Sensex, Nifty end flat amid volatility; Bharti, Reliance up 2-7%

3:30 pm Market closing: The market has ended on a flat note with the Nifty below 8650. The 50-share index was down 5.60 points at 8635.65 while the Sensex slipped 32.90 points or 0.1 percent at 27849.56. Bharti, Reliance, Asian Paints, Sun Pharma and Dr Reddy's Labs were top gainers. Tata Motors, Tata Steel, ONGC, SBI and Hero MotoCorp are losers in the Sensex.

3:10 pm Fund raising: PNB promoted Punjab Housing Finance plans to raise up to Rs 1,025 crore for business expansion by issuing bonds in a private placement basis.

The private placement of secured redeemable non-convertible debentures (NCDs) for a total amount of Rs 1,025 crore including green shoe option, will open on January 30, the company said in a statement. The issue will close on January 31.

The funds raised will be used to spread out branch network in tier II and III cities and grow loan book while maintaining an adequate capital adequacy ratio, the company said.

"The company is raising funds from the bond market after a long time at the finest spread which is better than the pre-IPO levels. We continue to maintain a diversified and cost effective funding mix with one of the lowest cost of borrowing in the industry," Jayesh Jain, Chief Financial Officer, PNB Housing Finance said.

2:59 pm Acquisition: Piramal Enterprises today said it will acquire a portfolio of intrathecal spasticity and pain management drugs from UK-based Mallinckrodt for USD 171 million (around Rs 1,162 crore) in an all cash deal.

The company's UK-based wholly-owned subsidiary Piramal Critical Care has entered into an agreement with Mallinckrodt for acquiring the drugs and may also pay an additional USD 32 million depending on financial performance of the acquired assets over the next three years.

The acquired portfolio includes Gablofen (baclofen), a severe spasticity management product, which is currently marketed in the US and two pain management products, which are currently under development.

2:50 pm REC signs MOU: State-owned Rural Electrification Corporation has inked three pacts to extend financial assistance of around Rs 60,000 crore to Andhra Pradesh.

"Memorandum of Understanding (MoU) signed by REC for extending financial assistance to the tune of Rs 60,000 crore in the state of Andhra Pradesh," Rural Electrification Corp informed BSE today.

According to the statement, REC has signed three MoUs for extending financial assistance of around Rs 60,000 crore in the state for the next five years (till March 2022).

The financial assistance comprises Rs 40,000 crore to Andhra Pradesh Power Generation Corp, Rs 10,000 to Transmission Corporation of Andhra Pradesh and Rs 10,000 crore to AP DISCOMSs.

2:40 pm Fitch on BILT: Fitch Ratings today downgraded the long-term issuer default ratings on paper maker Ballarpur Industries (BILT) and its subsidiary Bilt Paper BV to a more speculative grade while maintaining the grading on Rating Watch Negative (RWN).

Citing worsening liquidity situation and curbing of operations of the company due to inadequate working capital, the agency said it has downgraded the ratings on BILT and its arm "to CCC, from B-".

Fitch had downgraded BILT and placed it on RWN on July 29, 2016, based on its deteriorating credit profile and significant refinancing risks for upcoming debt maturities.

2:20 pm Stake buy: After Tata Group, India's largest fertiliser producer IFFCO has envisaged interest in taking 10 percent stake in Rs 5,900 crore floating LNG import terminal being set up by Nikhil Merchant-led Swan Energy in Gujarat.

Earlier this month, Tata Realty and Infrastructure (TRIL), a wholly-owned subsidiary of Tata Sons set up in 2007, had expressed interest in taking 10 percent stake in Swan LNG Pvt Ltd that is setting up the Floating and Regasification Unit (FSRU) near Jafrabad in Gujarat.

In a stock exchange filing, Swan today said: "Indian Farmers Fertiliser Cooperative Ltd (IFFCO) are willing to invest up to 10 percent of the equity" in the project.

Ahead of the move, the authorised share capital of Swan LNG Pvt Ltd "has been increased from Rs 5 lakh to Rs 2,000 crore," Swan Energy said in a separate filing.

2:00 pm Market Check
Benchmark indices remained rangebound in afternoon trade, with the Nifty gyrating in a 30-point range as investors focussed on Union Budget that will be presented on February 1.

The 30-share BSE Sensex was down 20.10 points at 27862.36 and the 50share NSE Nifty declined 5.40 points to 8635.85. The market breadth was negative as about 1493 shares declined against 1138 advancing shares on the Bombay Stock Exchange.

The market has not yet reached a point where it looks ''significantly overbought'', says Gautam Shah, Associate Director & Technical Analyst at JM Financial. Shah believes there is still some juice left in the rally.

As the market has moved higher in last three weeks, strong support has been created on the downside, he says, adding, 8450-8550 has become a "rock-solid" area of support for Nifty. ''Whatever happens in the Budget I believe this support zone should get respected,'' he says.

Idea Cellular shares rallied 26 percent after Vodafone confirmed merger talks with the company. The rally also spilled over to other telecom stocks like Bharti Airte and Reliance Communications that gained 8 percent and 12.5 percent, respectively.

Tata Motors, TCS, SBI, ONGC and Tata Steel were down 1-2 percent while Reliance Industries, Sun Pharma and Dr Reddy's Labs gained a percent each.

Markets in Europe started the week on a negative footing with investors focused on corporate earnings and digesting international concerns over US President Donald Trump's introduction of a travel ban on refugees coming from seven Muslim-majority countries.

1:50 pm Nomura raises concerns on Trump effect US President Trump's plans to raise H-1B minimum salaries, prefer Americans over migrants, limit green cards for foreign workers and scrap H-1B extensions, are the main source of India's vulnerability, says Nomura in its note to clients. Indian nationals comprised 86 percent of H-1B visas issued for technology firms in 2014. ''The viability of the offshoring model of Indian software firms would be at risk. Remittances from the US (around 16 percent of total inflows in 2015) would also likely moderate, widening the current account deficit,'' the Nomura note says.

1:30 pm Vodafone-Idea merger talks: In what will create India's largest telecom company with revenues of over Rs 80,000 crore, Vodafone said that it is in exploratory discussions with the Aditya Birla group's telecom arm Idea Cellular for a merger.

The merger, if it goes through, will create India's largest telecom player both in revenues and subscribers. What fuels the talk of a merger include threat to the two incumbents and Bharti Airtel from Reliance Jio. The latest entrant in the telecom sector, Reliance Jio is fast acquiring subscribers on the back of free voice and data services under its Happy New Year offer. Reliance Industries' telecom subsidiary Jio acquired 72.4 million subscribers in the four months of commencement of services.

Idea Cellular's stock soared 28 percent intraday on the BSE on the back of the development.

1:20 pm Expert view: The market has not yet reached a point where it looks ''significantly overbought'', says Gautam Shah, Associate Director & Technical Analyst at JM Financial. Shah believes there is still some juice left in the rally.

As the market has moved higher in last three weeks, strong support has been created on the downside, he says, adding, 8450-8550 has become a "rock-solid" area of support for Nifty. ''Whatever happens in the Budget I believe this support zone should get respected,'' he says. He expects Nifty to touch 8,750 in the extreme short term and hit 8,900 in the medium term. A correction is likely thereaft

The market continued to be rangebound in the run up to the Union Budget on February 1.

The 30-share Sensex was down 14.54 points at 27867.92 while the Nifty has fallen 6.45 points at 8634.80.

Tata Motors and TCS are dragging the index, with losses of 1.36 percent and 1.21 percent, respectively.

Telecom stocks are carrying forward their momentum from the morning gains on the Nifty, with Idea Cellular gaining nearly 9 percent, while Bharti trading 4.6 percent higher. Meanwhile, Bharti Infratel and Aurobindo Pharma are the top losers on the index.

HDFC was trading half a percent higher after its profit on standalone basis increased 11.88 percent year-on-year to Rs 1,701.21 crore in the quarter ended December 2016. It was impacted by higher provisions and tax cost but supported by net interest income growth.

The rupee was trading at Rs 68 against the US dollar, a fall of 0.03 paise. Gold was hovering around USD 1200 an ounce, while US crude lost half a percent at USD 52 a barrel.

12:46 pm Earnings: Housing Development Finance Corporation (HDFC) said profit on standalone basis increased 11.88 percent to Rs 1,701.21 crore in Q3 compared with Rs 1,520.51 crore in year-ago period.

Calculated net interest income during the quarter grew by 19.1 percent to Rs 2,847.54 crore compared with Rs 2,390 crore in same quarter last year.

12:30 pm Budget expectations: Corporate India's crying out for a stimulus Budget from Finance Minister Arun Jaitley on Wednesday, which can boost growth as demand and investments remain anemic. While private investments have been down thanks to the ongoing corporates deleveraging their balance sheets, consumption, too, has taken a beating after demonetisation.

Reviving demand seems to be on top of India Inc's wishlist this time around. Higher government spending and lower taxes are being seen as two key drivers of growth. In an interview to Moneycontrol, AM Naik, Chairman of L&T Group, said he expected the government to come out with a Budget that will stimulate the economy, following the slowdown in economic activity that was triggered by the note ban. The ask remains the same across sectors, as demand has significantly come off since November and analysts do not expect it to revive in a meaningful way in the near-term.

12:15 pm Interview: For the third quarter of FY17, textile manufacturer Arvind reported a 14.4 percent increase in revenue to Rs 2323 crore year-on-year (YoY) and its EBITDA fell 8.2 percent to Rs 235 crore (YoY).

In an interview with CNBC-TV18, Kulin Lalbhai, ED of Arvind, said that the drop in EBITDA was on the back of trade channels that witnessed a liquidity crisis.

He said that post the temporary shock due to demonetisation, business is now seeing a strong recovery. Lalbhai expects revenue to grow at 24 percent for its brands business.

12:00 pm Market Check
Benchmark indices as well as broader markets continued to consolidate as investors awaited Union Budget that will be presented in parliament on February 1. The Nifty already saw pre-Budget rally, up 9 percent in last one month.

The 30-share BSE Sensex was up 9.92 points at 27892.38 and the 50-share NSE Nifty fell 2.25 points to 8639.

The Union Budget 2017 will be a tightrope for Finance Minister Arun Jaitley to boost public spending and also keep deficit within limits, Ravi S Muthukrishnan of ICICI Securities says.

In CY17, he expects government spending on infra to sustain, demonetisation pain to dissipate and economy to revert to normalcy.

HDFC recouped early losses, up 0.3 percent ahead of third quarter earnings. A CNBC-TV18 poll expects 10.6 percent growth in profit YoY.

Idea Cellular shares spiked 9 percent on hopes of merger with Vodafone, the country's second largest telecom operator by subscriber base. Bharti Airtel also gained 5 percent.

Oil prices extended declines today, dragged down by signs of growing output in the United States that could partly offset output cuts by OPEC and other producers. London Brent crude for March delivery dropped 0.47 percent to USD 55.26 a barrel and NYMEX crude for March delivery was down 0.43 percent at USD 52.94 a barrel.

11:50 am Chidambaram's Budget tips to Jaitley: In his weekly column in the Indian Express newspaper, former Finance Minister P Chidambaram has offered some ''unsolicited advice'' for Arun Jaitley, who will be presenting his fourth Budget on Wednesday. Chief among the suggestions are that the government should not cut direct tax rates-income tax and corporate tax-and that it should instead cut indirect taxes like service tax and excise duties to boost demand in the economy. It is widely expected that the Budget will announce relax the income-tax threshold limits to regain the goodwill of the middle class, which has been inconvenienced by demonetisation.

11:40 am Earnings poll: Software firm Tech Mahindra's third quarter profit is expected to increase sharply by 21.2 percent sequentially to Rs 780 crore on strong operational performance. Rupee revenue during the quarter may increase 3 percent quarter-on-quarter to Rs 7,379.5 crore and dollar revenue is seen rising 2 percent to USD 1,094 million, according to average of estimates of analysts polled by CNBC-TV18.

Constant currency dollar revenue growth may be 3 percent. Topline growth may be supported by incremental 1.5-month contribution from Target group. Telecom business should do well aided by slight improvement in Comviva and stable LCC, say analysts.

11:20 am Market outlook: Capital gains tax and corporate tax are the parameters that the Street would be watching when Finance Minister Arun Jaitley presents Budget 2017 on February 1, feels veteran commentator Udayan Mukherjee. Any taxation on equity markets, though unlikely, will definitely irk the markets, the CNBC-TV18's Consulting Editor told the channel, adding that the markets haven't factored in imposition of long-term capital gains tax. While the effect of a direct tax cut depends on the amount of relief the government provides, it may not be, however, a game-changer, Mukherjee said.

Commenting on recently market rally, he said that Nifty hitting 8600-8700 levels surprised many of the Dalal Street. The rally was partly driven by a combination of factors such as good earnings report card of companies, global upmove and Budget expectations, he said. On February 1, consumer-related plays will come out depending on tax cuts announced by the Finance Ministry, Mukherjee said, expressing reservations that such rally may not be sustainable. Housing companies stand to benefit on tax exemptions, he said.

Consolidation continued on equity benchmarks ahead of the Union Budget on February 1. The 30-share Sensex was trading flat with a negative bias at 27867.73, while the broader index Nifty was trading lower by 0.12 percent at 8630.95.

About 1,097 shares have advanced, 1,183 shares declined, and 256 shares are unchanged.

Bharti Airtel and Sun Pharma were top gainers in the Sensex, with gains of 4.28 percent and 1.69 percent, respectively. Hero MotoCorp and Tata Motors were the top losers on the index, after having lost 1.49 percent and 1.48 percent respectively. Telecom stocks were the top gainers on the Nifty, with Idea Cellular gaining 7.12 percent. The stock is witnessing strong movements on rumours of a merger from Vodafone. Aurobindo Pharma was the top loser on the index after having lost 1.48 percent.

On the currency front, the rupee was trading at 68.06, up 0.02 paise, against the dollar.

Meanwhile, gold was trading higher at Rs 28,420. The yellow metal has gained 0.24 percent.

10:59 am Market Update: Benchmark indices remained directionless as investors awaited Union Budget that will be presented on Feburary 1.

The Sensex was down 5 points at 27877.46 and the Nifty fell 7.95 points to 8633.30.

10:53 am Auto demand: The auto sector, which saw a revival last year after two years of turbulence, is set to continue the momentum this year with demand picking up across all segments, says a report.

Growth of the auto industry is expected to continue in 2017 across all vehicle categories-commercial and passenger vehicles, as well as two and three-wheelers. But it is unlikely that the industry will maintain the sales growth of 2016 due to the note ban impact and the uncertainty regarding the GST, says Dun & Bradstreet in a report.

The report, however, does not quantify its proejction.

In 2016, auto sales grew 9.2 percent driven by two- wheelers that moved up by 9.6 percent from 0.7 percent in 2015. At the same time, cars clipped at 7 percent and commercial vehicles grew 7.8 percent.

"Improving economic growth, robust demand from rural and semi-urban markets and lower cost of ownership have driven sales in 2016, bringing in a much needed recovery for the industry, after growth slumped in 2015," he report said.

10:39 am Earnings estimates: Software firm Tech Mahindra's third quarter profit is expected to increase sharply by 21.2 percent sequentially to Rs 780 crore on strong operational performance.

Rupee revenue during the quarter may increase 3 percent quarter-on-quarter to Rs 7,379.5 crore and dollar revenue is seen rising 2 percent to USD 1,094 million, according to average of estimates of analysts polled by CNBC-TV18. Constant currency dollar revenue growth may be 3 percent.

EBIT (earnings before interest and tax) is expected to jump 13 percent to Rs 933.5 crore and margin may expand 115 basis points to 12.65 percent compared with previous quarter, led by absence of 120 bps of restructuring costs seen last quarter and operating efficiencies.

10:18 am Budget Expectations: With Budget just a few days away for the Finance Minister Arun Jaitley to unwrap it on February 1, brokerage houses have a slew of expectations for the real estate from the Budget 2017-18 which is expected to lift realty sector out of the woods.

The real estate sector has been facing headwinds in recent years on account of inventory overhang in certain markets and subdued consumer sentiments.

Most brokerage houses expect the government to increase the tax deduction limit for housing loans, particularly for buyers in metropolitan cities.

''The Rs 2 lakh limit is insignificant for metropolitan home buyers, as the ticket size is over and above Rs 60 lakh. Also, tax concessions on house insurance premiums could be introduced to encourage end users to insure their homes,'' said Angel Broking in its pre-Budget research note.

10:00 am Market Check
Equity benchmarks continued to consolidate in morning after last week's 3.5 percent rally on the Nifty and ahead of Union Budget scheduled to be presented on February 1.

The 30-share BSE Sensex was down 9.60 points at 27872.86 and the 50-share NSE Nifty fell 7.75 points to 8633.50.

Telecom operator Bharti Airtel (up 4.6 percent) and Idea Cellular (up 7.6 percent) were top gainers among Nifty stocks. Reports suggest that Vodafone and Idea Cellular may consider merger.

Sun Pharma gained 2 percent after subsidiary Ranbaxy Labs has received approval from US FDA for Triamcinolone Acetonide spray that is used to relieve skin inflammation, itching.

L&T rose 1 percent despite the company lowered full year revenue growth and order inflow guidance to 10 percent each from 12-15 percent and 15 percent, respectively. The rally may indicate that the stock already priced in impact of demonetisation and also created bottom for itself.

Tata Motors, HDFC Bank, TCS, Infosys, SBI, Wipro and Tata Steel were under pressure.

HDFC was moderately lower ahead of earnings due in afternoon. A CNBC-TV18 poll expects profit growth of 10.6 percent in Q3.

9:55 am Auto outlook for 2017: The auto sector, which saw a revival last year after two years of turbulence, is set to continue the momentum this year with demand picking up across all segments, says a report.

Growth of the auto industry is expected to continue in 2017 across all vehicle categories-commercial and passenger vehicles, as well as two and three-wheelers. But it is unlikely that the industry will maintain the sales growth of 2016 due to the note ban impact and the uncertainty regarding the GST, says Dun & Bradstreet in a report.

The report, however, does not quantify its proejction.

In 2016, auto sales grew 9.2 percent driven by two- wheelers that moved up by 9.6 percent from 0.7 percent in 2015. At the same time, cars clipped at 7 percent and commercial vehicles grew 7.8 percent.

9:45 am Result poll: Housing finance company HDFC's profit is expected to increase 10.6 percent year-on-year to Rs 1,681.2 crore in the quarter ended December 2016.

Net interest income, the difference between interest earned and interest expended, may grow 7.8 percent to Rs 2,352.9 crore compared with Rs 2,182.1 crore in year-ago period, according to average of estimates of analysts polled by CNBC-TV18.

Key things to watch out for would be net interest margin, asset under management and asset quality.

Analysts say if net interest margin comes above 3.75 percent (against 3.8 percent in Q2), asset under management at 15 percent and gross non-performing assets below 0.85 percent (against 0.75 percent in Q2) then that will be positive.

9:30 am Market outlook: Ravi S Muthukrishnan of ICICI Securities says the Union Budget 2017 will be a tightrope for Finance Minister Arun Jaitley to boost public spending and also keep deficit within limits.

In CY17, he expects government spending on infra to sustain, demonetisation pain to dissipate and economy to revert to normalcy.

Sectorally, he is overweight on autos, consumer discretionary, private banks, non-banking finance companies, cement and energy.

The market has opened in red on the crucial Budget week. The Sensex is down 16.18 points at 27866.28, and the Nifty down 8.10 points at 8633.15. About 197 shares have advanced, 131 shares declined, and 112 shares are unchanged.

ITC, L&T, ICICI Bank, Sun Pharma and ONGC are top gainers while Infosys, Tata Motors, Adani Ports, Axis Bank and HDFC Banks are losers in the Sensex.

The Indian rupee opened marginally lower at 68.06 per dollar on Monday versus Friday's close 68.04.

Pramit Brahmbhatt of Veracity said, "We expect the dollar to gain and the trading range for the USD-INR pair is seen between 68-68.20/dollar." Dollar slipped, nudging off a one-week high against a basket of currencies after treasury yields declined on data showing the US economy grew at a slower-than-expected pace.

In the Asian markets, Nikkei was trading lower by 0.77 percent after data showed that December retail sales rose 0.6 percent from the previous year. Another key event to watch for the markets there would be Bank of Japan's crucial two-day monetary policy meeting. Meanwhile, markets in China, Singapore, Hong Kong, South Korea and Taiwan are shut for public holidays.

Wall Street ended on a mixed note on Friday after the initial fourth-quarter GDP read fell short of estimates, but managed to record weekly gains of around 1 percent. The Dow Jones slipped 10 points but held above 20,000-mark.

US President Trump Friday introduced immigration curbs that has sparked a backlash in the United States and abroad. He put a 120-day hold on allowing refugees into the country, an indefinite ban on refugees from Syria and a 90-day bar on citizens from Iran, Iraq, Libya, Somalia, Sudan, Syria and Yemen.

Crude prices were lower, extending losses, after data suggested drilling is ramping up in the United States, easing the focus on efforts by OPEC and other producers to support prices by cutting supplies.

Gold prices remained steady, but traded below 1,200 dollars an ounce.