the formal economy is concerned," Jaitley said at the CII Partnership Summit.

1:30 pm Result: ITC's December quarter has beaten estimates with net profit rising 5.7 percent to Rs 2650 crore from Rs 2504 crore in corresponding quarter last fiscal. During the quarter, its total income also grew marginally by 5 percent to Rs 13570 crore compared to Rs 12962 crore on annual basis. Cigarette sales were up 2.2 percent at Rs 8288 crore against Rs 8106 crore year-on-year. According to CNBC-TV18 poll, ITC was expected to report net profit at Rs 2564.2 crore while its total income was seen at Rs 9130.4 crore in year-ago period.

Bulls are in control of the market as the Sensex and the Nifty are holding on to their morning gains. The Nifty has been hovering around its 8650-mark, while the Sensex is now treading close to 27,900.

BHEL, ICICI Bank and State Bank of India lead the list of top gainers. Among top losers are Wipro, ITC and Lupin. All three stocks have lost over a percent.

The government is likely to announce a 'universal health scheme' in the Union Budget on February 1. This scheme, said sources, will cover individuals across income groups. Currently, the government-sponsored Rashtriya Swasthya Bima Yojana (RSBY) scheme covers those below the poverty line and offers coverage of up to Rs 30,000.

''This scheme will provide coverage not only to those families living below the poverty line, but also to the general masses. Since the country already has schemes for term insurance and personal accident accessible across income groups, this could be the next addition to it,'' an official close to the development said.

12:50 pm Boosting electric vehicles: With an aim to give electric vehicles a boost the government is believed to be discussing the idea of allowing third-party companies to set up charging infrastructure.

Insufficient subsidies from the government and lack of battery charging stations have been the two main reasons why electric vehicles have not gathered much traction so far in India.

While the government has become serious about promoting clean technology vehicles such as hybrids and electric variants under the National Electric Mobility Mission Plan which provides subsidies for two and four-wheelers, there has been no word yet on plans to set up a charging infrastructure parallely.

12:40 pm: Results: India Cements posts a profit of Rs 35.3 crore, while its revenues stand at Rs 1,271 crore in December quarter.

A CNBC-TV18 poll of analysts had predicted a 591 percent increase in the cement firm's net profit at Rs 38 crore. Margins have come mildly below estimates.

12:30 pm: UP CM seeks postponement of Union Budget: Uttar Pradesh Chief Minister Akhilesh Yadav has shot off a letter to Prime Minister Narendra Modi requesting him to defer presentation of the Union Budget till the completion of poll process in five states.

The letter sent to the Prime Minister earlier this week cited the Election Commission directive on January 23 asking the Central government not to announce any specific scheme for the five states going to polls in keeping with the model code of conduct.

The Supreme Court had on January 23 rejected a petition that had sought to postpone the Union Budget on the back of elections in five states.

The market is still holding gains with the Nifty eyeing 8700. The Nifty is up 67.40 points or 0.9 percent at 8670.15 and the Sensex is up 251.96 points or 0.9 percent at 27960.10. About 1523 shares have advanced, 932 shares declined, and 262 shares are unchanged.

BHEL, ICICI Bank, Axis Bank, GAIL and HDFC were top gainers while  Wipro, Lupin, HUL, Tata Motors and Cipla are losers in the Sensex.

UBS, the world's biggest wealth manager, on Friday struck a more optimistic tone for 2017 on the back of rising US interest rates as it posted a 47 percent fall in full-year net profit. With its flagship wealth management division struggling amid record-low interest rates and a preference among billionaire and millionaire clients for holding cash, 2016 net profit fell to 3.3 billion Swiss francs (USD 3.3 billion) from 6.2 billion in 2015.

"Although macroeconomic uncertainty, geopolitical tensions and divisive politics continue to affect client sentiment and transaction volumes, we have begun to observe improved investor confidence, primarily in the US, which may benefit our wealth management businesses," Switzerland's biggest bank said in a statement.

11:50 am Budget expectations: Battling slump in demand after shock demonetisation, Finance Minister Arun Jaitley may look to spur consumption through lower taxes in next week's Budget, but he faces a peculiar situation as precise projections of indirect tax collection in 2017-18 are unavailable due to GST.

Finance Ministers usually weave around their welfare spending proposals based on projections of direct and indirect tax collections in the fiscal.

Projections of collection in direct taxes, made up of personal and corporate tax, would be available but with the rollout of Goods and Services Tax (GST) deferred till July 1, no reliable projection of indirect tax collection for 2017-18 fiscal is likely to be available, tax experts said.

11:30 am Interview: Sharing his expectations from the upcoming Budget 2017, M K Surana, Chairman and Managing Director, HPCL said the company would like customs duty exemptions for greenfield and brownfield expansions. Such exemptions would aid funds infusion into infrastructure projects and also allow for potentially reasonable returns, he added.

Surana said that he expects the government to continue with zero duty on crude imports.

However, he does not expect the government to tinker with cess for upstream companies and expects lesser subsidy provision in the Budget because he expects the overall subsidy burden on the government to be less.

The market is still seeing good buying interest with the Nifty up 60.05 points or 0.7 percent at 8662.80. The Sensex is up 232.32 points or 0.8 percent at 27940.46.

BHEL, ICICI Bank, Axis Bank, HDFC and GAIL are top gainers while Lupin, Wipro, Cipla, HUL and Hero MotoCorp are losers in the Sensex.

Gold futures today fell 0.85 percent to Rs 28,176 per 10 grams as participants cut their bets amid a weak global trend. Besides, profit-booking by speculators also weighed on gold prices.
 
Analysts attributed the fall in prices to weak trend overseas as a rally that pushed the Dow Jones Industrial Average above 20,000 for the first time, along with the stronger US currency and Treasury yields close to the highestthis year, reduced demand for the metal as an alternative asset.

Besides, profit-booking by speculators at prevailing levels too weighed on prices, they added.

10:55 am FMCG on Budget: After taking a demonetisation hit, FMCG companies are pinning hopes on a growth oriented Budget to see a revival in consumer confidence and create demand both in urban and rural markets.

"We are expecting a growth-oriented Budget with various stimuli to revive consumer confidence... proactive reforms to stimulate demand by increasing the money in the hands of the emerging middle class and rural India, this will help bring FMCG growth back on track," Godrej Consumers Managing Director Vivek Gambhir told PTI.

Kolkata-based Emami too is expecting a growth oriented budget "to boost consumption, increase public investment, promote digitisation, broaden tax base and lead higher growth" and improvement of business sentiments.

10:45 am Market outlook: Harsha Upadhaya, Chief Investment Officer at Kotal Mutual Fund, said on Friday that he was surprised by the quick pace of recovery in terms of stock performance after the government decided to do away with popular bank notes in November.

Speaking to CNBC-TV18, Upadhyaya said the impact of the note ban had only been short-term and that a fair amount of buying had been happening after an early blip.

He said that there had been healthy and consistent inflows of domestic mutual funds into equity funds, largely thanks to systematic investment plan (SIP) numbers.

Upadhyaya said with the large sums of money that have entered the system after demonetisation, the situation will only get better.

10:30 am FII view: Equity markets, especially in the United States, have been on a tear ever since Donald Trump was elected President, with the Dow Jones index recently taking out the 20,000 level for the first time ever.

But despite Trump's perceived pro-business image and self-dubbed ''America-first'' policies, economists are concerned whether his protectionist stance may be bad for global growth.

Overnight, tensions between the US and Mexico arose after the Trump indicated he was firm in following through with his election promise to build a border wall between the two countries. That was worried many, including former Goldman Sachs Chairman Jim O'Neill, who says he is surprised that Trump is following up on what many believed was mere campaign rhetoric.

The market continues to maintain uptrend after the Nifty hit 8650. The 50-share index is up 46.60 points or 0.5 percent at 8649.35 while the Sensex is up 169.72 points or 0.6 percent at 27877.86.

BHEL, Axis Bank, GAIL, NTPC and ICICI Bank are top gainers while Lupin, Wipro, Tata Steel, Bajaj Auto and Cipla are losers in the Sensex.

The Union budget is going to be a "market-neutral" event as policymakers are not likely to change their policy stance and will continue to focus on fiscal consolidation, says a Morgan Stanley report.

"We do not expect major changes in the conduct of fiscal policy and hence, view the budget as a market-neutral event," Morgan Stanley said in a research note.

The Union budget for 2017-18 is due to be presented on February 1.

9:50 am Result poll: Demonetisation is likely to hit cigarette volume growth of ITC in December quarter. According to CNBC-TV18 poll, ITC is likely to report net profit at Rs 2564.2 crore in October-December down 3.3 percent from Rs 2652.8 crore in corresponding quarter last fiscal. During the quarter, its total income may marginally fall 0.5 percent at Rs 9130.4 crore compared to Rs 9176.7 crore in year-ago period. In Q3, EBITDA is seen falling 2.3 percent at Rs 3521 crore versus Rs 3605.2 crore while margins may stand at 38.6 percent versus 39.3 percent (year-on-year). Analysts polled by CNBC-TV18 expect 2-3 percent decline in cigarette volumes. They say demonetisation impact may be limited on cigarette Volumes due to inelastic demand. The company raised prices on 30 percent of cigarette portfolio by 14-15 percent in second half of December.

9:40 am Market climbs: The market is surging ahead in what looks like a pre-Budget rally. The Sensex is up 189.04 points or 0.7 percent at 27897.18 and the Nifty is up 51.70 points or 0.6 percent at 8654.45. About 1225 shares have advanced, 492 shares declined, and 162 shares are unchanged.

BHEL, Axis Bank, ICICI Bank, ONGC and GAIL are top gainers while Wipro, Tata Steel, Lupin, Infosys and ITC are losers in the Sensex.

9:30 am FII view: Ridham Desai of Morgan Stanley thinks a mix of macro stability and the relative price of money and growth drives India's performance relative to emerging markets. 

"Given the current mix of relative earnings growth, relative interest rates and valuations, we think India will likely outperform emerging markets. India is our top pick in an EM context," he adds.

Christopher Wood of CLSA believes that while Donald Trump criticised quantitative easing and the Fed during his presidential campaign, he is very unlikely to prove a 'hard money' president in practice. "Rather the opposite is likely, which is why his appointments to the Fed will be particularly interesting. If such a monetary tightening scare does happen, it is more likely to lead to a flattening of the yield curve," he says.

The market has opened February Futures and Options (F&O) series on a strong note with the Nifty above 8600. The Nifty is up 22.05 points or 0.3 percent at 8624.80 while the Sensex is up 122.76 points or 0.4 percent at 27830.90.

GAIL, BHEL, ICICI Bank, TCS and Sun Pharma are top gainers while Wipro, Dr Reddy's Labs, Lupin and Tata Steel are losers in the Sensex.

The Indian rupee opened lower by 10 paise at 68.18 per dollar on Friday versus Wednesday's closing of 68.08.

Bhaskar Panda of HDFC Bank said, ''The dollar index has recovered from 7-week lows. We expect the USD-INR to trade in a range of 68.05-68.25/dollar today.''

The dollar gained versus the Mexican peso after Mexico's president, Enrique Pena Nieto, said he would not attend a previously scheduled meeting with Donald Trump. Also the dollar index rebounded from 7-week lows.

Asian markets were trading positive in early morning trade. Nikkei was up over 0.30 percent as investors digested better-than-expected inflation data. December core consumer prices fell 0.2 percent year-on-year, at its slowest since February.

In the US, equities closed mixed after hitting new record highs, as investors digested several key earnings reports. The Dow Jones rose about 30 points, with Goldman Sachs contributing the most gains, hitting a new record high and holding on to its 20,000-level. About 30 percent of S&P 500 companies have reported quarterly earnings, with 70 percent exceeding analyst expectations on the bottom line and 56 percent beating sales estimates.

Tensions between the US and Mexico escalated after Trump's views that the latter should pay for the wall at the border or skip the scheduled meeting. The construction is set to cost USD 14 billion. The Republican Party leadership has said that Congress will clear the funds for the wall.

Crude prices declined marginally after 2 percent surge overnight as plentiful supplies and bulging inventories put a cap on gains.