Sensex closes above 27,000 for 1st time since Oct 2015; SBI up 5%

3:30 pm Market closing: After the Reserve Bank of India maintained status quo in its policy review today, the market has ended with hefty gains. The Sensex ended above 27000 for first time since October 2015. The 30-share index ended up 232.22 points or 0.9 percent at 27009.67, and the Nifty  was up 65.40 points or 0.8 percent at 8266.45. About 1480 shares have advanced, 1128 shares declined, and 160 shares are unchanged.

ICICI Bank, SBI closed up 4-5 percent while Sun Pharma, ITC and Tata Steel were other gainers. Infosys, HDFC, Axis Bank, Reliance and GAIL were losers in the Sensex.

3:10 pm Pulse state: The government has procured 1.11 lakh tonnes of pulses so far from farmers for creating buffer stock and also contracted to import 38,500 tonnes as part of its effort to control the retail prices.

The Centre also asked state governments to seek allocation of pulses from the buffer stock and sell at reasonable prices not exceeding Rs 120 per kg.

An inter-ministerial committee meeting, chaired by Consumer Affairs Secretary Hem Pande, was held today to review prices of essential commodities.

2:55 pm Market Update: Equity benchmarks lost some shine in late trade. The Sensex rose 182.74 points to 26960.19 and the Nifty gained 52.05 points at 8253.10. Infosys extended losses.

2:50 pm Europe gains: European stocks rallied as investors digested the latest comments from US Federal Reserve Chair Janet Yellen that appear to have killed off any chance for an interest rate hike this month.

The pan-European STOXX 600 was 1.23 percent higher.

2:45 pm Solar capacity: India is expected to see an additional solar power generation capacity of 5 GW this year, much higher than witnessed in 2015, according to a report.

"The Indian solar market is growing in size but the question is: is it too much too fast, as infrastructure and systems have not kept pace with auction announcements.

"For the sector to move from 2 GW to a 10 GW a year market, work still needs to be done," Mercom Capital Group CEO and Co-Founder Raj Prabhu said in a statement.

Cumulative solar installations in India crossed the 7.5 GW-mark as of May 2016, with about 2.2 GW installed so far this year, more than all of the solar installations in 2015, the clean energy consultant Mercom Capital said.

2:30 pm Rajan on payments bank licence: RBI Governor Raghuram Rajan said he is not "overly perturbed" by surrender of Payments Bank licences by some companies but indicated that there could be a mechanism to ensure that entities apply for licences after due diligence as there is a cost involved in vetting them.

Three entities -- Tech Mahindra, Cholamandalam Investment and Finance Company and a consortium of Dilip Shanghvi, IDFC Bank and Telenor Financial Services -- have decided to back out of the Payments Bank licencing.

"We are not overly perturbed that some people decided after analysis that they would not go forward. In fact it suggests that licencing has been adequately liberal and that we have a variety of players coming in," he said at a press conference after announcing the second bi-monthly monetary policy for the current fiscal.

Last August, RBI gave in-principle approval to 11 applicants including Department of Posts, Aditya Birla Nuvo, Airtel M Commerce Services, Fino PayTech, National Securities Depository, Reliance Industries, Tech Mahindra and Vodafone m-pesa for setting up payments banks.

2:15 pm Monsoon gaining strength: Monsoon is strengthening over the Arabian Sea and there have been favourable developments in the last 48 hours for bountiful rains in India. India Meteorological Department Director BP Yadav pointed out that Kerala has been getting a good amount of rainfall continuously.

"The cloud organisation is not yet fully developed and therefore monsoon likely to set over Kerala by June 9," said Yadav. The normal date of monsoon onset over Kerala is June 1.

Speaking about the unprecedented heat wave in several regions of the country, the IMD chief said severe weather conditions will continue in western and eastern parts of Rajasthan, western Haryana, some parts of Gujarat and western Madhya Pradesh.

2:00 pm Market Check
The market surged further in afternoon trade with the Sensex rising 300 points or 1.12 percent to 27076.90, driven by banks, FMCG, infra and auto stocks. The Nifty is inching towards 8300, up 92.10 points or 1.12 percent at 8293.15.

The market breadth remained positive as about 1483 shares advanced against 985 declining shares on Bombay Stock Exchange. The BSE Midcap index gained 0.6 percent and Smallcap was up 1.1 percent.

Nifty Bank touched 18000 level for the first time since October 26, 2015 after the Reserve Bank of India maintained accommodative policy stance, though pointing inflation concerns. State Bank of India and ICICI Bank surged 4 percent each.

1:45 pm Diesel: India's state refiners may halt diesel imports after working out a temporary mechanism to resume buying the fuel from private processors if global diesel prices remain at current levels, two refinery sources said. State refiners stepped up imports in recent months after private refiners refused to continue absorbing sales tax and coastal freight costs, making the domestic fuel more expensive.

Indian imports were a factor behind the stronger Asian gasoil crack, which has been holding near USD 12 a barrel for the fifth straight session on Monday, after almost doubling to USD 11.74 on June 2 from this year's low on April 6.

1:30 pm Monsoon: Monsoon is strengthening over the Arabian Sea and there have been favourable developments in the last 48 hours for bountiful rains in India. India Meteorological Department Director BP Yadav on Tuesday pointed out that Kerala has been getting a good amount of rainfall continuously.

"The cloud organisation is not yet fully developed and therefore monsoon likely to set over Kerala by June 9," said Yadav. The normal date of monsoon onset over Kerala is June 1.

Speaking about the unprecedented heat wave in several regions of the country, the IMD chief said severe weather conditions will continue in western and eastern parts of Rajasthan, western Haryana, some parts of Gujarat and western Madhya Pradesh.

The market is on fire as banks lend strong support. The Sensex is up 261.92 points or 0.9 percent at 27039.37, and the Nifty up 81.85 points or 1 percent at 8282.90. About 1434 shares have advanced, 943 shares declined, and 138 shares are unchanged.

ICICI Bank, SBI, HUL, Sun Pharma and ITC are top gainers.

The Finance Ministry said the RBI monetary policy is broadly in line with government's expectations on growth and inflation. In its second bi-monthly policy review for the current fiscal, RBI maintained status quo on interest rate, while pegging economic growth at 7.6 percent and retail inflation target at 5 percent for January 2017.

Domestic conditions for growth are improving gradually, mainly driven by consumption demand, which is expected to strengthen with a normal monsoon and the implementation of the 7th Pay Commission award, Reserve Bank of India said.

Oil prices edged down slightly today but held around 11-month highs thanks to a weaker dollar and forecasts for another drop in US inventories. The commodity has rebounded about 90 percent from near 13-year lows touched at the start of the year as worries over a global supply glut ease and output from key producers Nigeria and Canada is dented.

12:45 pm Market Update: Equity benchmarks extended rally in afternoon trade with the Sensex rising 231.36 points to 27008.81 and the Nifty climbing 71.30 points to 8272.35.

12:40 pm Europe opens: European stocks opened higher following a cautious lead from Asia and as investors digested the latest comments from US Federal Reserve Chair Janet Yellen.

The pan-European STOXX 600 was up 0.5 percent higher.

Asian markets traded mixed, with the Japanese benchmark index edging higher and Chinese mainland shares slipping.

12:35 pm RBI on inflation: RBI retained January 2017 retail inflation target at 5 percent, though with an upward bias, amid a sharper-than-anticipated upsurge in inflationary pressures due to food items and firming oil prices.

Consumer Price Index (CPI) based retail inflation excluding food and fuel edged up in April. Services inflation also remained elevated on account of house rents, water charges, tuition fees and taxi/auto fares.

However, since growth in rural wages and corporate staff costs have been modest, cost-push factors may be subdued for the time being, RBI Governor Raghuram Rajan said in the second bi-monthly Monetary Policy Statement, 2016-17.

"The inflation surprise in the April reading makes the future trajectory of inflation somewhat more uncertain," the statement said as RBI retained the inflation projections given in the April policy statement "though with an upside bias".

In April, RBI had projected retail inflation to be around 5 percent.

12:25 pm Ramky bags order: Ramky Infrastructure said it has bagged orders worth Rs 612.88 crore for road projects in Chhattisgarh and Punjab.

The company got Rs 263.34 crore order for rehabilitation and upgradation of NH-200 (New NH-49) from 178.94 km to 241.52 km in Chhattisgarh.

Second order, which is of Rs 298.80 crore, is also in Chhattisgarh, for rehabilitation and upgradation of NH-200 (New NH-49) from 241.55 km to 312.60 km.

Ramky also won Rs 50.74 crore order for development and beautification of road/crossing from hall gate to Golden Temple and back to Pink Plaza, Amritsar.

12:15 pm Expert on policy review: Rohit Gadia, Founder & CEO of CapitalVia Global Research says the monetary easing cycle is most probably at near the end.

"Before further cut RBI probably want to see the outcome of upcoming Fed meet and the Brexit referendum. Going forward the factor like how monsoon progresses and the effect on CPI inflation of 7th pay commission implementation will be key before we can expect a 25 bps rate cut in August," he adds.

12:00 pm Market Check
The market extended positive momentum in late morning trade, especially after the Governor Raghuram Rajan said the RBI is closely working with government & SEBI for banks' balancesheet clean-up. SBI and ICICI Bank rallied 2-3 percent.

The 30-share BSE Sensex rose 130.52 points to 26907.97 and the 50-share NSE Nifty climbed 43.15 points to 8244.20. The market breadth remained positive as about 1338 shares advanced against 921 declining shares on Bombay Stock Exchange.

The Reserve Bank of India has kept repo rate (6.5 percent) and cash reserve ratio (4 percent) unchanged in its monetary policy review.

ITC, HUL, TCS and Sun Pharma also supported the market while HDFC, Reliance Industries, Axis Bank and Infosys limited upside.

11:45 am Market climbs: The market is climbing up as RBI Governor Raghuram Rajan says that focus of the central banks remains on banks balance sheet clean up. The Nifty tested 8250 briefly. The 50-share index is up 45.35 points or 0.5 percent at 8246.40 and the Sensex is up 145.14 points or 0.5 percent at 26922.59. About 1316 shares have advanced, 901 shares declined, and 120 shares are unchanged

Banks are up with ICICI Bank and SBI lending support. HUL, Sun Pharma and M&M are top gainers.

11:30 am Analysis: The RBI has maintained status quo and has left the repo rate unchanged at 6.50 percent. Analysts now expect a rate cut in the next bi-monthly policy review in August.

Jayesh  Shah, Managing Director and Country Treasurer, Bank of America, told CNBC-TV18 that there are chances that liquidity may move improve soon.

Echoing his views, Arun Tiwari, Chairman & Managing Director, Union Bank of India said that the RBI Governor Raghuram Rajan has been consistent in his approach. He said that if the liquidity improves, consumers will benefit and the bank expects it to improve in July or August.

The market is unmoved as the Reserve Bank of India has kept key rates unchanged. As expected the central bank has kept cash reserve ratio (CRR) unchanged at 4 percent and keeps repo rate unchanged at 6.50 percent stating that it stays on hold but stance remains accommodative. FY17 GDP is growth target kept unchanged at 7.6 percent. RBI says January 2017 CPI inflation target unchanged at 5 percent with upside.

The Sensex is up 66.39 points or 0.2 percent at 26843.84, and the Nifty is up 29.95 points or 0.4 percent at 8231. About 1246 shares have advanced, 826 shares declined, and 110 shares are unchanged.

SBI, ICICI Bank, HUL, Hero MotoCorp and ONGC are top gainers while Axis Bank, Adani Ports, HDFC, Lupin and Dr Reddy's Labs are losers in the Sensex.

Gold prices rose 0.19 percent to Rs 29,442 per 10 gram in futures trade as participants created fresh positions, tracking a firm trend overseas. Analysts said fresh positions built up by traders in line with a firm global trend on hopes that the US Federal Reserve will delay rate hike, rising demand for the precious metals, influenced gold prices at futures trade here.

10:40 am Interview: Dismissing talks of a possible takeover of Dhanlaxmi Bank, Managing Director and Chief Executive G Sreeram, said that the bank is looking for capital infusion of about Rs 100-150 crore. In an exclusive interview to CNBC-TV18, Sreeram said that the bank is in talks with players in the market to raise capital.

He said that the capital will be raised through fresh issues and expects the fundraising to be completed within a month. He added the bank is in advanced talks with investors to raise the amount. Even existing investors intend to increase their stake in the bank, he said.

Commenting on the performance of the bank in the March 2016 quarter, Sreeram said one-time provisions impacted its capital to the tune of Rs 90 crore and he expects the bank to post good numbers in the quarters to come by in FY17.

10:20 am FII View: Brexit might trigger volatility in the currency markets rather than the equity markets, said Andrew Holland, CEO of Ambit Investment Advisors. Brexit will have tax implications for the UK, Europe and other countries may start thinking about exiting. It may largely have tax implications among members of European Union and may influence them to think about exiting, he added.

While negative global factors are ebbing away, a good monsoon is the only key move for the markets to move higher and consolidate, he told CNBC-TV18. However, if monsoons fail, he is of the view that the government will have to interfere with fiscal deficit and increase expenditure, which the investors will not like.

Meanwhile, earnings momentum will continue to remain the catalyst for Indian equity markets.

10:00 am Market Check
Equity benchmarks as well as broader markets maintained early gains as investors are eagerly waiting for the RBI monetary policy review. Majority of economists expect Governor Raghuram Rajan to keep rates unchanged but the commentary will be closely watched.

"RBI policy actions would continue to be guided primarily by domestic inflation. Further rate cuts by the RBI can be expected only after a clearer picture of the monsoons and oil price level emerges. The RBI is also waiting for the passage of key global events viz. the US Federal Reserve's interest rate action and the Brexit referendum (Britain's exit from the European Union) and the resultant volatility in domestic markets to make its policy moves," CARE said in its note.

The Sensex rose 84.31 points to 26861.76 and the Nifty climbed 26.05 points to 8227.10. The market breadth was positive as about two shares advanced for every share declining on Bombay Stock Exchange.

ICICI Bank, SBI, HUL, Maruti Suzuki, ONGC and Hero Motocorp topped buying list on Sensex, up 1-2 percent while HDFC, Lupin, Infosys, Adani Ports and Dr Reddy's Labs fell.

9:55 am M&A: Keen on inorganic expansion, Sun Pharma has said it is looking for targets that are "well managed" unlike the acquisition of Ranbaxy which continues to take significant time of the senior management.

"We continue to remain opportunistic for acquisitions. As on today, since Ranbaxy continues to take significant time for senior management, we are not looking at buying businesses where we will have to spend a lot of time in managing," Sun Pharma Managing Director Dilip Shanghvi told analysts in a conference call.

So the company continues to look for opportunities which are well managed and which can either operate as a standalone business or businesses which will not require significant amount of management involvement, he added.

9:45 am Fund raising: State-owned NTPC said it is planning to raise around Rs 20,000 crore in this fiscal.

"The company is planning to raise Rs 20,000 crore in the current fiscal," Kulamani Biswal, Director (Finance), NTPC told reporters here.

Of the Rs 20,000 crore, Rs 6,000 crore would be raised from the overseas bond market and the remaining Rs 14,000 crore from domestic market.

"From domestic market we can go for bank loans also," Biswal said.

9:30 am When will Fed hike rates? Brokerage house Nomura says Fed chairperson Janet Yellen's speech has reduced the likelihood that the FOMC will raise interest rates over the summer.

It now expects the next rate hike to most likely come through in September.

''Following last week's surprisingly downbeat employment report, Yellen stressed uncertainty regarding the economic outlook. We believe that the FOMC needs to be confident that the economy is growing faster than its potential before it takes the next step in raising short-term interest rates,'' says the Nomura report.

The market has opened in green, keenly keeping an watch on Reserve Bank of India as the central bank is set to present its bi-monthly monetary policy review. The Sensex is up 81.49 points or 0.3 percent at 26858.94, and the Nifty is up 28.05 points or 0.3 percent at 8229.10. About 487 shares have advanced, 172 shares declined, and 25 shares are unchanged.

SBI, ICICI Bank, BHEL, Tata Steel and Wipro are top gainers while Sun Pharma, Lupin, Dr Reddy's, Infosys and Adani Ports are losers in the Sensex.

The Indian rupee opened higher by 6 paise at 66.90 per dollar on Tuesday against previous close of 66.96.

Ashutosh Raina of HDFC Bank said, "The USD weakened markedly after the dismal non-farm payrolls report for May, thereby reducing the chances of near-term rate hikes in US substantially. The RBI is widely expected to maintain status quo in rates in its policy statement today, although some more liquidity easing measures can be expected."

"The USD-INR pair has appreciated past 67/dollar, in tandem with global dollar weakness. We expect the trading range of 66.50-67.50/dollar in near term taking cues from series of global events lined up this month," he said.

The pound rose marginally after sliding yesterday when two polls showed support among Britons for a vote to leave the european union was gaining momentum. A referendum on the issue is scheduled for June 23. The dollar index hoverd around the 94 mark.

In morning trade, Asia stocks traded mixed with the Japanese benchmark index giving up initial gains as the yen nudged higher against the dollar.

US stocks closed higher, with energy leading, after comments from Fed chair Janet Yellen remained positive on the economy while omitting a specific reference to the timing of a rate hike. The S&P 500 closed at its highest since November 3 and 1.1 percent below its 52-week intraday high set last July. June rate hike seems to be off the table as Fed Chair Janet says that the fed funds rate probably needs to rise gradually over time.

Crude oil Nymex holds above the 49 mark after jumping over 2 percent yesterday. Gold prices trade around 1240 USD an ounce.