Sensex, Nifty end in red; Bank Nifty at 17-month high

3:30 pm Market closing: After a lot of struggle, the market ended in red. The Sensex was down 46.44 points or 0.2 percent at 28077 and the Nifty was down 6.35 points at 8666.90. About 1480 shares have advanced, 1237 shares declined, and 182 shares are unchanged.

SBI, BHEL, Tata Steel, HUL and Cipla were top gainers while Coal India, TCS, Lupin, Sun Pharma and M&M were losers in the Sensex. Bank Nifty ended at new high.

2:55 pm Gold check: Gold rallied by Rs 100 to Rs 31,250 per 10 grams at the bullion market today on continued buying by jewellers even as the precious metal weakened overseas. However, silver fell by Rs 185 to Rs 46,465 per kg on reduced offtake by industrial units and coin makers.

Bullion traders said persistent buying by jewellers at domestic markets to meet festive season demand, mainly influenced gold prices.

Globally, gold fell 0.5 percent to USD 1,345.80 an ounce in Singapore as the dollar rebounded and a Federal Reserve policy maker said the US economy is strong enough to warrant an increase in interest rates soon.

2:45 pm View on banks: Large private sector banks are likely to get disproportionate market share over next couple of years says Munish Dayal, Partner of Baring Private Equity sharing his outlook on the banking sector in an interview to CNBC-TV18. Private sector banks, particularly few large ones, now have the ability to raise incremental capital, he says. Public sector banks, on the other hand, will continue to struggle with asset quality issues for a while and be unable to raise incremental capital, he adds.

He believes the merger of associates with SBI augurs well for the country's largest lender as it gets foothold in states where the associates have better presence and immediate benefits on treasury operations. This, apart from having 22 percent of industry's total advances and deposits and balance sheet size of roughly Rs 37 lakh crore.

2:30 pm Outlook: There have been more positive surprises, albeit marginally, than negative ones in first quarter corporate earnings, says Mahesh Patil, Co-CIO of Birla Sun Life AMC in an interview to CNBC-TV18. Patil says the fund is now picking up stocks with sustained visibility of growth like selective automobile companies and in the private sector banking and non-banking finance spaces. Patil believes good monsoon and pay hikes will lift consumer discretionaries. These factors will aid credit growth too leading to better growth in banking space, he says. He is more upbeat on private banking yet though, as even while non-performing assets of most public banks has peaked out, provisioning will continue to mar their profits and return on equity, he adds.

The market is listless with no major triggers seen. The Sensex is down 46.02 points or 0.2 percent at 28077.42 and the Nifty down 10.80 points or 0.1 percent at 8662.45. About 1419 shares have advanced, 1158 shares declined, and 185 shares are unchanged.

SBI, Tata Steel, Asian Paints, BHEL and Cipla are top gainers while Coal India, TCS, Bharti Airtel, HDFC and Axis Bank are losers in the Sensex.

European shares were poised to post their biggest weekly loss in two months and crude oil edged to eight-week highs on the back of a weaker dollar and hopes of a production cut. Mixed messages from the Fed in recent days have left investors cagey ahead of next week's annual meeting of central bankers from around the world in Jackson Hole, Wyoming, in which Fed Chair Janet Yellen is likely to cement expectations for a slow pace of rate increases.

European shares fell 0.6 percent on the day and are off 1 percent for the week, their biggest weekly loss since the mid-June. The index is down 6.7 percent this year, but has rebounded 11 percent from its post-Brexit vote low.

1:50 pm GST: The landmark Goods and Services Tax (GST) bill passed by Parliament recently is a legislative accomplishment by Prime Minister Narendra Modi which even his harshest critics cannot not dismiss, a top US expert has said.

"PM Modi, stung by the criticism that his government has not done enough to reshape India's economic landscape, has notched a legislative accomplishment that even his harshest critics can't easily dismiss," Milan Vaishnav of Carnegie Endowment for International Peace wrote in an op-ed in Foreign Affairs journal.

1:30 pm Interview: SBI's MD and Group Executive- National Banking B Sriram said larger gains from merger will be seen in another 1-2 years.

SBI is trying to align 70 percent of the gross non-performing loans (NPLs) of the associate banks with itself and post merger NPA on consolidated book could be roughly 50 basis points higher than SBI's current NPA level, he noted.

The management has taken best evaluation methods to justify the swap ratios, he said, adding, not various other parameters apart from the NPLs went into making the merger process smooth.

The market is struggling in red with the Sensex down 61.38 points or 0.2 percent at 28062.06. The Nifty is down 14.40 points or 0.2 percent at 8658.85. About 1368 shares have advanced, 1168 shares declined, and 166 shares are unchanged.

SBI, BHEL, Cipla, ONGC and ICICI Bank are gainers while Coal India, TCS, Adani Ports, HDFC and Bharti are losers in the Sensex.

Mutual funds' allocation for bank stocks slumped to Rs 82,000 crore at the end of July, after touching a record high in the preceding month. Prior to that, fund managers have been raising their allocation to banking shares since February. Although, they had trimmed exposure to the sector between November and
January due to higher bad loans.

Experts have attributed the trim in allocation to banking stocks to mounting bad loans of public sector banks.

In percentage terms, exposure to banking stocks fallen to 19.86 percent of equity AUM in last month as against 20.4 percent in June.

12:50 pm Exclusive: Indian Hotels is in talks to merge Taj GVK Hotels with itself as the GVK Reddy family wishes to exit the business, reports CNBC-TV18.

Sources say Indian Hotels, which currently holds around 25.5 percent in Taj GVK and Reddy family, which holds about 50 percent stake are in process of negotiating swap ratio for the merger.

Taj GVK, which has debt of roughly Rs 362 crore on its books, will cease to exist as separate listed entity if the merger goes through.   

12:30 pm Commodity: Foreigners may be avoiding China's stock market in droves, but it has offered up interesting opportunities, said Mark Matthews, head of research for Asia at Julius Baer. China's markets have stumbled since the start of the year, with the Shanghai composite down nearly 13 percent so far this year, even as US stock indexes have been tapping record highs. "It is the most despised market in the world. Foreigners have never been more underweight China than they are now," Matthews told CNBC.

The market is still under pressure as the Sensex is down 11.23 points at 28112.21 and the Nifty up 1.25 points at 8674.50. About 1479 shares have advanced, 934 shares declined, and 167 shares are unchanged.

SBI, BHEL, Cipla, L&T and Asian Paints are top gainers while Coal India, Bharti Airtel, TCS, Axis Bank and HDFC are losers in the Sensex.

Brent crude held firmly above USD 50 a barrel today as a bullish momentum continued, fuelled by hopes of an output freeze by key producers and data showing robust US demand.

Prices have roared back to enter a bull market, rallying more than 20 per cent from lows seen earlier this month when they pushed below USD 40 a barrel for the first time since April.

11:50 pm Exclusive: The AB Group has mounted a massive investor outreach to allay concerns about the plans to rejig the group, reports CNBC-TV18.

Sources say top Birla officials are meeting large shareholders of Grasim and AB Nuvo and reviewing their feedback. The process is likely to go on for few more days.

AB Nuvo shareholders are said to be against the plan of financial services being folded into Grasim and proposed independent structure for that business.

11:30 pm NPA: The banking sector's non-performing assets (NPA) almost doubled to 8.5 percent in the first quarter of this fiscal, driven by surging bad assets of state-run lenders, Care Ratings said. The banking system's gross NPAs shot up to 8.5 percent by the June quarter, as against 4.6 percent a year ago. The spike was largely due to the doubling of NPAs at public sector banks to 10.4 percent compared to 5.3 percent in June 2015. However, the rating agency did not quantify the bad loans in absolute terms. Private sector lenders witnessed their NPA ratio increasing to 3 percent from 2.1 percent a year ago, it added.

The market is sluggish with the Sensex down 30.60 points or 0.1 percent at 28092.84. The Nifty is down 4.50 points at 8668.75. About 1338 shares have advanced, 820 shares declined, and 146 shares are unchanged.

SBI, Asain Paints, NTPC, BHEL and Cipla are top gainers while Coal India, TCS, Bharti, HDFC and Axis Bank are losers in the Sensex. SBI associates State Bank of Bikaner and Jaipur, State Bank of Mysore and State Bank of Travancore are on a rise afeter swap ratio was announced last evening.

Brent crude held firmly above USD 50 a barrel in Asian trade today as a bullish momentum continued, fuelled by hopes of an output freeze by key producers and data showing robust US demand.

Prices have roared back to enter a bull market, rallying more than 20 percent from lows seen earlier this month when they pushed below USD 40 a barrel for the first time since April.

Members of the Organization of the Petroleum Exporting Countries and their rivals outside the group are to meet informally next month in Algeria, and there have been hints their talks could include ways to stabilise the oversupplied crude oil market.

10:55 am Fund raise: UltraTech Cement is looking to raise Rs 500 crore through issuance of secured redeemable non-convertible debentures (NCDs) on private placement basis.

The proposed issue of Rs 500 crore debentures will be listed on National Stock Exchange with deemed date of allotment on August 22, 2016, the company said in a BSE filing.

According to the statement, these debentures will mature on August 21, 2026. The company will offer coupon/interest rate of 7.53 percent per annum on these debentures.

10:45 am SBI merger impact: Higher gross non-performing assets (NPA) of associate banks is likely to weigh on State Bank of India (SBI) in the coming quarters, says Parag Jariwala, Vice President, Religare Capital Markets.

GNPAs of associate banks may rise to around 11 percent by the end of the second quarter of FY17 from 9.1 percent in the quarter gone by while the parent will end Q2 with GNPAs of around 8.5 percent, he says.

He expects the size of SBI to increase by 30 percent after merger with 5 associate banks and Mahila Bank.

While many cost synergies may arise out of the merger, being a public sector bank, it cannot fire redundant employees, he says, adding, pension-related costs will also grow higher.

10:30 am Corporate bonds: Banks can be allowed to pledge corporate bonds as collaterals for borrowing money from RBI under the liquidity adjustment facility, according to a high level panel.

Stating that such a provision is available in many countries, including the US, Australia and Japan, the panel said it is not "uncommon for central banks to take a lead with a view to developing the financial market".

The proposal has been made by the high level panel -- comprising representatives from Finance Ministry, RBI, Sebi, IRDAI and PFRDA -- which has also suggested various other measures to deepen the country's corporate bond market.

The market is absolutely flat but the Nifty is above 8650. The 50-share index is up 1.65 points at 8674.90 and the Sensex is up 8.70 points at 28132.14. About 1190 shares have advanced, 657 shares declined, and 104 shares are unchanged.

SBI, Cipla, BHEL, NTPC and Asian Paints are top gainers while Coal India, TCS, HDFC twins and HUL are losers in the Sensex.

Gold fell for the first time in five sessions as hawkish comments from US Federal Reserve officials renewed bets on a US rate hike this year.

European Central Bank rate setters agreed not to discuss any policy change at their July meeting and to keep market hopes for more stimulus in check, despite rising risks linked to Britain's vote to leave the European Union, minutes showed on Thursday.

9:55 am Steel companies in debt: The net debt of the top 30 steel companies globally has touched a record high of over USD 150 billion, according to consultancy firm Ernst and Young (E&Y). The global consultancy's report also reveals that major part of this (debt) is with companies in India, China and Brazil. Debt in the steel sector rose significantly between 2008 and 2013 before experiencing some relief in 2014, E&Y said in a statement. The relief was short-lived, however, as the pressure of excess capacity, rapidly cooling demand in China and the stronger position of steel customers drove a 30 per cent decline in steel prices in 2015, it added.

9:45 am Market check: The Sensex is up 10.82 points at 28134.26, and the Nifty is up 7.65 points  at 8680.90. About 1023 shares have advanced, 617 shares declined, and 89 shares are unchanged.

SBI, Cipla, BHEL, NTPC and Infosys are top gainers while Coal India, HDFC twins, TCS and Reliance are losers in the Sensex.

9:30 am Market outlook: Mahesh Nandurkar of CLSA said, "Our analysis of high frequency economic indicators reiterates that signs of economic recovery are not visible. Clearly, the market is moving on global liquidity cues and this is likely to continue as easy money chases emerging markets. While India does not enjoy the preferred status within EMs anymore it will still get its share of inflows." "Our recent meetings with US investors highlight that they have already reduced India exposure and scope for further underperformance is limited. FII flows are largely ETF-driven and this should augur well for large caps."

The market has opened in green. The Sensex is up 64.37 points or 0.2 per at 28187.81 and the Nifty is up 11.45 points or 0.1 percent at 8684.70. About 530 shares have advanced, 179 shares declined, and 32 shares are unchanged.

SBI, Infosys, ONGC, Axis Bank and Wipro are top gainers while Lupin, Adani Ports, Asian Paints, ITC and HDFC Bank are losers in the Sensex.

The board of country's largest lender, State Bank of India, has approved the merger of its associate banks, along with Bhartiya Mahila Bank, with itself. The merger will add to the strength of SBI -- which, at assets of about Rs 23 lakh crore, is roughly one-fourth of the Indian banking system -- with an additional capital base of about Rs 4 lakh crore.

The Indian rupee slipped in the early trade. It has opened lower by 14 paise at 66.95 per dollar versus 66.81 Thursday.

Pramit Brahmbhatt of Veracity said, "We expect the rupee to trade sideways despite positive economic data from US, as it will take cues from the domestic equity market and constant FII inflow." The dollar nursed declines on speculation of US interest rates will remain low amid unprecedented global stimulus.

Among global peers, Asian stocks edged up as Wall Street benefited from buoyant crude oil prices and expectations US borrowing costs will remain at stimulatory levels at least until year-end.

Japan's Nikkei added 0.5 percent and South Korea's Kospi tacked on 0.2 percent. Australian shares added 0.1 percent.MSCI's broadest index of Asia-Pacific shares outside Japan stood steady. The index was on track to rise 0.25 percent on the week, during which it reached a 1-year high.

Global equities received a lift this week after the Federal Reserve's July policy meeting minutes showed that the US central bank was in no hurry to hike interest rates.

US stocks eked out gains on Thursday following upbeat earnings and forecasts from Wal-Mart and as higher oil lifted energy shares.

Oil prices surged 3 percent overnight, with Brent hitting an eight-week high as the world's biggest producers prepare to discuss a possible freeze in production levels.