Sensex, Nifty end at over 2-month closing high; IT stocks drag

3:30 pm Market closing: Benchmark indices ended at over two-month closing highs as Indian market outperformed Asian peers. The Sensex was up 50.11 points or 0.2 percent at 27288.17, and the Nifty up 12.45 points or 0.1 percent at 8412.80. About 1529 shares advanced, 1245 shares declined, and 316 shares were unchanged.

Tata Steel, Tata Motors, Adani Ports, SBI and Hero MotoCorp are gainers while Infosys, ONGC, Reliance, Sun Pharma and GAIL are losers in the Sensex.

3:10 pm Exclusive: ReNew Power, which is gearing up for an IPO in FY18, is in the process of signing a large transaction which will give a big boost to its valuations, people privy to the details told CNBC-TV18.

ReNew Power is in talks with Japan-based energy supply chain services company Jera to sell a 10 percent stake for USD 200 million which will value the company at USD 2 billion. The deal is likely to be signed in a few weeks.

ReNew Power did not offer any comment to CNBC-TV18 on the deal with Jera.

3:00 pm Market Update: Benchmark indices remained higher with the Sensex rising 73.97 points to 27312.03 and the Nifty up 22.05 points at 8422.40.

About 1517 shares advanced against 1148 declining shares on the BSE.

2:50 pm Earnings: State-run housing finance company LIC Housing Finance's third quarter profit increased 19.2 percent to Rs 499.3 crore compared with Rs 419 crore in year-ago period, aided by net interest income.

Net interest income, the difference between interest earned and interest expended, grew by 22.6 percent year-on-year to Rs 915.4 crore in the quarter ended December 2016.

Provisions or write-off increased 31.7 percent year-on-year and 49.5 percent quarter-on-quarter to Rs 45.3 crore in third quarter of financial year 2016-17.

Earnings matched analysts' estimates. Profit was estimated at Rs 505.6 crore and net interest income at Rs 892.6 crore for the quarter, according to average of estimates of analysts polled by CNBC-TV18.

2:33 pm Moody's on fiscal deficit: The government is likely to achieve its fiscal deficit target of 3.5 percent of GDP in the current fiscal but higher infrastructure spending will limit the room to reduce it further to 3 percent in 2017-18, Moody's said today.

The credit rating agency expects the government to renew its commitment to increase capital spending and address the short-term disruptive impact of demonetisation in the Budget to be unveiled on February 1, 2017.

"On the fiscal front, the government will likely remain committed to achieving its fiscal deficit target of 3.5 percent of GDP for the fiscal year ending March 2017. However, room to reduce the deficit further to the target of 3 percent of GDP in the following year will be limited, due to the need for increased infrastructure spending and higher government salaries," Moody's Investors Service said in a statement.

2:18 pm Earnings estimates: LIC Housing Finance's third quarter profit is expected to increase 20.7 percent to Rs 505.6 crore compared with Rs 418.9 crore in year-ago period.

According to average of estimates of analysts polled by CNBC-TV18, net interest income is seen rising 19.5 percent year-on-year to Rs 892.6 crore from Rs 746.9 crore.

Key things to watch out for would be loan growth, net interest margin, asset quality and outlook on impact from bank's lending rate cut on margins & business going ahead.

2:00 pm Market Check
Equity benchmarks extended gains amid consolidation in afternoon trade, supported by banking & financials and Tata Group stocks.

The 30-share BSE Sensex climbed 76.35 points to 27314.41 and the 50-share NSE Nifty was up 14.95 points at 8415.30 while the BSE Midcap and Smallcap indices gained 0.3-0.5 percent on positive breadth.

About 1499 shares advanced against 1112 declining shares on the BSE.

Tata Motors was biggest gainer among Sensex 30 stocks, up 2.6 percent after CLSA raised target price on the stock to Rs 650 (from Rs 585 earlier) on likely significant improvement in both JLR and India businesses. Even benefits of significant pound depreciation will flow through into JLR's margin that may improve to 16 percent by FY19 from 10.3 percent in Q2FY17, it feels.

HDFC Bank, HDFC, Adani Ports, SBI, Axis Bank, Tata Steel and Lupin rallied 1-2 percent whereas Infosys, Reliance Industries, ITC, ONGC and Sun Pharma were under pressure.

Gold rose today, buoyed by safe-haven demand due to uncertainty over US policy ahead of President-elect Donald Trump's inauguration and amid concerns over Britain's exit from the European Union. US gold futures were up 0.62 percent at USD 1,203.60 per ounce.

1:45 European: Markets in Europe open lower on Monday as investors await more detail on the UK's Brexit plan and the inauguration of President-elect Donald Trump in the US later this week.

The pan-European Stoxx 600 was 0.30 percent lower with most sectors trading red.

The pound fell to a three-month low during Asian trading on Monday as investors are worried that Prime Minister Theresa May might outline plans for a "hard Brexit" during a speech scheduled for Tuesday. Over the weekend, the UK's finance minister Phillip Hammond told a German newspaper that if Britain doesn't keep its access to the EU's single market, London would pursue a new "economic model."

1:30 pm Upcoming IPO: Leading bourse BSE has fixed the price band at Rs 805-806 per share for its upcoming initial public offering (IPO), through which it aims to raise up to Rs 1,243 crore. The IPO opens on January 23 and closes on January 25, which will be the first by a domestic stock exchange. During the initial share sale -- this year's first as well -- shareholders will sell 15.43 million shares estimated to be around Rs 1,243.44 crore at the higher end of the price band. The IPO of 15,427,197 shares of face value of Rs 2 each will constitute up to 28.26 per cent of the fully-diluted post offer issued share capital of BSE, it said in a public notice.

The market is still holding firm with the Sensex up 51.81 points or 0.2 percent at 27289.87. The Nifty is up 12.40 points or 0.1 percent at 8412.75. About 1507 shares have advanced, 1040 shares declined, and 299 shares are unchanged.

Tata Steel, Tata Motors , Adani Ports, SBI and Axis Bank are top gainers while Infosys, ONGC, Reliance, ITC and GAIL are losers in the Sensex.

Gold rose Rs 135 to Rs 28,515 per 10 grams in futures trading today as speculators enlarged their positions, tracking a firming trend overseas.

Analysts said, speculators widened their bets, tracking a firming global trend, which supported the upside in gold prices at futures trade here.

12:59 pm Market Update: Benchmark indices were moderately higher. The Sensex gained 44.07 points at 27282.13 and the Nifty rose 10.05 points to 8410.40.

The market breadth was positive as about 1489 shares advanced against 1018 declining shares on the BSE.

12:55 pm Fuel consumption: India's fuel consumption is likely to hit 200 million tonnes in 2016/17, an oil ministry executive said on Monday, in what would be the highest such level in at least 16 years.

"Demand for petroleum products is increasing as the economy grows. India has the best growth amongst the large economies in the world ... we have massive hunger for petroleum products," said oil ministry Additional Secretay A K Sawhney.

India's fuel consumption surged 10.9 percent to 183.5 million tonnes in 2015/16.

A level of 200 million tones would compare to over 750 million tonnes in the United States last year and 500 million tonnes in China.

12:40 pm NHAI FY17 target: National Highways Authority of India (NHAI) plans to award 10-15 percent more projects this year compared to FY16, said Yudhvir Singh Malik, Chairman of NHAI. Speaking to CNBC-TV18 Malik said they look to award closer to 5,000-5,200 kilometres of projects by the end of the fiscal year.

In April 2016, Ministry of Road Transport and Highways had announced an ambitious target of awarding 25,000 kilometres of road projects in FY17. Of this, 15,000 would fall under NHAI and 10,000 under the Ministry and National Highways and Infrastructure Development Corporation (NHIDCL).

Malik agreed land acquisition posed the biggest challenge in achieving the target. To counter this roadblock in future, he said, NHAI plans to avoid any project awards unless 80 percent of the land is in possession and statutory clearances received. He said availability of funds is not an issue in achieving the target.

12:20 pm FII View: Ridham Desai of Morgan Stanley says there is a high level of uncertainty caused by the currency exchange, the upcoming Union Budget, general anti-avoidance rule (GAAR) and GST implementation, impending state elections, and flux in US policy.

However, valuations are attractive and set the case in favour of stocks, he feels.

He is overweight on consumer discretionary, financials, and technology and underweight on consumer staples, energy, materials and telecom.

In focus list, Desai says he is replacing LIC Housing Finance with analysts' favoured non-banking finance stock, Bajaj Finance.

12:05 pm Inflation: India's wholesale prices rose 3.39 percent year-on-year in December, their fastest pace in two months, government data showed on Monday.

The data compared with a 3.50 percent annual rise forecast by economists in a Reuters poll. In November, prices rose a provisional 3.15 percent.

Last month, wholesale food prices fell 0.70 percent year-on-year, compared with a provisional 1.54 percent gain in November.

12:00 pm Market Check
Benchmark indices remained volatile with the Nifty hovering around 8400 level ahead of December quarter earnings. Globally investors await more detail on the UK's Brexit plan and the inauguration of President-elect Donald Trump in the US later this week.

The 30-share BSE Sensex was up 24.28 points at 27262.34 and the 50-share NSE Nifty gained 1.80 points at 8402.15 after nearly 2 percent rally last week.

The broader markets continued to outperform benchmarks with the BSE Midcap and Smallcap indices rising 0.3 percent and 0.5 percent, respectively. About 1421 shares advanced against 979 declining shares on the BSE.

HDFC, Tata Motors, HDFC Bank, Adani Ports and SBI were leading contributors to Sensex's gains, up 0.5-2 percent. Tata Steel surged over 2 percent while Infosys and Reliance Industries fell over a percent followed by ITC and ONGC.

Asian markets were lower with Japan's Nikkei and Hong Kong's Hang Seng falling 1 percent each followed by China's Shanghai and South Korea's Kospi.

11:55 am Market views: The recent rally in the Indian equity market is not surprising and looking at the momentum the upswing could further stretch near the Budget announcement, says CNBC-TV18's Udayan Mukherjee.

Foreign institutional investor (FII) selling in emerging markets (EMs) has been relentless recently and among EMs, fund managers are trying to figure out which are expensive and which deserve to be expensive, he said.

Post Budget, there is no rush for foreign money to flood in to the market and instead even if the source of FII selling dries up and domestic investors remain emboldened - encouraged due to the Budget provisions - there is a reasonable chance that the market might have put in a bottom, he further added.

11:45 am FII view: Ridham Desai of Morgan Stanley says there is a high level of uncertainty caused by the currency exchange, the upcoming Union Budget, general anti-avoidance rule (GAAR) and GST implementation, impending state elections, and flux in US policy.

However, valuations are attractive and set the case in favour of stocks, he feels.

He is overweight on consumer discretionary, financials, and technology and underweight on consumer staples, energy, materials and telecom.

In focus list, Desai says he is replacing LIC Housing Finance with analysts' favoured non-banking finance stock, Bajaj Finance.

11:30 am Upcoming IPO: Stock market operator BSE Ltd has set the indicative price band for its initial public offering (IPO) of shares at between Rs 805 and Rs 806 apiece, according to a marketing term sheet for the offering. The IPO, which will open for bidding on Jan. 23, will see some of BSE's shareholders selling a total of 15.4 million shares, and will value the stock exchange at Rs 44 billion (USD 645.02 million) at the top end of the price range.

The market is still rangebound as the Sensex is up 38.60 points or 0.1 percent at 27276.66. The Nifty is up 5.30 points at 8405.65. About 1413 shares have advanced, 866 shares declined, and 303 shares are unchanged.

Tata Steel, Adani Ports, Tata Motors, HDFC and Axis Bank are top gainers while Infosys, Sun Pharma, Reliance, GAIL and ONGC are losers in the Sensex.

Oil prices inched up supported by a weaker dollar and expectations that OPEC and other producers will cut output as part of a deal to curb global oversupply. Traders said that prices were buoyed by a weakening dollar, which makes fuel purchases cheaper for countries that use other currencies domestically, potentially spurring demand.

After spending much of the second half of 2016 in an upward trend, the dollar has fallen around 2.5 percent against a basket of other leading currencies since its early-January peak.

10:40 am Interview: On the back of a strong showing in the third quarter, Murali Natrajan, Managing Director and Chief Executive Officer of private sector lender DCB Bank, told CNBC-TV18 that the ''low point is past us'' with respect to the impact of demonetisation and that stability on the cards.

DCB Bank reported at 25 percent surge in December quarter net at Rs 51 crore, driven primarily by a surge in the core interest income. Its net interest income rose 31 percent to Rs 209 crore, while the non-interest income was up 36 crore to Rs 64 crore during the reporting quarter.

Natrajan said the lender's CASA growth, which he termed as the ''toughest to crack'', had jumped 400 basis points in the quarter ending December, giving it 6-9 months headstart. The share of low-cost current and savings account balances increased to 25.85 percent as on December 31, from the 21.91 percent three months ago, on the back of a surge in deposits following the move to scrap Rs 500 and Rs 1,000 notes by the Central government.

10:20 am FII View: Pointing out the macro data in the months of November and December may contain demonetisation ''one-offs'', Neelkanth Mishra of Credit Suisse said the impact of the currency recall exercise will extend beyond the March quarter. It will be take about 12-18 months to assess the complete impact of demonetisation, he said.

Mishra pegged corporate earnings growth in FY18 at 10-12 percent, while saying the FY17 earnings growth may be hit due to demonetisation.

Sharing his outlook on the IT sector which has seen slowdown in the recent quarters, Mishra said it is possible that IT sector revenues will grow in the next few quarters. If corporate spending in the US increases on account of factors like taxes, Indian IT companies will benefit, he added.

10:00 am Market Check
Benchmark indices recouped early losses with the Nifty reclaiming 8400 level. HDFC group and Tata group stocks supported the market while FMCG and select IT stocks remained under pressure.

The 30-share BSE Sensex was up 5.30 points at 27243.36 and the 50-share NSE Nifty fell 6.80 points to 8393.55 while the broader markets outperformed benchmarks. The BSE Midcap and Smallcap indices gained 0.3 percent each.

Tata Motors, Tata Steel and TCS gained 0.4-1.6 percent after a media report indicated that borrowing costs could fall 20-30bps after appointment of Chandra as Chairman of Tata Sons.

HDFC Bank, HDFC, L&T, SBI and Lupin rose 0.6-1 percent while Infosys fell further, down more than 1.5 percent followed by Reliance Industries, ITC, ICICI Bank and HUL.

9:50 am Fund flush: The Finance Ministry is likely to finalise capital infusion plan for public sector banks (PSBs) this week based on the request of various lenders which have been impacted by demonetisation amid rising bad loans.

Final touches are being given based on the feedback from all banks and the plan should be ready by this week, sources said.

The capital infusion would be more than Rs 25,000 crore announced in the earlier Budget and the additional requirement would reflect in the final batch of Supplementary Demand for Grants to be presented in the upcoming Budget session, they said.

Saddled with rising bad loans, banks have already made a case for higher capital infusion and it is reflected in their demand sent to the ministry, sources added.

9:45 am Market outlook: Pegging the Sensex target at 29,000 for December-end 2017, global financial services major Bank of America Merrill Lynch (BofA-ML) said Indian equity markets should deliver positive returns in the year despite uncertainties created by demonetisation and GST.

BofA-ML also estimates a double-digit growth rate at 12-14 per cent for earnings in the next fiscal (2017-18) as well as 2018-19, underpinned by financials which are expected to lower provisions going forward.

"Despite uncertainties created by demonetisation/GST, we think Indian equities should deliver positive returns in 2017 (Sensex December 17 at 29,000)," BofA-ML said in a report.

9:30 am FII view: Mahesh Nandurkar of CLSA says repo rate cuts over the last two years by the RBI were not completely transmitted into lending rate cuts.

But after demonetisation, improved liquidity has driven banks to cut marginal cost of funds based lending rate (MCLR) by up to 90 bps, he adds.

He believes new MCLR should become the effective cost of borrowing gradually over the next 12 months, which is likely to bring a 1 percent increase in FY18 earnings for coverage universe.

Nandurkar says preferred picks on the back of this interest cost reduction theme are JSW Steel, IRB Infrastructure, Sadbhav Engineering, Apollo Hospitals, Tata Communications, PVR, Arvind and Aditya Birla Fashion & Retail.

The market has opened flat Monday as the Sensex is down 2.82 points at 27235.24. The Nifty is down 9.40 points or 0.1 percent at 8390.95. About 283 shares have advanced, 160 shares declined, and 183 shares are unchanged.

Coal India, HDFC Bank, Tata Motors, Lupin and Hero MotoCorp are top gainers while Infosys. Cipla, ICICI Bank, NTPC and Asian Paints are losers in the Sensex.

The Indian rupee opened lower by 8 paise at 68.23 per dollar versus 68.15 Friday.

Pramit Brahmbhatt of Veracity said, "The USD will trade with a positive bias considering weak cues from global as well as domestic equity market. The trading range for spot USD-INR pair will be 68-68.50/dollar."

Pound tumbled followed media reports that suggest that UK's Prime Minister Theresa May's government was prepared to make a "hard" or "clean" exit from the European Union, ahead of her speech tomorrow.

Asian markets are lower as the British pound fell more than 1 percent on fears preparing the United Kingdom is ready for a hard exit from the European Union.

The British pound tumbled from levels above USD 1.2176 to about USD 1.2036 Monday morning during Asian hours. The euro gained against the pound, climbing to 0.8824, from levels near 0.8720. The Shanghai Composite and Shenzhen Composite dropped over 1 percent, while Hong Kong's Hang Seng declined 0.7 percent.

Meanwhile international energy agency says that global oil prices will witness "much more volatility" in 2017 even though markets may rebalance in the first half of the year if output cuts pledged by producers are implemented.

Gold prices traded above 1200 dollars an ounce.