Nifty ends above 8700 for 1st time; HUL up 5%, ITC tanks 5%

The market gained for the fifth consecutive session on Wednesday by taking consistent support from stocks like HDFC, Infosys, HUL and SBI. However, the fall in ITC post Q3 earnings capped the gains.

The 50-share NSE Nifty closed above the 8700-mark for the first time ever, up 33.90 points or 0.39 percent at 8729.50.

The 30-share BSE Sensex hit an intraday high of 28958.10, before closing at 28888.86, up 104.19 points. Benchmarks gained 452 points and 1542 points in the five consecutive sessions, respectively.

Gaurav Mehta, Ambit says having found strong support on multiple occasions at the lower end of the all-important channel that has defined Nifty's upmove over the past twelve months, the uptrend in the index has been reinforced.

''We look for upside targets near the 9000 mark over the next few weeks,'' he adds.

Meanwhile, Adrian Mowat of JP Morgan says investors need to see growth for the India story to continue. He sees 15 percent earnigns growth in FY16 and higher rating for India as interest rates are cut.

Asian markets (except Nikkei) also closed higher today. Shanghai rallied 4.74 percent and Hang Seng gained 1.7 percent. However, European markets were mixed ahead of ahead of the European Central Bank policy meeting on Thursday. France's CAC and Germany's DAX were marginally down while Britain's FTSE rose 0.6 percent at the time of closing of Indian equities.

Back home, the biggest contributor to the gains of benchmark indices was HDFC again. The stock surged 2.7 percent today in addition to 6 percent upside in previous session.

FMCG majors moved in opposite direction today. Hindustan Unilever saw huge buying interest in last hour of trade, up 5 percent. However, ITC tanked 5 percent after its Q3 earnings missed on all counts. It reported slow growth in cigarette business, the major contributor to its revenues.

Cigarettes revenue rose just 0.6 percent year-on-year to Rs 4,142 crore dented by price hikes, excise duty and recent increase in the VAT rate in key states (Tamil Nadu, Kerela, Assam). Religare said cigarette volumes for the quarter declined by around 12-13 percent, according to the management. Profit grew 10.5 percent (against forecast of 12.6 percent), boosted by higher other income.

Coal India gained 2 percent after the coal secretary Anil Swarup said the government is in a position to complete coal block allotment by February 28 as entities have surrendered existing coal linkages. The government will notify allotment of 36 coal blocks tomorrow (Thursday) while the list of 16 coal blocks which would be allotted to government companies has already been put on the its website. A total of 46 coal blocks are scheduled to go for auction next month.

Among others, Infosys, State Bank of India, Bharti Airtel, Larsen & Toubro and Sun Pharma rallied 1-4 percent. However, Tata Motors, ONGC, Cipla, Sesa Sterlite and Tata Steel declined 1-2 percent.

Zee Entertainment fell 2 percent. Profit surged 44.5 percent year-on-year to Rs 308.6 crore and revenues rose 14.8 percent to Rs 1,364 crore in the quarter ended December 2014.

The broader markets underperformed benchmarks again. The BSE Midcap and Smallcap indices declined 0.2 percent each. Declining shares outnumbered advancing ones by a ratio of 1718 to 1233 on the Bombay Stock Exchange.

03:30pm Market Closing
The market closed higher for the fourth consecutive session on Wednesday. The 30-share BSE Sensex rose 104.19 points to 28888.86 while the 50-share NSE Nifty closed above the 8700 level for the first time, up 33.90 points or 0.39 percent at 8729.50.

About 1236 shares have advanced, 1710 shares declined, and 261 shares are unchanged on the BSE.

HUL topped the buying list on Sensex, up 5.09 percent whereas ITC was the biggest loser, down 5 percent post disappointing volume growth in cigarettes business.

Bharti Airtel, Bank of Baroda, HDFC, PNB, Coal India, SBI and Infosys gained 2-4 percent whereas Cipla, Sesa Sterlite, Tata Steel, ONGC, Zee Entertainment and NMDC fell 1-3 percent.

3:15pm Mcleod Russel falls 4%
Mcleod Russel's October-December quarter (Q3FY15) net profit slipped 37.5 percent to Rs 80.4 crore from Rs 128.6 crore, Y-o-Y.

The company's total income was up 1 percent at Rs 481 crore against Rs 476 crore, Y-o-Y.

EBITDA of the company was down 25.7 percent to Rs 107 crore against Rs 144 crore and  operating profit margin was tanked 810 basis points to 22.2 percent versus 30.3 percent on yearly basis.

2:50 pm Interview: The reserve fee for radio frequency is likely to see a marginal hike in the phase III auctions, says Prashant Panday, managing director, Entertainment Network India Limited (ENIL). ENIL operates the Radio Mirchi brand in Mumbai and has a large pan India presence with 32 stations across 14 states. In an interview to CNBC-TV18, Panday says the bidding for the phase III spectrum acution is likely to be very aggressive due to limited frequencies being available.

''Delhi has only one frequency. Mumbai, fortunately has two frequencies on the table, so the metros are expected to see high bidding,'' he adds.

2:30 pm Coal mine: The government has answered over 300 querries received for the February auction of coal mines deallocated by Supreme Court in September last year. Speaking to the press, coal secretary Anil Swarup said the government is in a position to complete allotment by February 28 as entities have surrendered existing coal linkages. The government will notify allotment of 36 coal blocks tomorrow (Thursday) while the list of 16 coal blocks which would be allotted to government companies has already been put on the its website. A total of 46 coal blocks are scheduled to go for auction next month.

The market is consolidating with the Nifty holding the 8700-mark comfortably. The 50-share index is up 29.15 points at 8724.75. The Sensex is up 101.18 points at 28885.85. About 1139 shares have advanced, 1733 shares declined, and 270 shares are unchanged.

HUL is up 4 percent while Bharti, HDFC, SBI and Infosys are gainers while ITC is down 5 percent followed by Sesa Sterlite, Cipla, ONGC and Tata Steel.

Finance Minister Arun Jaitley will present his first full-year Budget on February 28 for the fiscal year FY16, a government official said. February 28 is a Saturday. The parliament session will begin on February 23 and will continue till March 20, the official, who declined to be named, told reporters. The new fiscal year begins on April 1.

Asian shares hit a six-week high as investors counted on the European Central Bank to unveil a stimulus drive at its meeting on Thursday.

Overseas investors bought shares worth a net Rs 1278 crore on Tuesday, provisional exchange data showed, buying for a fourth consecutive session. Foreign investors have bought a net USD 518.5 million in Indian shares so far this year, exchange and regulatory data showed.

Interest rate-sensitive stocks gained after the Reserve Bank of India's surprise rate cut last week raised expectations of the start of a monetary easing cycle.

2:00 pm Budget: Finance Minister Arun Jaitely will present his first full -year Budget on February 28, Saturday, for FY16, a government official said Wednesday. The Budget session of Parliament will begin from February 23 and will continue till March 20.

Moreover, the Railway Budget and Economic Survey will be presented on February 26 and 27, respectively.

1:55 pm There can be sizeable job creation even without large capex spends, says Adrian Mowat of JP Morgan. He says the government needs to improve the business environment and that itself will encourage many companies to add to their workforce. In an interview with CNBC-TV18, Mowat said things are improving on the macro front, but in absolute terms, the pace is still not satisfying. On the Budget, Mowat feels the government should not be worried about a higher fiscal deficit, and should instead concentrate on narrowing revenue deficit.

''Let's have a bigger fiscal deficit, but a lesser revenue deficit,'' Mowat said, adding that the government should borrow more now that interest rates were cooling, and also because of weak crude prices. ''Borrow more, but spend wisely; invest in infrastructure,'' Mowat said.

1:30 pm Exclusive interview: As mandated by the Union finance ministry, Securities and Exchange Board of India (SEBI) has been seeking to invest a chunk of the Employees' Provident Fund Organisation (EPFO) corpus into Indian equities. Speaking about it, SEBI chairman UK Sinha there is lost of interest in Indian corporate bonds and the government where must work to bring in liquidity. Noticing a lot on enthusiasm from foreign players in corporate bonds, Sinha said the sector requires a lot of reforms. To begin with Foreign Portfolio Investment limits in corporate bonds must be enhanced. He also said the government must look at boosting retail investor participation in corporate bond market.

The market is still holding on to its gains. The Sensex is up 85.98 points at 28870.65 and the Nifty is up 18.85 points at 8714.45. About 1116 shares have advanced, 1645 shares declined, and 261 shares are unchanged.

Bharti Airtel, HDFC, SBI, HUL and L&T are top gainers in the Sensex. Among the losers are Sesa Sterlite, Cipla, ONGC and Hindalco.

ITC tanked 4 percent after it announced December quarter earnings. Cigarette-hotel-to-FMCG major missed street expectations on topline as well as bottomline front in the third quarter. Profit grew 10.5 percent year-on-year to Rs 2,635 crore as against expected growth of 12.6 percent. Other income

Net sales rose 2.5 percent to Rs 8,942 crore in the quarter ended December 2014 from Rs 8,727 crore in the year-ago period. According to the average of estimates of analysts polled by CNBC-TV18, revenue was expected at Rs 9,744 crore, up 11.7 percent.

The slow growth in cigarette business impacted overall revenue growth of the company during the quarter. Cigarettes revenue rose 0.6 percent year-on-year to Rs 4,142 crore due to price hikes in 2014.

The market continued its gains into the fifth consecutive session especially after yesterday's strong run. The 50-share NSE Nifty traded comfortably above 8700, up 24.20 points at 8719.80.

The 30-share BSE Sensex climbed 122.25 points to 28906.92 whereas the broader markets underperformed benchmarks with the BSE Midcap and Smallcap indices falling 0.3 percent each. About 1116 shares have advanced while 1496 shares declined on the Bombay Stock Exchange.

Adrian Mowat of JP Morgan says investors need to see growth for the India story to continue. He sees 15 percent earnings growth in FY16 and higher rating for India as interest rates are cut.

Mowat wants the Budget to have lower revenue deficit on account of lower subsidies but is okay with a higher fiscal deficit if it is spent on infrastructure.

Shares of HDFC, Larsen & Toubro, State Bank of India, Hindustan Unilever and Bharti Airtel topped the buying list on Sensex, up 2-3.5 percent. However, Tata Motors, ONGC, Cipla, Wipro, Sesa Sterlite, Hindalco Industries and Tata Steel declined 1-2 percent.

ITC fell nearly 2 percent ahead of Q3 earnings. Analysts expect numbers this quarter to be capped at 12-13 percent against a historical range of 15-20 percent. A CNBC-TV18 poll is estimating sales growth of 11.7 percent and profit growth of a little over 12 percent.

Globally, Japan's  Nikkei widened losses as the Bank of Japan maintained its monetary stimulus of 80 trillion yen per year. FY15 GDP estimates, however, were reduced by the central bank to a decline of 0.5 percent against a growth of 0.5 percent estimated earlier in October. Brent crude traded around USD 48 a barrel while gold traded at 5-month high.

11:30 am Rate cut? With the unexpected cut in repo rate, there are murmurs that RBI's monetary easing stance is likley to continue. V Srinivasan executive Director, Corporate Banking at Axis Bank says the stance will be maintained for next 6-8 quarters with policy rates nearing 7 percent in next 3-4 quarters.

Speaking to CNBC-TV18, Srinivasan says bond yields will soften by 50-77 bps, but deposit rates can't match the fall. Despite RBI notification on Monday, banks have not been able to lower deposit rates or base rate, which was expected post the policy rate cut. 'Base rate cut will depend on deposit rate behaviour," Srinivasan said while speaking to Adrian Mowat, JP Morgan's Chief Asian & Emerging Equity Strategist on CNBC-TV18.

The market is gradually giving away its gains as the Nifty slips below the 8700-mark. The 50-share index is up 3.60 points at 8699.20 and the Sensex is up 36.98 points at 28821.65. About 1063 shares have advanced, 1375 shares declined, and 253 shares are unchanged.

Bank Nifty continues its outperformance, CLSA in its latest report say credit-rating action shows early signs of recovery as the upgrade/downgrade ratio based on the three leading agencies reached 1.8x in 2014, the highest in four years. They expect banks' asset quality to improve further in 2015 as stronger economic growth and lower input costs boost corporate profitability.

Bharti Airtel, SBI, HDFC, Maruti and HUL are top gainers while Sesa Sterlite, Hindalco, Tata Motors, Tata Steel and Cipla are among the losers in the Sensex.

Globally, Japanese markets widen losses. The Bank of Japan maintained its monetary stimulus. FY15 GDP estimates, however, were reduced to a decline of 0.5 percent versus a growth of 0.5 percent estimated earlier in October. Brent trades around USD 48 per barrel while gold trades at 5-month highs.

10:50am Brent Crude Update
Oil prices edged up today in a further sign of support around current levels, but analysts fretted that the outlook for the next six months remained bleak due to oversupply.

Oil fell as much as 5 percent on Tuesday after the International Monetary Fund cut its 2015 global economic forecast and key producer Iran hinted prices could drop to USD 25 a barrel without supportive OPEC action.

Prices stabilised on Wednesday, with traders pointing to buying this week whenever benchmark Brent crude oil LCOc1 dropped towards USD 48 a barrel.

Brent was trading at USD 48.44 a barrel at 0413 GMT, up 45 cents from its last settlement, while US crude CLc1 was up 48 cents at USD 46.95 a barrel.

But analysts said they expected low prices to continue for the next half-year, reports Reuters.

10:25am FII View
There can be sizeable job creation even without large capex spends, says Adrian Mowat of JP Morgan. He says the government needs to improve the business environment and that itself will encourage many companies to add to their workforce.

In an interview with CNBC-TV18, Mowat said things are improving on the macro front, but in absolute terms, the pace is still not satisfying.

On the Budget, Mowat feels the government should not be worried about a higher fiscal deficit, and should instead concentrate on narrowing revenue deficit.

''Let's have a bigger fiscal deficit, but a lesser revenue deficit,'' Mowat said, adding that the government should borrow more now that interest rates were cooling, and also because of weak crude prices.

''Borrow more, but spend wisely; invest in infrastructure,'' Mowat said.

10:00am Market Check
Equity benchmarks extended gains for the fifth consecutive session today as the Sensex is inching towards 29000 supported by banking & financials and select technology stocks.

The index climbed 153.45 points or 0.53 percent to 28938.12 and the Nifty rose 41.60 points to 8737.20. The broader markets gained half a percent too. Two shares advanced for every share declining on the Bombay Stock Exchange.

Gaurav Mehta, Ambit says having found strong support on multiple occasions at the lower end of the all-important channel that has defined Nifty's upmove over the past twelve months, the uptrend in the index has been reinforced.

''We look for upside targets near the 9000 mark over the next few weeks,'' he adds.

Housing finance company HDFC rallied another 3 percent today, in addition to 6 percent gains seen yesterday. Public sector lender State Bank of India jumped over 2 percent while its rivals ICICI Bank and HDFC Bank gained 0.5 percent each.

Larsen & Toubro, Maruti Suzuki, Bharti Airtel and Bajaj Auto advanced 1-1.5 percent whereas Tata Motors and Sesa Sterlite lost 1-2 percent on profit booking. Reliance Industries and ONGC declined half a percent each.

ITC erased early gains, falling 0.2 percent ahead of Q3 earnings. A CNBC-TV18 poll expects 12.6 percent growth in profit at Rs 2,686 crore and 11.7 percent growth in revenue at Rs 9,744 crore for the quarter.

9:50 am Sale: Wind turbine maker Suzlon is close to selling off its wholly owned German subsidiary Senvion in a move to pare its debt.

The company's board met on Tuesday to discuss its debt reduction strategy and is in the process of implementing Rs 9500 crore corporate debt restructuring (CDR) plan.

The company is aiming to retire its debt by Rs 4000 crore by FY15-end.

9:40 am Market outlook: Gaurav Mehta, Ambit says having found strong support on multiple occasions at the lower end of the all-important channel that has defined Nifty's upmove over the past twelve months, the uptrend in the index has been reinforced.

''We look for upside targets near the 9000 mark over the next few weeks. On stocks, we recommend buys on Cipla , IndusInd Bank , TCS ,  Coal India and  Alstom India while recommending going short on HPCL ,'' he adds.

9:30 am Poll: Cigarette-hotel-to-FMCG major ITC 's third quarter profit is expected to rise 12.6 percent year-on-year to Rs 2,686 crore, according to the average of estimates of analysts polled by CNBC-TV18. Net sales are seen going up 11.7 percent to Rs 9,744 crore in the quarter ended December 2014 compared to Rs 8,727 crore in same quarter last year.

Analysts feel overall earnings growth is likely to be soft during the quarter. Profit growth has been capped at just 12-13 percent against company's historic range of 15-20 percent. According to them, the full impact of a third consecutive year of price hikes (in cigarettes business) may hit volumes in the quarter.

They expect margin expansion across all segments except hotels and paperboards/packaging. Operating profit may rise 12.8 percent on yearly basis to Rs 3,706 crore driven by cigarettes, FMCG and agri businesses. Operating profit margin may expand 40 basis points to 38 percent in the quarter gone by.

After a stellar performance, the market has opened higher. The Sensex is up 93.46 points at 28878.13 and the Nifty is up 24.05 points at 8719.65. About 501 shares have advanced, 148 shares declined, and 199 shares are unchanged.

Sesa Sterlite, M&M, Tata Steel, Cipla and HDFC Bank are top gainers in the Sensex.

The Indian rupee opened flat at 61.68 per dollar versus 61.69 Tuesday.

Pramit Brahmbhatt of Veracity said, "Indian local markets are expected to extend their gain today, though at higher levels we may see some profit booking as yesterday local equities posted new milestones and closed all time high for the day."

The yen nurses broad losses as investors sold the Japanese currency in a precautionary move against any further policy easing by the Bank Of Japan.

Global cues, meanwhile, are positive with US markets ending trade with marginal gains in volatile trade. European markets too closed with modest gains ahead of the European Central Bank policy meet. And Asian markets traded mixed in morning trade.

In other asset classes, Nymex crude was trading at sub-USD 47 per barrel amid worries over ample supplies and sluggish demand after the International Monetary Fund cut its 2015 global economic forecast. Brent is trading at USD 48 dollars per barrel.

From the precious metals space, gold rose to USD 1290 dollars an ounce to a 4-and-a-half month high as uncertainty over the extent of a stimulus program the ECB is expected to unveil on Thursday drove investors into assets seen as lower risk.