Bulls on rampage: Nifty ends at 8494, Sensex soars 729 points

3:30 pm Market close: The market has ended with some very strong gains. The Sensex was up 728.73 points or 2.7 percent at 28075.55, and the Nifty ended up 216.60 points or 2.6 percent at 8494.15.  About 1693 shares advanced, 1206 shares declined and 322 shares were unchanged.

Banks led the rally with the Bank Nifty hitting a record high. HDFC, SBI, ICICI Bank, Reliance and L&T were top gainers in the Sensex. Among the losers were Hindalco, BHEL, Sesa Sterlite and ONGC.

3:10 pm Acche din aa gaye? Confident that RBI's decision to cut interest rates would give a major fillip to the economy, Chief Economic Advisor Arvind Subramanian today said it signals a shift in the policy stance and direction going forward. "It will provide a fillip to the economy, both directly and indirectly," he said, adding that directly it will increase spending by private sector - both consumers and firms- and indirectly it should help by improving both balance sheets of private sector and banks. It's a really welcome move and consistent with the strong ongoing disinflationary pressures in the economy."

It is a significant move because it signals a shift in the stance and direction of policy going forward," Subramanian added. The Chief Economic Advisor said that the RBI Governor Raghuram Rajan had earlier said he does not want to cut rates and therefore this rate cut is consistent with strong disinflationary pressures. However, any further rate cut will be depend on aggregate demand on economy, he added.

2:50 pm MF exposure to banks:  The mutual fund industry is betting big on banking stocks as its equity exposure to the sector climbed to an all-time high of nearly Rs 73,000 crore in December. This also marks the third consecutive rise in MF industry's exposure to banking stocks. MFs collect funds from various investors for investing in securities such as stocks, bonds, money market instruments and similar assets.

Their investments in banking stocks stood at Rs 72,835 crore as on December 31, 2014, accounting for 21.88 per cent of their total equity assets under management (AUM) of Rs 3.33 lakh crore, according to data available with the Securities and Exchange Board of India (Sebi). The previous high was November this year when investment in the sector surged to Rs 70,575 crore. MFs had been raising their exposure to banking shares since January but their investment level in the sector dropped in September.

2:40 pm Market outlook: Hailing the Reserve Bank's move to pare repo rate by 25 basis points , Raamdeo Agrawal, joint managing director, Motilal Oswal Financial Services, says the cut was imminent for the Indian market due to global deflation and fall in inflation. In an interview to CNBC-TV18, Agrawal says the rate cut will give a momentum to the economy and he sees more rate cuts in the upcoming days. ''But don't try to time the market,'' advises Agrawal who believes that retail investor participation will now increase significantly. ''Though we may not get very large foreign instituitional investor (FII) flows, if we get USD 15 billion from FIIs and a similar figure from domestic instituitional investor (DIIs), then we'll still be very comfortable,'' he adds.

2:36 pm Market check: The Nifty has hit 8500, up 230.30 points or 2.8 percent at 8507.85. The Sensex is up 781.86 points or 2.9 percent at 28128.68. About 1718 shares have advanced, 1069 shares declined, and 320 shares are unchanged.

HDFC is up 6 percent while SBI and ICICI Bank are up 5 percent each.

02:15pm More rate cut possible? Brokerage house Morgan Stanley says a big rate cut cycle is underway, and it sees the RBI cutting interest rates by 125 basis points over the next 12 months.

It sees the RBI cutting the repo rate by 25 basis points more at its monetary policy review on February 3.

''We expect the RBI to front load the rate cuts by potentially taking up a 50bps rate cut in one of the monetary policy meetings after February 3,'' said the Morgan Stanley note to clients, penned by Chetan Ahya and Upasana Chachra.

''Our rate cut forecasts is predicated on our view that CPI inflation will stay at closer to 5% in most of the calendar year 2015, as the reduction in fiscal deficit, sustained deceleration in rural wages and lower global commodity prices will mean that inflationary pressures in the economy will be contained,'' said the note.

02:00pm Market Check
Bulls are in complete control of the street today as the frontline indices rallied 2.5 percent each and the rupee touched two-month high in afternoon trade after the Reserve Bank of India surprised the market with rate cut.

The 30-share BSE Sensex gained 693.94 points at 28040.76 and the 50-share NSE Nifty rallied 206.05 points to 8483.60 while the broader markets underperformed benchmarks. The BSE Midcap and Smallcap indices climbed 1.5 percent and 1.2 percent, respectively.

About 1627 shares have advanced, 1095 shares declined, and 327 shares are unchanged on the Bombay Stock Exchange.
 
The Reserve Bank of India slashed repo rate by 25 basis points to 7.75 percent and left cash reserve ratio unchanged at 4 percent ahead of its February policy meeting.

BSE Realty Index topped the buying list among sectoral indices, up 8 percent followed by Bankex with 3.5 percent upside. HDFC, ICICI Bank, L&T, SBI and M&M rallied 4-6 percent.

Meanwhile, the Indian rupee jumped to 61.48 a dollar, the highest level since November 2013. The currency appreciated by 65 paise to 61.52 a dollar.

Telecom Regulatory Authority of India (TRAI) has rejected Department of Telecommunications' proposal for higher 3G price of Rs 3,899 crore and reiterated its old stance on 3G spectrum price. Bharti Airtel and Idea Cellular gained more than a percent while Reliance Communications and Tata Teleservices climbed nearly 4 percent.

In the broader space, Atul surged 7 percent as US FDA has approved its Dapsone manufacturing facility in Valsad, Gujarat.

1:50 pm Bullish stance: Shares of Maruti Suzuki hit record high at Rs 3616.40, up 3 percent intraday. Bank of America Merrill Lynch has raised target price on the auto major to Rs 4100 per share, indicating a 9 percent upside. The brokerage expects Maruti to register 34 percent earnings per share (EPS) CAGR despite lowering earnings forecasts by 6 percent in FY16 and 2 percent in FY17.

"The target price is still premium over past trends due to superior growth on much larger addressable opportunity (including UVs, LCVs) and higher return ratios on account of more liberal dividend payout policy," says the brokerage. It also further adds that that four-wheeler manufacturer will continue gaining share due to better franchise, extensive reach and launches, including foray in segments absent so far.

1:30 pm  Buzzing: Shares of PC Jeweller rallied 10.7 percent intraday after the government allowed the company to directly import precious metals for domestic business. The move would help the company to reduce its cost to buy precious metals, PC Jeweller Managing Director Balram Garg said. In a filing to the BSE, PC Jeweller informed that the "company, has been designated as Nominated Agency under Paragraph 4A.4 of Foreign Trade Policy 2009-14 (RE-2012), by the Additional Director General of Foreign Trade (CLA), Ministry of Commerce & Industry, Department of Commerce."

"This permission makes the company eligible for direct import of precious metals (gold/silver/platinum) for domestic business," it added.

1:20 pm Earnings: Bajaj Auto's net profit fell 4.8 percent year-on-year to Rs 861.2 crore on revenue of Rs 5,657 crore for the quarter ended December 2014. Profit of the two-wheeler maker was supported by better operational performance but was impacted by lower other income.

However, numbers were ahead of street expectations. According to the average of estimates of analysts polled by CNBC-TV18, profit was expected at Rs 850 crore on total income of Rs 5,591 crore for the quarter.

Total income from operations during the quarter grew by 10.3 percent to Rs 5,657 crore compared to Rs 5,131 crore in same quarter last fiscal, supported by higher export sales. Other income more than halved to Rs 95.3 crore from Rs 222 crore during the same period.

The market continues to surge supported by banks, auto and realty stocks. The
Sensex is up 665.49 points or 2 percent at 28012.31 and the Nifty is up 199.75 points or 2.4 percent at 8477.30. About 1596 shares have advanced, 1005 shares declined, and 341 shares are unchanged.

HDFC, ICICI Bank, SBI, M&M and Tata Power are top gainers in the Sensex. Bajaj Auto is up 3 percent after it posted better-than-expected December quarter results.

Crude oil dipped after a volatile session the previous day, when prices rebounded sharply from near-six-year lows that reflected a global oversupply.Jefferies said the use of floating storage would, in the near term, absorb barrels from the market in excess of physical demand, but noted that "those same barrels will eventually be delivered and could moderate a future price recovery".

12:50pm Market Update
The Sensex reclaimed 28000-mark in afternoon trade, up 673.74 points or 2.46 percent at 28020.56. The Nifty is inching towards 8500 level, up 200.10 points or 2.42 percent at 8477.65.

About 1595 shares have advanced, 991 shares declined, and 326 shares are unchanged on the Bombay Stock Exchange.

12:40pm Gainers & Losers
India's largest private sector lender ICICI Bank and housing finance company HDFC topped the buying list on Sensex, up 4.5 percent each. Rivals State Bank of India and Axis Bank rallied 3.7 percent each followed by HDFC Bank with 2 percent upside.

Utility vehicle maker Mahindra & Mahindra and power producer Tata Power climbed 3.7 percent each. Shares of ITC, TCS, Reliance Industries, L&T, Tata Motors, Maruti Suzuki and Wipro surged 2-2.8 percent. However, HUL was the only loser, falling 0.5 percent.

12:25pm DB Corp in focus
DB Corp matched street expectations on Thursday by reporting a 11.2 percent growth in consolidated net profit at Rs 105.1 crore for the quarter ended December 2014. Profit in the year-ago period was Rs 94.5 crore.

PAT growth was supported by operating profit but was impacted by lower other income and higher tax & finance cost.

Consolidated total income of the print media company grew by 7 percent to Rs 554.6 crore during October-December quarter from Rs 518.2 crore in the year-ago period. Total expenses increased to Rs 392.2 crore from Rs 379.2 crore during the same period.

Operating profit (EBITDA) shot up 19.4 percent year-on-year to Rs 185 crore and margin expanded by 340 basis points to 33.3 percent in the quarter gone by.

12:00pm Market Check
The market extended rally in noon trade after the RBI surprised with a 25 basis points repo rate cut. Frontline indices gained more than 2 percent each led by gains in the Bank Nifty that hit a record high and gains in other rate sensitives. CNX Midcap index rallied to an all time high.

The Sensex climbed 601.35 points to 27948.17 and the Nifty shot up 178.95 points to 8456.50. About two shares advanced for every share declining on the Bombay Stock Exchange.

The Reserve Bank of India slashed repo rate by 25 basis points to 7.75 percent and kept the cash reserve ratio unchanged at 4 percent. Governor Raghuram Rajan says, inflation is likely to be below 6 percent by January 2016. Finance Minister, Arun Jaitley welcomed the move, saying says rate cut will lead to more money in hands of consumers.

Industry and experts cheered RBI's move. Chief economic advisor, Arvind Subramaniam says the RBI's move is consistent with strong disinflationary pressures and the rate cut indicated a shift in policy stance going forward. However, he adds that further rate cuts will depend on the state of the economy.

Bankers say they will take a look at base rate cuts. SBI says a rate cut will mean better demand and bond portfolio gains. IDFC's Rajiv Lall says sentiment is most important thing and DLF echoes a similar tone, saying 25 basis points rate cut is not a game changer, but clearly indicates a change in sentiment.

In the earnings today, Bajaj Auto will release its third quarter numbers. A CNBC-TV18 poll expects revenue to grow 9 percent year-on-year and profit fall by 6 percent Y-o-Y. TCS numbers are also expected post market hours. Analysts expect a muted quarter and the street is working with a dollar revenue growth of 0.3 percent.

11:50 am Rupee check: The rupee spurted 43 paise to trade at a fresh one-month high of 61.75 against the dollar as the RBI cut interest rates by 25 bps to 7.75 per cent.

After opening strong at 61.72 at the Interbank Foreign Exchange market, the domestic unit hovered in the range of 61.71 and 62.19 in the morning trade.

Forex dealers said a strong domestic equity market and dollar's weakness against other Asian currencies also supported the rupee.

11:40 am Poll: Bajaj Auto 's third quarter profit is expected to fall 6 percent to Rs 850 crore for the quarter ended December 2014, according to the average of estimates of analysts polled by CNBC-TV18. Profit in the year-ago quarter was Rs 904 crore. The company will announce its earnings on Thursday. The two-wheeler maker's revenue may jump 9 percent to Rs 5,591 crore during October-December quarter compared to Rs 5,131.2 crore in same quarter last fiscal, supported by higher export sales volumes. Big decline in domestic motorcycle sales has been continued but year-on-year growth in both exports and 3 wheelers has been strong. Domestic motorcycle sales fell 13.5 percent on yearly basis to 4.94 lakh units. Even domestic motorcycle market share dropped significantly to 12 percent in H1FY15 from 14 percent in FY14 and 19 percent in FY10.

11:30 am Market outlook:  Hailing the Reserve Bank's move to pare repo rate by 25 basis points, Raamdeo Agrawal, joint managing director, Motilal Oswal Financial Services, says the cut was imminent for the Indian market due to global deflation and fall in inflation.

In an interview to CNBC-TV18, Agrawal says the rate cut will give a momentum to the economy and he sees more rate cuts in the upcoming days.

''But don't try to time the market,'' advises Agrawal who believes that retail investor participation will now increase significantly.

''Though we may not get very large foreign instituitional investor (FII) flows, if we get USD 15 billion from FIIs and a similar figure from domestic instituitional investor (DIIs), then we'll still be very comfortable,'' he adds.

The stellar rally on Dalal Street continues. The Sensex is up 494.69 points or 1.8 percent at 27841.5 and the Nifty is up 144.10 points or 1.7 percent at 8421.65. About 1523 shares have advanced, 717 shares declined, and 311 shares are unchanged.

The market welcomes the move with the Nifty capturing 8400 last seen on January 5, led by gains in the Bank Nifty that hit a record high. Midcap index also touched an all time high.

Industry and experts welcome the move. The chief economic advisor Dr Arvind Subramaniam says there has been a shift in dis-inflationary pressures and quantum or rate cuts and time will be determined by data.

ICICI Bank, HDFC, SBI, Tata Power and M&M are top gainers in the Sensex while GAIL, Tata Steel and Sesa Sterlite.

Oil prices fell in Asia today after a bargain-buying rally the day before lost steam, with a pick-up in US inventories reinforcing reinforcing concerns about weak demand and a supply glut. US benchmark West Texas Intermediate (WTI) for delivery in February fell 37 cents to USD 48.11 in late-morning trade and Brent crude for February fell 56 cents to USD 48.13. Both contracts rose sharply yesterday -- WTI gained USD 2.59 and Brent advanced USD 2.10 -- as bargain hunters moved in after prices tumbled close to six-year lows.

Analysts say the market remains hobbled by weak fundamentals, notably weaker demand and an oversupply of the commodity as the world's major oil producers have vowed to maintain production levels.

10:56am TCS to announce earnings today
Tata Consultancy Services (TCS), the biggest software services exporter in India, will announce its third quarter earnings on Thursday. Profit after tax of the company is expected to increase 3.9 percent sequentially to Rs 5,496 crore on revenue of Rs 24,498 crore for the quarter, according to the average of estimates of analysts polled by CNBC-TV18.

The growth in bottomline may be mainly due to other income, say analysts, who expect 2.9 percent quarter-on-quarter growth in rupee revenue, and 0.5 percent rise in dollar revenue at USD 3.948 billion (In Q3FY14, dollar revenue growth was 3 percent).

Dollar revenue growth in constant currency is seen at 2.5 percent in December quarter compared to 2.9 percent growth in constant currency in same quarter last fiscal.

Overall, December quarter is expected to be a muted one which is already priced in, feel analysts. According to them, the key factor to watch out for will be FY16 outlook.

10:45am Indian staples expensive, say expert
Sakthi Siva, Credit Suisse says there are two arguments commonly cited by investors to suggest staples are the biggest beneficiary of falling commodity prices. "One, commodities are a big input cost and falling commodity prices improve margins. Two, falling commodity prices improve real disposable incomes and help boost volumes for consumer goods particularly Staples," he explained.

"While the arguments are valid, our question is where are the EPS upgrades? While Hindustan Unilever has seen upgrades of 2 percent to 2015e consensus EPS since the lows in July, Staples in India are trading at their highest-ever valuation - a premium of 554 percent to the region," says Siva.

10:25am PC Jeweller in News
Leading jewellery firm PC Jeweller today said the government has designated the company as nominated agency for direct import of precious metals to be used for domestic business.

The move would help the company to reduce its cost to buy precious metals, P C Jeweller Managing Director Balram Garg said.

In a filing to the BSE, PC Jeweller informed that the "company, has been designated as Nominated Agency under Paragraph 4A.4 of Foreign Trade Policy 2009-14 (RE-2012), by the Additional Director General of Foreign Trade (CLA), Ministry of Commerce & Industry, Department of Commerce."

"This permission makes the company eligible for direct import of Precious Metals (gold/silver/platinum) for domestic business," it added.

When contacted, Garg said: "We were buying precious metals from banks as only nominated agencies are allowed to import directly for domestic business. Now we are allowed to import directly from foreign suppliers". He noted that the company's would save on the margins paid to banks for buying precious metals, reports PTI.

10:15am Nomura on RBI rate cut
The Reserve Bank of India's decision today to cut the repo rate – the rate at which it lends to banks – by 25 basis points, or 0.25 percent, ''is a surprise'' as the market was anticipating monetary policy action after the Budget, Nomura India MD – Fixed Income Neeraj Gambhir told CNBC-TV18.

The central bank cut interest rates today, about 20 days before it meets for its bi-monthly policy review, and said that it expects inflation to be lower than the 6 percent it is targeting for January next year, judging from its steep fall recently.

Inflation, as measured by the consumer price index basket, has fallen from a peak of 11.16 percent in November 2013 to 5 percent in December 2014, thanks to the recent fall in international crude prices and economic activity slowed during the recent downturn.

''Inflation is clearly on a path lower than what the central bank had envisaged,'' Gambhir said, adding that while he earlier expected it to slash rates by a total of 50 basis points (0.5 percent) this year, that thesis may now need to be revisited. ''This is a switch in the regime. The RBI has now moved away from managing inflation to boosting growth.''

10:00am Market Check
Equity benchmarks maintained uptrend by rising 1.6 percent in morning trade as Reserve Bank of India slashed repo rate by 25 basis points to 7.75 percent ahead of its February policy. Banking & financials, realty, auto and capital goods stocks gained strength.

The 30-share BSE Sensex climbed 439.07 points to 27785.89 and the 50-share NSE Nifty Nifty jumped 133.30 points to 8410.85. More than 3 shares advanced for every share declining on the Bombay Stock Exchange.

Bank Nifty touched fresh record high of 19,410.40 intraday today, up 533.85 points or 2.87 percent to 19,137.65 as ICICI Bank, HDFC Bank, State Bank of India and Axis Bank rallied 2-4 percent.

Shares of ITC, Larsen & Toubro, Reliance Industries, Mahindra & Mahindra, WIpro, Maruti Suzuki, Bharti Airtel, Hero Motocorp, Bajaj Auto, Tata Power, Cipla and Coal India gained 1-2.7 percent. However, Tata Steel, GAIL and HUL were under pressure.
 
The Indian rupee appreciated by 38 paise to 61.80 a dollar post RBI rate cut.

Globally, Asian markets were mixed with the Shanghai and Nikkei rising 1 percent each. In commodities, Brent crude fell 0.94 percent to USD 48.23 a barrel, recovering from its six-year low of around USD 45 a barrel. US crude was down 0.7 percent to USD 48.14 a barrel.

9:50 am: The finance ministry welcomed an inter-meeting rate cut by Reserve Bank of India (RBI), saying it reflected easing inflation concerns and vindicated the government's efforts to achieve economic growth without inflation.

Deputy Finance Minister Jayant Sinha also told Reuters that the quarter-point rate cut would mark an "inflection point" after a period of high interest rates.

9:40 am Result poll: Tata Consultancy Services (TCS), the biggest software services exporter in India, will announce its third quarter earnings on Thursday. Profit after tax of the company is expected to increase 3.9 percent sequentially to Rs 5,496 crore on revenue of Rs 24,498 crore for the quarter, according to the average of estimates of analysts polled by CNBC-TV18. The growth in bottomline may be mainly due to other income, say analysts, who expect 2.9 percent quarter-on-quarter growth in rupee revenue, and 0.5 percent rise in dollar revenue at USD 3.948 billion (In Q3FY14, dollar revenue growth was 3 percent).

Dollar revenue growth in constant currency is seen at 2.5 percent in December quarter compared to 2.9 percent growth in constant currency in same quarter last fiscal.

9:30 am Reaction to RBI move: JP Morgan's India economist Sajjid Chnoy feels the 6 percent inflation target of RBI is no longer in danger given the steep fall in global commodity prices, and back home, the decline in food prices. ''The RBI will be data dependent; they will want real rates to fall below a certain level to keep a healthy rate of return,'' he said in an interview to CNBC-TV18. Chinoy said the Budget now held the key to further rate cuts by the RBI.

"The RBI will want to wait for the Budget. The FY15 numbers are baked in the cake, there is little the government can do given the revenue numbers," he said. "I think what the RBI will watch is what the FY16 Budget will look like? What is the medium term plan for consolidation, how will the government achieve that? We are looking at some cuts in March and April if these conditions are met," he said.

The market is celebrating RBI's surprise rate cut in style. The Sensex is up 566.65 points or 2 percent at 27913.47, after gaining almost 600 points in opening. The Nifty is up 147.65 points or 1.7 percent at 8425.20. About 574 shares have advanced, 84 shares declined, and 228 shares are unchanged.

All banks are up while SBI gained 5 percent. ICICI Bank, HDFC, Axis Bank and HDFC Bank are top gainers while Hindalco and GAIL are among the losers in the Sensex.

The Reserve Bank of India surprised the market by cutting repo rate by 25 basis points to 7.75 percent from 8 percent, with immediate effect, ahead of its policy review on February 3.

The Indian rupee gained 30 paise in the early trade. It has opened at 61.88 per dollar versus 62.18 Wednesday.

The dollar nurses losses, having retreated across the board after a surprisingly big fall in US retail sales pulled US yields sharply lower. Mohan Shenoi of Kotak Mahindra Bank said, "Global markets are swinging between risk-on and risk-off based on US data and growth/deflation scare. The dollar is showing mixed trends by holding stable against Euro while mildly losing ground to Yen and GBP. The USD-INR is expected to trade in a range of 62-62.30/dollar today."

US markets saw a decline for the fourth straight day as December retail sales failed to meet expectations. The US 10-year treasury yield fell 6 basis points to 1.84 percent.
European markets too closed with sharp losses. The FTSE was down 2.4 percent and CAC down 1.6 percent.

Asian markets are mixed in morning trade. Japan's core machinery orders increased by a smaller-than-expected 1.3 percent for the month of November and the reading is significantly lower than a 5.0 percent rise forecast but an improvement from a 6.4 percent decline in October.

In commodities, crude prices surge, posting biggest one-day percentage gain in more than two years. Brent surges over 3 percent to trade above USD 48 dollars per barrel. And precious metal gold gain to USD 1230 an ounce but a rout in other commodities put some pressure on the metal.