Sensex up 103 points; Reliance zooms 11%, tech & HDFC twins drag

3:30 pm Market Closing: Reliance helped the Sensex close 103 points higher on Wednesday, though IT and HDFC Group stocks capped gains.

Reliance posted biggest single day gain since May 19, 2009, jumped 11 percent to close over Rs 1200-mark.

The 30-share BSE Sensex was up 103.12 points at 28864.71 and the 50-share NSE Nifty rose 19.05 points to 8926.90 but the market breadth was negative.

About 1763 shares declined against 1088 advancing shares on the BSE.

Axis Bank, Coal India and Asian Paints were other gainers while TCS, Infosys, HDFC and HDFC Bank fell 1-2 percent.

3:26 pm HOV Services in action: The stock surged 7 percent after the Board of directors of the company, on Wednesday, approved the proposed business combination of SourceHOV Holdings Inc., a Delaware (USA) based
corporation and Novitex Holdings, Inc with Quinpario Acquisition Corp. 2, publicly traded company listed on NASDAQ.

3:20 pm BEL OFS: Govt official says Bharat Electronics' offer for sale issue has been witnessing record interest by FIIs and also there has been wide participation by institutional investors including banks.

According to them, the issue may see a record 50 percent subscription by FIIs. Non-retail investors' reserved portion in the offer for sale issue, which will remain opened till February 23, has oversubscribed today.

3:10 pm Solar power capacity: The government today approved doubling of capacity to 40,000 MW in solar parks and Ultra Mega Solar Power Projects (UMSPP).

"The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Narendra Modi, today approved the enhancement of capacity from 20,000 MW to 40,000 MW of the Scheme for Development of Solar Parks and Ultra Mega Solar Power Projects," an official statement said.

The enhanced capacity would ensure setting up of at least 50 solar parks each with a capacity of 500 MW and above in various parts of the country.

Smaller parks in Himalayan and other hilly states, where contiguous land may be difficult to acquire in view of the difficult terrain, will also be considered under the scheme.

3:02 pm Buzzing: Idea Cellular shares gained strength in last hour of trade, up over 2 percent after sources told CNBC-TV18 that the company and Vodafone may be open to sell 15-20 percent stake in merged company to financial investors to reduce debt and infuse cash for operations.

Idea and Vodafone may be looking at ways to cut debt of over Rs 1 lakh crore in merged company. They may own at least 51 percent in merged entity, sources say.

Former Idea MD Sanjeev Aga will lead deal talks with Vodafone.

Reports suggest merger deal announcement is likely on February 24/25.

2:58 pm BEL OFS oversubscribed: Non-retail investors' reserved portion in Bharat Electronics' offer for sale issue is fully oversubscribed.

The government will sale its 5 percent stake in the aerospace and defence company via two-day offer-for-sale that will remain open till February 23, 2017.

The promoter is going to sell up to 1,11,68,139 equity shares at a floor price of Rs 1,498 per share. That will fetch the government around Rs 1,600 crore.

As on December 31, 2016, the government held 74.41 percent stake in the company.

2:56 pm Market Update: Equity benchmarks continued to trade higher amid consolidation, supported by Reliance Industries.

The 30-share BSE Sensex was up 84.11 points at 28845.70 and the 50-share NSE Nifty rose 13.50 points to 8921.35.

However, the market breadth was negative as about 1740 shares declined against 1055 advancing shares on the BSE.

2:52 pm Aviation stocks in action: Jet Airways gained 2.5 percent (on top of 7.4 percent gains in previous session, SpiceJet up 4.47 percent (up 7.11 percent) and InterGlobe Aviation up 0.33 percent (up 1.53 percent).

ICICI Securities analysed the Indian air traffic data for the month of January 2017.

It says passenger load factors (PLF) as well as traffic growth remain high with IndiGo, SpiceJet and Go Air maintaining PLFs at more than 90 percent in the domestic segment and overall domestic passenger growing by 25 percent in January 2017. Higher PLFs has led to widening of the gap between pax (passenger) growth and capacity growth in January 2017, which is one of the structural positive construct in Indian aviation.

PLF driven traffic growth is fundamentally better than capacity driven traffic growth, it feels. According to ICICI Securities, higher PLFs could partially be due to the advance sales which the airlines offered during the demonetisation time period (November-December 2016) and hence could remain elevated in February as well.

However, this also presents an opportunity for airlines to take yield hikes in the current booking window, especially with rising cost pressures, it feels. The research firm has maintained IndiGo as the top buy idea in aviation space.

2:46 pm NPA recovery: Public sector lender Canara Bank has initiated a host of measures to control and manage their NPA and stressed Asset portfolio which in the recent times is posing as a challenge to the entire banking industry.

Various restructuring/rehabilitation options are being extended to mid corporates, large corporates, MSME borrowers and farmers to address the stress in the system.  Bank has been conducting regular recovery camps under settlement schemes for small/marginal farmers and other small borrowers across the Country with the participation of higher level Officers for quick decision for settlement of dues through compromise, the bank said.

The bank has so far declared 475 willful defaulters with an exposure of about Rs 3600cr as per RBI guidelines. Bank is also examining more cases for declaration as Wilful defaulters.

2:41 pm Debt performance: "Though the quantum of corporate debt outstanding has doubled to Rs 106.88 lakh as of December 2016 crore from Rs 45.31 lakh crore on March 2011, the penetration of the corporate debt market remains low in relation to GDP growth," Naresh Takkar, MD & Group CEO, ICRA said.

He further said the corporate debt/GDP has increased by only 2 percent during these six years; that is, from 17.5 percent of GDP in FY 2011 to 19.5 percent in 9MFY2017.

This ratio is significantly lower than in other countries, like China (48 percent) or other smaller economies like Brazil (39 percent), Thailand (48 percent), Malaysia (46 percent) and Singapore (48 percent), reflecting the scope for considerable improvement of issuer and investor participation in the debt markets, it feels.

2:33 PM Reliance hits Rs 1,200-mark: Reliance Industries has hit Rs 1,200-mark for the first time since May 19, 2009, rising more than 10 percent.

2:20 PM Expert speak: Reliance's scrip saw volumes crossing 40 lakh shares in less than half a day, a move reminiscent of its moves at the height the 2008 bull market when it was an investor favourite.

The shares have not performed greatly since but Edelweiss analyst Jal Irani says that a combination of factors, such as the company's capex cycle drawing down as well as the trigger from Jio, means the stock ''is only breaking out'' and has way more room for upside.

In an interview with CNBC-TV18, Irani said that the street has been overly pessimistic about the prospects for Jio and said that the company had introduced plans ''at a very healthy price point''. He added that Jio was only one part of the Reliance share price valuation, and said the company's USD 40 billion investment in oil & gas projects would start to show up in its earnings.

After seeing some likely profit booking in the previous hour, the market moved slightly up. The Nifty still managed to hold on to 8900-mark.

The 30-share Sensex was up 101.80 points at 28863.39, and the Nifty up 17.00 points or 0.19% at 8924.85.

Around 1,119 shares had advanced, while 1,600 shares declined. Meanwhile, 182 shares remained unchanged.

Reliance continued to be the top contributor on the Nifty and contributed close to 48 points.

Meanwhile, Axis Bank and Reliance Industries were the top gainers on the Sensex and Nifty, with gains of around 3 percent and over 9 percent, respectively. Meanwhile, NTPC and Infosys were the top losers on both the indices.

1:50 PM HCL Tech buyback? After Tata Consultancy Services' humongous Rs 16,000-crore share buyback, it could now be the turn of its only large rival from the north -- the Noida-headquartered HCL Technologies -- to undertake a similar exercise.

An official familiar with the development told Moneycontrol the company was open to the idea of a share buyback and was considering it. "We keep looking at options to increase shareholder value. We are open to a share buyback. We will go to the Board once we have decided on it," the official said.

HCL Technologies shareholders will have to approve the buyback proposal once it has gone through the Board.

1:28 PM Buzzing stocks: Shares of IT majors Tata Consultancy Services (TCS) and Infosys fell around 2 percent intraday on Wednesday on buzz of a US-based retail giant's plans to cut outsourcing contracts to Indian firms.

According to a report in Mint, JC Penney plans to reduce its outsourcing projects to companies such as TCS and Infosys. The retail firm is said to be giving business worth billions to Indian IT companies.

Equity benchmarks shed morning gains as investors may have looked to book profits. The Nifty is holding on to its 8900-mark.

The Sensex was up 62 points at 28824, while the Nifty was up 6 points at 8914.

About 1,091 shares had advanced, 1,537 shares declined, and 186 shares had remained unchanged.

Reliance continued to be the top positive contributor on the Nifty.

Meanwhile, Coal India and Reliance were the top gainers on the Sensex and Nifty, with gains of around 2 percent and 9 percent, respectively. IT stocks Infosys and TCS were a drag on the index as they fell around 2 percent.

12:45 pm Economic Affairs Secretary on Rs 1,000 note: The government has no plans to introduce Rs 1,000 notes and the focus is on increasing production of lower denomination currencies, Economic Affairs Secretary Shaktikanta Das said today.

He also said complaints of cash shortages at ATMs are being addressed and requested people to desist from withdrawing more money than they need.

"No plans to introduce Rs 1000 notes. Focus is on production and supply of Rs 500 and lower denomination notes," he tweeted.

"Complaints of cash out in ATMs being addressed. Request everyone to draw the cash they actually require. Overdrawal by some deprives others," he said in another tweet.

12:35 pm Interview: ITD Cementation hopes to grow revenues by 8-10 percent this year with significant improvement in the bottom-line, says Chief Financial Officer, S Ramnath.

Speaking to CNBC-TV18, Ramnath said, currently the order book of the company is around Rs 6,600 crore excluding L1 projects. EBITDA margins are at 9.6 percent for the quarter excluding JV losses.

ITD has an annual target of Rs 6,000 crore on order inflows and expects margins and RoE to improve substantially going forward.

ITD Cementation posted a weak set of numbers for the quarter ended December 2016. It reported a weak topline and also took a hit on the profit after tax (PAT) backed by higher taxation incidence.

12:20 pm Buzzing: Share price of Ramco System added nearly 5 percent intraday as it has secured a multi-million dollar cloud deal.

"The company has secured a multi-million dollar cloud deal (about USD 2.5 million) from Allegis Group Australia Pty for Ramco ERP for Services Resource Planning (SRP), Human Capital Management (HCM) & Payroll to be implemented across 8 countries including India, Singapore, Malaysia, China, Hong Kong, Japan, Australia and New Zealand covering 7000+ employees & contractors," as per company press release .

12:10 pm Axis Bank in action: Axis Bank rallied nearly 3 percent on hopes of merger with other leading bank.

Morgan Stanley feels any interest in Axis Bank will be based on its retail franchise as it is one of the few banks with a strong retail deposit franchise.

Axis has been under pressure for the last 18 months on asset quality front and investors are worried after the last two-quarter surge in bad loans.

12:00 pm Market Check
Reliance Industries helped equity benchmarks extending gains in noon trade. The stock rallied 10 percent, hitting nearly 8-year high after announcements of tariff plans.

Its contribution to benchmarks is nearly 100 percent and its current weightage in the Nifty is 6.01 percent, close to Infosys that has 6.02 percent weightage.

The 30-share BSE Sensex was up 188.01 points or 0.65 percent to 28949.60 and the 50-share NSE Nifty gained 49.25 points or 0.55 percent at 8957.10.

However, the broader markets underperformed benchmarks, trading flat on balanced market breadth.

11:43 am Non-core assets sale: IDBI Bank is going to sell around Rs 5,000 crore worth of stake in its non-core investments in financial year 2018, said MD and CEO, Kishor Kharat. The bank has been working on monetising its non-core assets on an ongoing basis for the last one and a half years, says Kharat.

He did not disclose the names of the assets the bank wishes to sell stakes in. However, he expects the sale to be completed by September 2018.

 IDBI Bank had on Tuesday informed the stock exchanges that it has received an in-principle nod to sell stake in some of its non-core assets.

11:30 am USFDA inspection: Dr Reddy's Labs said it got three Form 483 observations from USFDA, for its Miryalaguda API plant in Telangana.

The company didn't explain the nature of these observations. Miryalaguda plant was one among the three plants for which the company received US drug regulator warning letter in November 2015.

The company said it is addressing the observations raised by USFDA. Miryalaguda plant supplies active ingredients for company's captive consumption as well as for its customers.

11:15 am Buzzing: Shares of Bharat Electronics (BEL) slipped 3.2 percent intraday ahead of dilution of stake by the government through offer for sale.

The government will sale its 5 percent stake in the aerospace and defence company via two-day offer-for-sale that will remain open till February 23, 2017.

The promoter is going to sell up to 1,11,68,139 equity shares at a floor price of Rs 1,498 per share. That will fetch the government around Rs 1,600 crore.

As on December 31, 2016, the government held 74.41 percent stake in the company.

11:00 am Market Check

Equity benchmarks continued its uptrend from the early trade, with Reliance, HDFC Bank, Axis Bank and ITC contributing to the indices' gains. However, TCS, Infosys, HDFC and ICICI capped gains.

The 30-share BSE Sensex was up 137.17 points at 28898.76 while the Nifty gained 37.70 points at 8945.55.

 The market breadth remained positive as about 1248 shares advanced against 1053 declining shares on the BSE.

Axis Bank and Reliance were the top gainers on the Sensex as well as the Nifty, while Infosys, NTPC and Eicher Motors were the top losers.

On sector-specific movements, aviation stocks saw gains. Jet Airways was up around 4 percent, while SpiceJet gained over 5 percent. Interglobe Aviation was up nearly 2 percent.

10:56 am Market check: The Sensex was up 121 points at 28883.38, while the Nifty held on to its 8900-mark and was up 35.25 points. The market breadth was better, with 1,234 shares having advanced, 1,041 shares having declined. Meanwhile, 150 shares remain unchanged.

10:35 am Market Expert: The market continues to inch up relentlessly with support from domestic fund flows, but Saurabh Mukherjea of Ambit Capital is circumspect considering the visible underlying macro weakness.

The Budget was not particularly expansionary, fourth quarter earnings are expected to be weak, and macro indicators suggest a slugging economy with not much momentum in either consumer or capital expenditure, he says. ''It is difficult to say why anyone would chase this market given the lack or macro or earnings momentum,'' he adds.

Heavy flows often create disconnect with valuations, he says, adding, ''Valuations in plenty of pockets don't make sense any more''.

10:15 am Buzzing: Shares of ITD Cementation plunged 10 percent intraday Wednesday on the back of weak numbers declared by the company for the quarter ended December 2016 (Q3).

It has reported 56.8 percent decline in its consolidated Q3 net profit at Rs 13 crore against Rs 30.1 crore, in the same quarter last year.

Total income was down 31.3 percent at Rs 729.9 crore versus Rs 1,063.2 crore.

The company's operating profit (EBITDA) fell 15.2 percent at Rs 55.6 crore, while EBITDA margin was up at 7.6 percent. It has incurred tax expense of Rs 12.6 crore versus Rs 3.2 crore.

10:00 am Market Check: The market remained higher in morning, largely driven by Reliance Industries that hit nearly 8-year high after Reliance Jio offers. However, technology, FMCG and select banking & financials were under pressure.

The 30-share BSE Sensex was up 86.15 points at 28847.74 and the 50-share NSE Nifty gained 24.85 points at 8932.70. About 1112 shares advanced against 906 declining shares on the BSE.

Reliance Industries rallied more than 7 percent, hitting nearly 8-year high as investors cheered the announcements made by chairman Mukesh Ambani for customers of Jio. It was the biggest contributors to the Nifty.

Axis Bank also gained further, up 2.5 percent on hopes of merger with other leading private banks. Tata Motors rose 1 percent after a media report indicated that the company and Volkswagen are in talks for partnership that deal may have huge impact on India, emerging markets.

TCS and Infosys fell 1-1.5 percent as a media report suggested that JC penny will reduce outsourcing of software business to both companies.

9:53 am Goldman on Jio: Goldman Sachs feels top 10 percent of Indian mobile subscribers will likely view Reliance Jio's offers as attractive and these top 10 percent subscribers have an average ARPU (average revenue per user) of Rs 600 and account for 40 percent of industry revenues.

Customer concerns around call failure and likely further cuts from rival telecom companies are key hurdles for Jio, it feels while estimating 50 percent customer retention in FY18.

Goldman expects 50 million customers for Jio in FY18 with pre-tax ARPU of Rs 250 driving wireless revenues of USD 2 billion in FY18.

9:42 am FII View: Mahesh Nandurkar of CLSA says with spot steel, oil and coal prices up 15 percent over FY17 average, investor concerns over FY18 margin outlook is rising.

First of all, rising commodity prices negatively impact only 45 percent of MSCI India, he says.

CLSA research team has built in a YoY consensus 70 bps EBITDA margin compression for FY18 for these companies, which is largely driven by petchem, he feels.

Nandurkar says potential further increase in commodity prices and lack of growth recovery would be a key risk to margins and margin assumptions for select staples, autos, cement and durables could be at risk.

9:25 am Auto finance market: The domestic auto finance market, one of the most developed in Asia with 74 percent penetration and with healthy asset quality of under 1 per cent bad loans, is set to double the asset base to Rs 2.6 trillion by 2020, said a report today.

The domestic auto market, the second largest in Asia, is expected to grow at a CAGR of 13 per cent by value between fiscal 2016 and fiscal 2026 to reach USD 300 billion, said the report by EY, adding by 2020, the vehicle penetration in the country is expected to rise by 50 percent.

This huge growth potential provides an addressable opportunity of over Rs 2.6 trillion by fiscal 2020," said EY India partner and automotive sector leader Rakesh Batra, adding new passenger vehicle financing market stood at Rs 1.6 billion in fiscal 2015.

9:15 am Market Check
Benchmark indices gained further in early trade amid consolidation, with the Nifty opening above 8900 level led by Reliance Industries and Tata Motors.

The 30-share BSE Sensex was up 56.82 points at 28818.41 and the 50-shbare NSE Nifty rose 14.05 points to 8921.90. About 522 shares advanced against 238 declining shares on the BSE.

Tata Motors, BHEL, ONGC, Axis Bank, BPCL and Bharti Infratel were early gainers while GAIL, Hero Motocorp, Tata Steel, Infosys, Wipro, Idea Cellular, Aurobindo Pharma and Eicher Motors were losers.

Reliance Industries shares surged 5 percent, the leading driver for the market today, as Goldman Sachs says top 10 percent of Indian mobile subscribers will likely view Reliance Jio's offers as attractive after the announcement of new tariff plans by Mukesh Ambani, Chairman & Managing Director.

Disclosure: Reliance Industries, the parent company of Reliance Jio, owns Network 18 that publishes Moneycontrol.com.

The Indian rupee opened marginally lower at 66.95 per dollar today against Monday's close of 66.92.

Ashutosh Raina of HDFC Bank says the USD/INR currency pair continues to hover around the 67/dollar level tracking the global risk on sentiment, with gains getting capped by suspected intervention.

He expects the pair to trade in 66.80-67.10/dollar range for today.

Dollar index rose against a basket of currencies, following hawkish comments from Federal Reserve officials, while european political uncertainty also boosted the dollar.

Markets in Asia traded mixed, despite US gains, as investors await policy details from the Trump administration on tax reforms and deregulation.

US stocks rose to fresh record highs on Tuesday, boosted by strong earnings reports from Wal-Mart and Home Depot and continued optimism about the economic agenda of President Donald Trump.