Sensex loses 275 points, Nifty ends weak; banks, oil, IT drag

03:55 pm Analysts views on RIL's growth plans
Ambareesh Baliga of Edelweiss Financial Services says raising funds during a bull market won't be a problem.

Concurring with Baliga's view, Dipen Sheth, head of institutional research at HDFC Securities says this reflects the incremental confidence that the top management of India's largest private sector company has on business prospects of the country over the next 2-5-10 years. Sheth was expecting around USD 20-22 billion capex over three years, against the USD 30 billion announced.

However, Sheth cautions that the challenges to earnings or fair return on this incremental capital employed will persist because much of this capital will be deployed in the group's non-core businesses – telecom and retail. Both telecom and retail will see substantially higher capital allocation.

Sheth is confident of Reliance's investment in shale gas or upstream oil and gas outside India. He feels the company has a much bigger advantage in retail than in telecom.

03:45 pm Fund raising
Indian companies mopped up Rs 2.71 lakh crore through private issue of debt securities in 2013-14, a drop from the preceding year. "On a year-on-year basis, last fiscal year's raising of Rs 2.71 lakh crore was a decrease of 23 per cent from Rs 3.52 lakh crore mobilised in 2012-13," according to a report by Prime Database.

Market analysts say fund raising through private debt placement -- where firms issue debt securities or bonds to institutional investors to raise capital -- has been subdued lately due to the good performance of equities. The biggest mobilisation was by financial institutions and banks at Rs 1.45 lakh crore in 2013-14, a plunge of 21 percent from the preceding year.

Mobilisation by private sector firms fell 21 percent to Rs 89,603 crore, while funds raised by public sector companies declined to Rs 31,248 crore from Rs 39,551 crore. Mobilisation by state-run financial institutions went down to Rs 1,482 crore from Rs 5,394 crore previously, while funds raised by state-level undertakings nosedived 57 percent to Rs 3,686 crore.

03:35 pm Market closing
It has been a tough day to keep the bears away from Dalal Street as situation in Iraq is growing tense. After recovering a bit in the last few hours, the market did a somesault and ended at lower levels. The Sensex was down 274.94 points or 1.08 percent at 25246.25 and the Nifty ended at 7558.20, down 73.50 points or 1 percent.

About 1400 shares advanced, 1628 shares declined and 98 shares were unchanged.

Most sectoral indices were in red except Healthcare. BHEL, TCS, Reliance, NTPC and Tata Steel were major losers in the Sensex. Gainers included Cipla, Hindalco, GAIL, Dr Reddy's and Maruti.

03:20 pm Why the market fell
Anand Tandon, Market Analyst, feels the sell-off has been anticipated after an extremely good rally both in the frontline and the second rung companies. The sharp correction points to the fact that market was slightly overbought and people were looking for an excuse to sell off . "There is extreme complacency, there is no great volatility either in terms of Indian market or global markets. So, anything negative would tend to spook. We may be using this as an excuse but the market did need to take a break." Tandon said.

Speaking about the correction, Dipan Mehta said such intraday corrections are a bit difficult to explain. He believes some basket FII based selling must have triggered this fall.

03:10 pm Buzzing
Rail stocks are once again hogging limelight as buzz of railway fare and freight rate gathers steam. Titagarh Wagons , Kalindee Rail Nirman , Kernex Microsystems and Texmaco Rail and Engineering rallied 5-10 percent intraday. Ahead of the Budget, the Railway Board has recommended a hike in rail fares and Railway Minister Sadananda Gowda will meet Prime Minister Narendra Modi before taking a final decision.

"I will discuss the fare issue with the Prime Minister. A decision will be taken after discussion with the PM," Railway Minister DV Sadanand Gowda said after meeting Finance Minister Arun Jaitley. Government sources say that the PM is reluctant to increase passenger fares of sleeper class, but may agree to hike AC 1st class and 2nd AC fares.

03:00pm Punj Lloyd on buyers' radar
Punj Lloyd's MD & CEO JP Chalsani says order book and revenue visibility look strong for the current financial year 2014-15. "We hope to book orders worth over USD 2 billion by August," he adds.

According to him, the company's debt reduction plans are on track. "We hope to reduce debt by 40 percent through non-core asset sales and claims settlement. Non-core asset sale likely is to be concluded in Q2FY15 while we hope to get at least Rs 1,100 crore from

ONGC on claims settlement," says Chalsani in an interview to CNBC-TV18. The stock rallied 19 percent.

02:50pm Zee Entertainment gains 4%
CLSA advises buying Zee Entertainment with a target price of Rs 339, citing marketing push for new Hindi channel 'Zindagi' has been gaining visibility. According to the report, the cost of new launches already factored in.

Meanwhile, more than one crore equity shares of the company exchanged on BSE and NSE at Rs 273.30-274/share.

02:40 pm Iraq crisis
Sunni militants have taken control of most of Iraq's largest oil refinery, located in Baiji in northern Iraq, an official at the refinery said.

"The militants have managed to break in to the refinery. Now they are in control of the production units, administration building and four watch towers. This is 75 percent of the refinery," an official speaking from inside the refinery said.

He says clashes continue near the main control room with security forces, reports Reuters.

02:30pm Voltas hits 3.5-year high
Shares of Voltas, the air conditioner manufacturer, touched three-year-and-five-month high of Rs 233.05. Bank of America Merrill Lynch (BoAML) upgraded the stock to buy from underperform as it thinks the company is well placed to benefit from a cyclical recovery in the consumer durables and the construction sectors.

It raised target price on the stock to Rs 282 (implying 24 percent upside from current levels). "Target price is driven by an EPS CAGR of 27 percent in FY14-17E (2-3 percent ahead of consensus) following sharp revisions and sustainability of its P/E at 25x for at least one more year," the brokerage house explains.

02:20pm Reliance Industries in focus
Reliance Industries said it will invest Rs 1.8 lakh crore across businesses in the next three years and launch the much-awaited 4G broadband services in 2015 as it looks to break-into top 50 companies of the world.

Addressing the 40th annual general meeting of RIL Chairman Mukesh Ambani, the world's richest energy billionaire, said Rs 1,80,000 crore will be invested in margin-enhancing petrochem units, expansion of energy business, opening more retail stores and roll-out of

telecom business. RIL's telecom arm Reliance Jio Infocomm, which is the only company to have nationwide permits for 4G services, will start rolling out broadband services in the coming months. It will begin with field trials in August and commercial launch in 2015, he said.

02:10pm MTNL shares in demand
Shares of MTNL rallied 7 percent as investors are pining hopes on its revival post new government's assurance.

Communications and IT minister Ravi Shankar Prasad has assured that the ailing state-run telecom companies MTNL and BSNL will see government emphasis to improve its condition.

The minister said he will directly monitor the performance of their network.

"I have decided that an NOC (network operating centre) will be set up in my chamber in which number of BSNL-MTNL towers working or not working will appear on a screen before me," he he said in his first formal press conference after taking over three weeks ago.

02:00pm Equity benchmarks recouped more than half of losses supported by short covering in banks, oil & gas and infrastructure stocks. The Sensex lost 134.34 points to 25386.85 and the Nifty fell 33.15 points to 7598.55. Crisis in the Iraq escalated further as a media report indicated that militants launched an assault on Iraq's main oil refinery.

Shares of ICICI Bank, TCS, Reliance Industries, HDFC Bank, Tata Motors, Sun Pharma, M&M, Tata Steel, HUL and Hero Motocorp slipped 1-2 percent. Index heavyweights ITC and HDFC lost 0.4-0.7 percent.

Drug maker Cipla bucked the trend, rising nearly 4 percent followed by Axis Bank, Hindalco Industries, GAIL and Dr Reddy's Labs with 1-1.5 percent.

Meanwhile, the rupee depreciated by 27 paise to 60.30 a dollar.

1:50 pm Buzzing: Shares of MTNL rallied 9 percent intraday as investors are pining hopes on its revival post the new government spearheaded by Narendra Modi.

Communications and IT minister Ravi Shankar Prasad has assured that the ailing state-run telecom companies MTNL and BSNL will see government emphasise to improve its condition.

The minister said he will directly monitor the performance of their network.

"I have decided that an NOC (network operating centre) will be set up in my chamber in which number of BSNL-MTNL towers working or not working will appear on a screen before me," he he said in his first formal press conference after taking over three weeks ago.

1:40 pm Expansion: Adani Group is looking to raise about USD 2.5 billion via the qualified instituitional placement (QIP) route. The company is also open to raise the money through loans from the foreign banks.
If it does happen it will be one of the biggest fund raising exercises that the Adani Group has done.

Reports had earlier indicated that in Q1, the company could look to raise close to about a billion dollars which would be via selling new shares of Adani Enterprises. So, a fair bit of dilution is possible. .

The group is also looking to raise additional USD 1.5 billion of which USD 500 million they have recently raised. This has largely been the refinancing of some of the loans that the company had taken mainly for its coal project and the expansion that they are doing in the

Australian region. Apart from that the additional USD 1 billion could also happen by way of external commercial borrowings (ECBs).

1:30 pm FOMC meeting: Shane Oliver, head investment strategy and chief economist, AMP Capital Investors, feels it is not going to be any surprise in terms of actual action by the FOMC which will announce a further tapering in the quantitative easing programme but the real focus will be around interest rates and that is where a bit of uncertainty could creep in.

"There is a bit of a risk of that occurring some time in the next few months. So, I do not know whether it would be triggered by tonight maybe from the Fed some point in the next few months. I the focus will shift and the Fed will start raising interest rates and they could upset part of the emerging world to some degree, they are still dependent on foreign capital," he adds.

1:20 pm Budget hope: The government sees oil prices going as high as USD 120 per barrel for three to four months because of fighting in Iraq, potentially driving a hole of at least 200 billion rupees (USD 3.4 billion) in the budget, two government sources told Reuters.

"If the oil prices remain high even for 3-4 months around USD 120 a barrel, it could have a significant impact on the fiscal deficit and economic growth," a senior Finance Ministry official told Reuters on condition of anonymity.

Finance Minister Arun Jaitley presents his maiden budget next month and faces headwinds from a weak economy, a food inflation scare and now the risk that higher oil prices could swell the government's oil subsidy bill.

Global cues are making the Indian market nervous. The Sensex is down 272.74 points at 25248.45 and the Nifty is down 76.60 points at 7555.10.

Tensions continue to simmer in Iraq as the country's largest oil refinery is shut down as a pre-cautionary measure. There have been reports of a militant attack on the country's main oil refinery.

About 1097 shares have advanced, 1690 shares declined, and 93 shares are unchanged. Sectorally, all indices except Healthcare are in the red with oil & gas and power stocks dragging the market lower. Crude prices spike with Brent above USD 113/barrel.

Asian markets are cautious as investors look ahead to FOMC decision tonight. BHEL, Tata Steel, NTPC, TCS and M&M are major losers in the Sensex while Cipla, Dr Reddy's Labs, Hindalco and GAIL are major gainers.

01:00pm Stake sale in PSBs likely?
There is no proposal or intent to divest stake in country's largest insurance company LIC, reports CNBC-TV18 quoting government sources.

It is learnt that the government is looking at reducing government's stake in public sector banks below 58 percent and will seek cabinet nod for the same.

Lowering government's stake in PSBs could be a Budget announcement, say sources.

12:55pm Kotak Mahindra on buyers' radar
Shares of private sector lender Kotak Mahindra Bank climbed 2.5 percent as the bank proposes to increase FII investment limit 40 percent from 37 percent in its 29th annual general meeting on July 16.

Brokerage house Morgan Stanley raised target price on the stock to Rs 1250 apiece from Rs 1100 earlier, saying the bank should benefit from structural recovery in lending, capital markets and stressed assets. "By FY17, return on equity could improve 4 percentage points to 19 percent, with Tier 1 of 14 percent, around 45 percent higher than the current system average," it adds.

12:45pm Cipla outperforms, up 3%
With reference to the news item appearing in a leading financial web portal titled "Promoters of company to sale stake to MNC", Cipla in in a clarification note to the exchange, says this news item is purely baseless and speculative in nature.

"We have consistently denied such rumours in the past and continue to do so," it adds.

12:35pm Rupee and Crude update
The Indian rupee fell 31 paise to 60.32 a dollar in afternoon trade.

Brent crude held above USD 113 per barrel on Wednesday as heavy fighting in Iraq shut the country's biggest refinery and led to the withdrawal of staff by foreign oil firms, stoking worries about exports from the key oil producer.

Some oil companies are pulling foreign staff from Iraq, fearing Islamic militants from the north could strike at major oilfields concentrated in the south despite moves by the Baghdad government to tighten security, reports Reuters.

12:30pm Market Expert
The market could correct 8-10 percent from current levels, cautions Vibhav Kapoor, Group CIO, IL&FS. But he is advising investors to buy on every decline and sees the Nifty touching 8300 by March.

In an interview to CNBC-TV18, Kapoor says the risk reward ratio right now is not favourable. Two key concerns are the possibility of deficient monsoons and high expectations from the Budget.

Kapoor sees 7000 as a strong support level for the Nifty, and is bullish on IT and pharma stocks. He is positive on cyclicals as well, but recommends that investors buy these stocks on corrections.

12:20pm Equity benchmarks extended losses in noon trade with the Sensex falling over 300 points after a media report suggested that militants launched an assault on Iraq's main oil refinery.

The Sensex lost 308.87 points or 1.21 percent to 25212.32 and the Nifty slipped 87 points or 1.14 percent to 7544.70. About 1280 shares have advanced, 1451 shares declined, and 104 shares are unchanged.

Shares of Reliance Industries, TCS, ICICI Bank, HDFC Bank, L&T, ONGC, HDFC, Tata Motors, Sun Pharma and NTPC plunged 1-2 percent. BHEL and Sesa Sterlite dropped 2.5 percent each.

However, Cipla and Kotak Mahindra Bank bucked the trend, rising 2.5 percent each.

In Reliance Industries' 40th annual general meeting, Mukesh Ambani says the company will be investing Rs 1.8 lakh crore in next three years, adding that period will be transformational for Reliance.

Globally investors became cautious ahead of outcome of two-day FOMC meet that will end tonight. Most of experts feel the Federal Reserve may cut monthly bond buying purchases by another USD 10 billion to USD 45 billion.

12:00 pm Impact of oil crisis: Lalit Kumar Gupta, CEO, Essar Oil, said the Iraq crisis is unlikely to have negative impact immediately as there is enough oil supply in the markets. ''Saudi Arabia has enough capacity to balance, besides there's not much of tension in the south of Iraq where most crude oil assets are located,'' he said.

However, Gupta said Essar Oil has enough refining capacity to avoid the crisis for now. He doesn't see any impact on refining margins due to rise in crude oil price.

The company's gross refining margins improved to USD 10.12 a barrel as against USD 9.06 a barrel year-on-year in the fourth quarter of FY14. The company has posted a five-fold growth in net profit at Rs 1,008 crore in Q4FY14 as against Rs 200 crore Y-o-Y.

11:50 am Budget hopes: The government sees oil prices going as high as USD120 per barrel for three to four months because of fighting in Iraq, potentially driving a hole of at least 200 billion rupees (USD 3.4 billion) in the budget, two government sources told Reuters.

"If the oil prices remain high even for 3-4 months around USD 120 a barrel, it could have a significant impact on the fiscal deficit and economic growth," a senior Finance Ministry official told Reuters on condition of anonymity.

Finance Minister Arun Jaitley presents his maiden budget next month and faces headwinds from a weak economy, a food inflation scare and now the risk that higher oil prices could swell the government's oil subsidy bill.

11:40 am Rail stocks piping hot: Rail stocks are once again hogging limelight as buzz of railway fare and freight rate gathers steam. Titagarh Wagons, Kalindee Rail Nirman, Kernex Microsystems and Texmaco Rail and Engineering rallied 5-10 percent intraday on Wednesday.

Ahead of the Budget, the Railway Board has recommended a hike in rail fares and Railway Minister Sadananda Gowda will meet Prime Minister Narendra Modi before taking a final decision.

"I will discuss the fare issue with the Prime Minister. A decision will be taken after discussion with the PM," Railway Minister D V Sadanand Gowda said after meeting Finance Minister Arun Jaitley.

Government sources say that the PM is reluctant to increase passenger fares of sleeper class, but may agree to hike AC 1st class and 2nd AC fares.

11:30 am Big bear:  The market could correct 8-10 percent from current levels, cautions Vibhav Kapoor, Group CIO, IL&FS. But he is advising investors to buy on every decline and sees the Nifty touching 8300 by March.

In an interview to CNBC-TV18, Kapoor says the risk reward ratio right now is not favourable. Two key concerns are the possibility of deficient monsoons and high expectations from the Budget.

Kapoor sees 7000 as a strong support level for the Nifty, and is bullish on IT and pharma stocks. He is positive on cyclicals as well, but recommends that investors buy these stocks on corrections.

Kapoor says the market has run ahead of fundamentals and could likely pause for a breather.

11:20 am Buzzing: Shares of TVS Motor rallied over 9 percent, hitting record high at Rs 147.60 per share intraday. Investors are excited as Bank of America Merrill Lynch suggests buying the stock for a 50 percent profit. The brokerage has also upgraded it to buy from underperform with a target of Rs 200 per share, as it feels that TVS Motor is best positioned to grow in volume with its launches lined up this year supporting better operating ratios and healthier balance sheet.

BoAML is also optimistic that scooters (22 percent exposure and fastest growing segment in two wheelers), motorcycles, where it is near absent in the commuter segment (66 percent of the market) and diesel three wheelers, where it has not participated so far (about 30 percent of demand) alongwith exports will drive 17 percent sales ahead of peers.

11:10 am Reliance AGM: Mukesh Ambani begins AGM address to its shareholders. It has been 37 years since company was first listed, says Senior Ambani adding he is pursuing his father's dreams more strongly today. Making a deep commitment to India's growth. Will be investing Rs 1.80 lakh crore in next three years. 2016-17 will be the first full year when the benefits of the investments start reflecting

Next three years will be transformational for RIL. The petrochemicals business will benefit from the highest capital allocation among the three energy businesses. Petrochemical business is being strengthened to add value to the refining and feedstock streams.

Achieved highest-ever export revenue last year. Polyester facility at Silvassa now operating at full capacity, will further strengthen RIL's position in the polyester segment highest ever. FY15, FY16 to focus on retail, petchem and telecom investments,

The market is consolidating once again. The Sensex is up 11.50 points at 25532.69 and the Nifty is up 5.80 points at 7637.50. About 1598 shares have advanced, 805 shares declined, and 84 shares are unchanged.

Relaince is up 1 percent as its 40th AGM is underway chaired by Mukesh Ambani. Cipla is up 4 percent while Hindalco, Sesa Sterlite, GAIL and ONGC are top gainers in the Sensex. Among the losers are TCS, Wipro, HDFC Bank, Sun Pharma and ITC.

The rupee is trading lower as the dollar strengthens against most Asian currencies, but further falls in the Indian unit seen unlikely as traders expect dollar sales from exporters during the session.

Caution persists due to the Iraq crisis as Brent crude prices remained steady above USD 113 per barrel as fears of oil supply disruptions from Iraq offset the possibility of increased supply due to a thawing of relations between Iran and the West.

Traders expect the Reserve Bank of India to step in to check any spikes in the pair. The rupee hit a near two-month high of 60.55 per dollar on Tuesday but scaled back after traders spotted dollar sales from the central bank through state-run banks.

Disclosure: Reliance Industries has made an open offer for the takeover of Network18, which owns Moneycontrol.com and other digital, print and TV channels

10:59am Interview
Lalit Kumar Gupta, CEO, Essar Oil, said the Iraq crisis is unlikely to have negative impact immediately as there is enough oil supply in the markets. ''Saudi Arabia has enough capacity to balance, besides there's not much of tension in the south of Iraq where most crude oil assets are located,'' he said.

However, Gupta said Essar Oil has enough refining capacity to avoid the crisis for now. He doesn't see any impact on refining margins due to rise in crude oil price.

The company's gross refining margins improved to USD 10.12 a barrel as against USD 9.06 a barrel year-on-year in the fourth quarter of FY14 . The fourth quarter went well as the year-end demand was good, said Gupta, adding that he expects margins to improve in the coming quarters.

Essar Oil's current rupee debt is over Rs 21,000 crore. Gupta said the company will use revenues to reduce debt, however, he said that they are not considering equity-led fundraising.

10:50am TVS Motors surges 9%
Bank of America Merrill Lynch has upgraded the stock to buy from underperform with a target price of Rs 200 implying a 50 percent upside from current levels.

The brokerage house expects margins to break out of historical range of 5.5-6 percent and raises margin assumptions by 100-250 basis points to 7.1-8.7 percent.

10:40am Adani group stocks in focus
Reports suggested that the group is planning a USD 2.5 billion fund raising via QIP and foreign loans. The group will raise USD 1 billion selling new shares of Adani Enterprises and will raise an additional USD 1.5 billion from banks abroad to fund various projects, the report said.

Adani Enterprises, Adani Power and Adani Ports rallied 1-2 percent.

10:30am Rate cut unlikely?
Country's second largest state-run lender Punjab National Bank (PNB) said interest rates are unlikely to come down in next 2-3 months as inflation is still high.

"I don't see a rate cut in the next 2-3 months," PNB Chairman and Managing Director K R Kamath said.

"As the RBI Governor has said, unless inflation is controlled there is no reason to bring down the interest rates...to that extent inflation control becomes a priority for the Reserve Bank," he said.

Headline inflation accelerated to five-month high of 6.01 percent in May from 5.2 percent previous month, mainly driven by high food and fuel inflation, reports PTI.

10:20am Market Expert
The market could correct 8-10 percent from current levels, cautions Vibhav Kapoor, Group CIO, IL&FS. But he is advising investors to buy on every decline and sees the Nifty touching 8300 by March.

In an interview to CNBC-TV18, Kapoor says the risk reward ratio right now is not favourable. Two key concerns are the possibility of deficient monsoons and high expectations from the Budget.

Kapoor sees 7000 as a strong support level for the Nifty, and is bullish on IT and pharma stocks. He is positive on cyclicals as well, but recommends that investors buy these stocks on corrections.

10:10am Kotak Mahindra Bank in demand
Kotak Mahindra Bank touched a record high of Rs 969.55, up over 3 percent on news the bank proposed to raise ceiling for FII investments in bank to 40 percent from 37 percent.

Brokerage house Morgan Stanley raised target price on the stock to Rs 1250 from Rs 1100 earlier.

10:00am Equity benchmarks continued to be in positive terrain with marginal gains. The Sensex roes 50.51 points to 25571.70 and the Nifty advanced 19.45 points to 7651.15 while the broader markets outperformed with the BSE Midcap and Smallcap indices gaining 0.8 percent each.

About 1495 shares have advanced, 674 shares declined, and 80 shares are unchanged.

Reliance Industries gained 0.2 percent ahead of its Annual General Meeting today at 11 am. The street may watch out for its commentary on Reliance Jio, the telecom business of the company.

Cipla topped the buying list, rising 6.5 percent followed by Kotak Mahindra Bank, Gail, Sesa Sterlite, Hindalco and ONGC with 1-3 percent. However, ICICI Bank, Wipro, ITC, TCS, HDFC Bank and Sun Pharma lost 0.5-0.8 percent.

10:00 am Houseviews: TVS motor is up 5 percent after Bank of America Merrill Lynch upgraded stock to buy from underperform, with a target price of Rs 200 implying a 50 percent upside. The brokerage expects margins to break out of historical range of 5.5-6 percent and raises margin assumptions by 100-250 basis points to 7.1-8.7 percent. ''The stock likely to re-rate on high earnings certainty,'' it adds.

Voltas also gained after the brokerage upgrade the stock from underperform to buy with a target price of Rs 282. It says despite rally from lows, the stock is at cheaper valuation versus peers.

9:50 am Big bull: Sunil Garg, JP Morgan says the India "bullish" story is a lot better accepted today than even a month ago with optimism originating from political change translating into better expectations for a cyclical revival, and hence strong absolute/relative performance for cyclical stocks.

''Fundamentally, it is hard not to share this optimism and we remain bullish on Indian equities. Tactically however, we now see a technical opportunity in rotating from banks to IT services,'' he adds.

9:40 am Buzzing: Shares of India's largest turbine maker Suzlon Energy are locked at 5 percent upper circuit after the company received approval by Corporate Debt Restructuring Committee for restructuring of existing bonds.

"The company has received approval of the Corporate Debt Restructuring Empowered Group for the restructuring proposal and has also received approval of the Reserve Bank of India, subject to specified conditions. The restructuring proposal, including the terms of the Restructured Bonds, is subject to the approval by the requisite majority of the holders of the Existing Bonds in each series," says Suzlon in its filing.

9:30 am FII view: Geoff Lewis, executive director, JP Morgan Asset Management is confident on India as an investment option and says it is one of the brokerage's strategic bet.

Speaking to CNBC-TV18, Lewis says that India is one of the best among S&P 500, European and emerging markets (EMs) Lewis further adds that he is bullish on infrastructure stocks and expects companies' whose capex has been held up, to perform well given the change of hand at the Centre.

"The emerging markets are starting to do better and we have seen that there was too much negativity towards the asset class, so they have clawed back some of that outperformance. I do not think we are in a major inflection point because looking at the export performance, it is still dependent on a recovery in the global economy. I do not think we are quite there yet," he elaborates.

It is a gap up opening on Wednesday. The Sensex is up 44.00 points at 25565.19 and the Nifty is up 4.35 points at 7636.05.

About 502 shares have advanced, 130 shares declined, and 26 shares are unchanged.
Cipla, GAIL, Sesa Sterlite, Coal India and M&M are top gainers in the Sensex. Among the losers are Hindalco, SBI, Maruti and Sun Pharma.

The Indian rupee slipped further. It has opened with a gap down of 26 paise at 60.29 per dollar against 60.03 Tuesday. The dollar index rose to 80.6 after the US CPI reading for May came in above market expectations and ahead of the FOMC decision tonight.

Pramit Brahmbhatt of Veracity said that, "Rupee is expected to gain as some of the indices in Asian markets have already started the day on a strong note. Range for the day seen between 59.70-60.50/dollar."

Global cues, meanwhile, are mixed with the US markets having extended their advance ahead of the FOMC decision. Asian markets are mixed in morning trade. Tensions continue to simmer in Iraq with the country's largest oil refinery shutting down as a pre-cautionary measure. Brent crude was trading above USD 113 per barrel.