Nifty ends above 7100, Sensex gains 190 points; auto, pharma gain

Bulls seem to have got excited only in last hour of trade today. Sluggish throughout the day, the market reversed losses to end in green on Wednesday. The Nifty was below 7100 but a late buying pushed it to end at 7108.45 up 60.20 points or 0.8 percent. The Sensex closed up 189.90 points or 0.8 percent  at 23381.9.

However, Ridham Desai of Morgan Stanley says recovery on Dalal Street will not happen anytime soon but stops short of saying that India is in a bear market.  Recent market moves can be called a 'brutal correction' and it is in a more deep correction phase rather than a bear market, he says. Desai, of course agrees that the sentiment is looking rotten. However, he adds that whatever India is facing on the markets' front is more global and not India-specific.

Markets in Australia, Japan, and South Korea closed down after a choppy trading session.

Oil prices rose as efforts led by Russia and Saudi Arabia to broker a deal to freeze production levels and ease a global glut turned to Iran, which signalled a tough line. Iranian Oil Minister Bijan Zanganeh is meeting with his counterparts from Venezuela, Iraq and Qatar in Tehran. An Iranian official earlier said Iran would continue increasing its crude output until it reached levels seen before the imposition of international sanctions.

Fears of the government tweaking the definition of long term capital gains tax in the upcoming Budget have been keeping the market on the edge for sometime now. However, tax gurus feel that it is unlikely that the government will raise the time frame of long-term capital gains tax to three years from the current one year given the market scenario.

Recent reports have suggested that the government is considering whether to change the definition of 'long term' from one year to three years, thus ensuring that investors don't exit till three years unless willing to pay tax. Dinesh Kanabar of Dhruva advisors feels that it could have an adverse impact on the government's revenue.

Auto, capital goods, FMCG, pharma, IT and OIL & Gas stocks made a strong comeback after struggling through the day. BSE Auto index was up 1 percent, with big gainers like Tata Motors, Bajaj Auto and Maruti. Adani Ports, Dr Reddy's Labs, Sun Pharma and Tata Steel were top gainers in the Sensex.

Shares of Just Dial surged 18 percent intraday as the company is buying back 10,61,499 equity shares of Rs 10 each at a price of Rs 1550. The buyback offer will open on February 25, 2016 and the same will close on March 10, 2016.

ICICI Bank, Coal India, Lupin, Cipla and Axis Bank were top losers in the Sensex.

3:30 pm Market closing: After a sharp sell-off the market gained in last hour of trading. The Sensex ended up 189.90 points or 0.8 percent at 23381.87 and the Nifty was up 60.20 points or 0.8 percen at 7108.45. About 1122 shares advanced, 1424 shares declined, and 148 shares were unchanged. 
Adani Ports, Dr Reddy's Labs, Tata Motors, Sun Pharma and Tata Steel were top gainers in the Sensex. ICICI Bank, Lupin, Coal India, NTPC and Cipla were losers.

3:10 pm Budget: Changes in ticketing policy such as 50 percent refund on Tatkal cancellations and no limit in ticket bookings for travellers are some of the suggestions made by the people to be incorporated in Railway Budget 2016-17 in a survey. Citizens have also raised concerns over bribes taken by TTEs and misuse of emergency quota and sought it to be addressed in the survey called "Make Railways Better" conducted by LocalCircle. Approximately 63 percent of the citizens surveyed have experienced or observed TTEs taking bribes for giving seats/ticketless travel.

2:55 pm buzzing: Shares of Just DiaL surged 18 percent intraday. The company is going to buyback 10,61,499 equity shares of Rs 10 each at a price of Rs 1550.

The company has received final observations from the Securities and Exchange Board of India (SEBI) for the buyback.

The buyback offer will open on February 25, 2016 and the same will close on March 10, 2016. The company will dispatch the letter of offer for the buyback to the eligible shareholders on or before February 18, 2016.

2:45 pm Interview: VD Mhaiskar, CMD of IRB Infrastructure Developers says the industry is keenly awaiting details on the budgetary allocation to the roads sector as there is good on-ground movement on road projects. Mhaiskar points out that while fairly good number of projects are being bid-out the deals are largely on engineering procurement construction (EPC) or hybrid models, there is not much movement on build-operate-transfer (BOT) deals as the balance sheets of many developers remains stressed. He says there are fears that if budgetary allocation is insufficient, the National Highways Authority of India (NHAI) might have to dip into public market to raise funds by way of bonds etc, which can crowd the space and take away liquidity, required by private developers to raise money.

2:30 pm FII view: Recent market moves can be called a 'brutal correction' and it is in a more deep correction phase rather than a bear market, says Ridham Desai, head of India equity research and India equity strategist, Morgan Stanley. As far as corporate earnings go, India is growing faster on a relative basis, though the earnings recovery that the market has been looking for since the last year is yet to come through, he says. Desai ofcourse agrees that the sentiment is looking rotten. However, he adds that whatever India is facing on the markets' front is more global and not India-specific. "India is like a quality stock in a torrid global market," he told CNBC-TV18.

The Nifty and Sensex are witnessing volatile session. The Sensex is up 42.74 points or 0.18 percent at 23234.71, and the Nifty up 10.10 points or 0.14 percent at 7058.35. About 756 shares have advanced, 1677 shares declined, and 132 shares are unchanged.

Adani Port, BPCL, Sun Pharma, Reliance Industries, Dr Reddy's Lab are the top gainer, while Coal India, ICICI Bank, YES Bank, Lupin and Bajaj Auto are the major losers. Just Dial is up 16 percent following a buyback decision.

Meanwhile, crude prices recovered from lows, Nymex is currently trading above USD 29 per barrel.

The rupee fell to near record lows against the dollar , forcing the Reserve Bank of India (RBI) to intervene to stem further falls on a tough day for Asian currencies. The rupee fell to as low as 68.67 to the dollar, not far from a record low of 68.85 hit in August 2013 when India was struggling with its worst financial turmoil since the 1991 balance of payment crisis.

In 2013 global markets were hit by fears of a "Fed taper" as the US central bank sought to reduce its massive policy easing. This time around the rupee is also responding to a worsening global environment, including uncertainty about low oil prices and continued worries about China's economy.

1:45 pm Capital tax: It is unlikely that the government will raise the time frame of long-term capital gains tax to three years from the current one year given the market scenario, say Ketan Dalal, Senior Tax Partner at PWC India and Dinesh Kanabar, CEO of Dhruva Advisors. Recent reports have suggested that the government is mulling whether to change the definition of 'long term' from one year to three years, thus ensuring that investors don't exit till three years unless willing to pay tax. But Kanabar says the government currently gets Rs 6,000-7,000 crore through the Securities Transaction Tax (STT) and will have to forego this assured sum if it goes ahead with increasing the time period of long-term capital gains.

1:30 pm Market outlook: There are no signs of capitulation among retail investors yet, and the market is only getting cheaper by the day, Nilesh Shah, Managing Director, Kotak Mahindra Mutual Fund tells CNBC-TV18. Fund managers have no magic wand to tell when the market will bottom, and retail investors should look at their risk-return profile, asset allocation and invest long term, says Shah. The biggest positive for India right now is that it is saving around USD 70 billion on oil imports. So while all markets are falling, India is falling with a parachute, Shah says, referring to savings on crude oil.

After a bit of recovery, the market has tumbled again. The Sensex is down 136.41 points or 0.6 percent at 23055.56 and the Nifty is down 42.90 points or 0.6 percent at 7005.35. About 575 shares have advanced, 1788 shares declined, and 120 shares are unchanged.

Adani Ports, Dr Reddy's Labs, Reliance, Sun Pharma and BHEL are top gainers while GAIL, ICICI Bank, Coal India, Lupin and Hero are losers in the Sensex.

Crude oil futures fell as investor hopes that a deal between Saudi Arabia and Russia to freeze oil output at January levels would lead to a wider pact among producers faded amid concern Iran will refuse to freeze its output.

There had been hopes the deal could eventually see production cuts to support prices. But Iran signaled it would continue increasing its output until it had once again reached pre-sanctions levels.

12:55 pm Economy: Inflation based on the Consumer Price Index (CPI) is likely to remain in the 5.6-5.8 percent range over the next two months, Deutsche Bank said in a research note, predicting that RBI would cut the policy rate "one more time".

According to the global financial services firm, inflation and growth worries for the Indian economy still persist and implementation of the Seventh Pay Commission recommendations is likely to exert pressure on fiscal finances of the government - both the Centre and states.

"We expect CPI inflation to remain in the 5.6-5.8 percent range over the course of the next two months, in line with RBI's near-term target, but higher than what we had anticipated earlier," Deutsche Bank said in a research note.

12:45 pm Pharma: Glenmark Pharmaceuticals announced receipt of tentative approval from USFDA for its generic version of azelaic acid topical gel used for treating skin inflammation.

Glenmark will market this product upon receiving final approval, it said, adding that the patent for Finacea topical gel, 15 percent, is scheduled to expire on November 18, 2018.

The tentative nod granted to Glenmark Pharmaceuticals Inc, USA, by the US Food and Drug Administration (USFDA) is for azelaic acid gel, 15 percent, the generic version of Finacea topical gel, 15 percent of Bayer Healthcare, the company said in a BSE filing.

12:30 pm Market outlook: Brokerage house Credit Suisse recommends selling into rallies in shares of public sector banks and metal companies. ''We believe the sentiment-driven rebound in PSU Banks and metals is an opportunity to cut positions,'' the brokerage says in a note to clients. At the same time, operationally better companies like Adani Ports, Maruti, Tata Motors and Tech Mahindra are now looking attractive, Credit Suisse says.

Brokerage house Credit Suisse recommends selling into rallies in shares of public sector banks and metal companies. ''We believe the sentiment-driven rebound in PSU Banks and metals is an opportunity to cut positions,'' the brokerage says in a note to clients. At the same time, operationally better companies like Adani Ports, Maruti, Tata Motors and Tech Mahindra are now looking attractive, Credit Suisse says.

The market remains sluggish as the Sensex is down 58.52 points or 0.2 percent at 23133.45. The Nifty is down 21.25 points or 0.3 percent at 7027. About 568 shares have advanced, 1671 shares declined, and 109 shares are unchanged.

Adani Ports, Reliance, Dr Reddy's Labs, Tata Motors and Sun Pharma are top gainers while GAIL, Bajaj Auto, Coal India, ICICI Bank and Lupin are losers in the Sensex.

Gold futures were up 0.11 percent to Rs 28,930 per ten grams as traders raised bets amid positive cues from the global markets.

Analysts attributed the rise in gold prices to a firming trend overseas as investors await the release of minutes from the last Federal Open Market Committee meeting for further signs of the central bank's views.

11:55 am Market outlook: Despite the positive global cues, an unclear Budget picture is possibly spooking the Indian equity market, bringing Nifty below 7000 mark in the intra-day trading, says Deven Choksey, KRChoksey Investment Managers.

However, retail sector is muted and not seeing any sell-off, Choksey tells CNBC-TV18. In the midcap space, he says some of the stocks are falling badly largely because of the collateral damage in the mutual funds portfolio and positions investors have in them.

11:45 am Interview: IDBI Bank is fairly well placed despite booking a loss and making provisions in the third quarter, says the bank's deputy managing director BK Batra. "We are above the Reserve Bank norms and have lined up avenues through which we can augment capital," he told CNBC-TV18. The bank is looking at various options through which it can raise capital. It is looking at the QIP route and may also sell non-core assets. Batra says IDBI Bank has adequate back up for any capital requirement as well as any additional provisioning that the bank may have to go in for in the fourth quarter.

IDBI Bank is fairly well placed despite booking a loss and making provisions in the third quarter, says the bank's deputy managing director BK Batra. "We are above the Reserve Bank norms and have lined up avenues through which we can augment capital," he told CNBC-TV18. The bank is looking at various options through which it can raise capital. It is looking at the QIP route and may also sell non-core assets. Batra says IDBI Bank has adequate back up for any capital requirement as well as any additional provisioning that the bank may have to go in for in the fourth quarter.

11:30 am Outlook: The deflationary trend in wholesale prices in India is because of overcapacity in neighbouring markets, and this trend could persist for a while, says Chetan Ahya, Co-Head of Global Economics and Chief Asia Economist, Morgan Stanley. In an interview with CNBC-TV18, Ahya says China is unlikely to cut back on capacity as it will have implications for its job market and financial markets. The best way for India to counter imported deflation is by ensuring that its rupee is 'fairly valued'. Ahya feels the rupee at the moment is 'over valued'.

The market is still struggling as the Sensex is down 66.49 points or 0.3 percent at 23125.48, and the Nifty is down 13.90 points or 0.2 percent at 7034.35. About 513 shares have advanced, 1607 shares declined, and 90 shares are unchanged.

Adani Ports, Dr Reddy's Labs, BHEL, Reliance and Tata Motors are gainers while GAIL, Bajaj Auto, Lupin, Hero and Coal India are major losers in the Sensex.

Gold snapped a three-day losing streak, in choppy trade that saw the metal swing between gains and losses around the key USD1,200 an ounce level as stock markets consolidated recent gains. The stock market stabilisation, after last week's rout on concerns about the global economy, has reduced investor interest in gold as a safe-haven asset. The yellow metal hit a one-year high of USD1,260.60 an ounce last week.

Concerns remain that gold could correct further as some analysts say gold gained too much, too quickly.

10:55 am Steel industry: Indian Steel Association (ISA) has urged the government and banks for a financial package, including loan restructuring, to counter the crisis arising from cheap imports and subdued prices. ISA, representing the over USD 100 billion steel industry, met Steel Ministry official last month and sought a comprehensive support package on the lines of the ones extended to textiles and sugar sectors. The industry body is also in talks with the Indian Banks Association (IBA) for the package.

10:45 am Citi on Budget: The government is likely to meet its fiscal deficit target of 3.9 percent of the GDP for the current financial year, largely on account of the latest round of excise duty hikes on oil products and marginal compression in expenditure, says a Citigroup report.

The government's fiscal deficit roadmap of 3.9 percent of GDP in 2015-16 and 3.5 percent of GDP in 2016-17 looks "difficult" but "achievable", it said.

"In our base case, we now think that the government will be able to meet its 3.9 percent of GDP fiscal deficit target for FY16 because of the latest round of excise duty hikes on oil products in January/February and some marginal expenditure compression," Citigroup said in a research note.

Reflecting improvement in government finances, fiscal deficit - the gap between expenditure and revenue - in the nine months of 2015-16 worked out to 88 percent of the annual target as against 100.2 percent in the same period last fiscal, according to official figures.

10:30 am Big focus: As the government looks to double the length of the country's highways to 2 lakh km, engineering and construction giant Larsen & Toubro has said it sees huge opportunities in the sector.

It has, however, listed out a number of challenges facing the roads sector, including funding constraints.

In a presentation to investors, L&T has listed the "increased road build-out by NHAI with current focus on EPC (engineering, procurement and construction) projects" as "opportunities".

In the last two weeks alone the government has bid out 31 projects worth Rs 28,000 crore, of which nearly half were under the EPC mode.

It is a sea of red across Dalal Street as investors gear up for Union Budget. The Sensex is down 170.69 points or 0.7 percent at 23021.28, and the Nifty is down 57.10 points or 0.8 percent at 6991.15. About 289 shares have advanced, 1379 shares declined, and 57 shares are unchanged.

Dr Reddy's Labs, Tata Motors, NTPC, Sun Pharma, Infosys are top gainers while Hindalco, SBI, Bajaj Auto, Coal India and Adani Ports are losers in the Sensex.

Crude prices recovered in Asia ahead of a meeting between the Iranian and Iraqi oil ministers and following a Saudi Arabia-Russia agreement to freeze output. Oil prices have tumbled about 70 percent since June 2014, hit by oversupply, sluggish demand and concerns over the global economic outlook.

Prices have come under renewed pressure from Iran's return to world markets after the lifting last month of international sanctions linked to its nuclear programme.

9:55 am International market: Shaun Rein, managing director at China Market Research group feels the Chinese markets will remain volatile for 3-4 months, although they have opened up relatively stronger after the Chinese new-year break.

Rein says, the sentiment has improved post the new-year break with fewer mass layoffs and certain conducive policy initiatives from the Chinese government like lower mortgage rates for first-time home buyers.

"Certain cohesive and intelligent policy moves by the Chinese government have created confidence but, we may not necessarily see a boom straight through. There may be volatility for some time," he says.

9:50 am  Interview: IDBI Bank is fairly well placed despite booking a loss and making provisions in the third quarter, says the bank's deputy managing director BK Batra. "We are above the Reserve Bank norms and have lined up avenues through which we can augment capital," he told CNBC-TV18. The bank is looking at options such as raising capital through the QIP route and may also sell non-core assets. Batra says IDBI Bank has adequate back up for any capital requirement as well as any additional provisioning that the bank may have to go in for in the fourth quarter.

9:40 am Market check: The market has slipped further. The Sensex is down 143.34 points or 0.6 percent at 23048.63, and the Nifty slips 48.40 points or 0.7 percent at 6999.85. About 332 shares have advanced, 1156 shares declined, and 47 shares are unchanged.

Dr Reddy's Labs, NTPC, Tata Motors, Infosys and Sun Pharma are top gainers while Hindalco, SBI, Tata Steel, Coal India and Adani Ports are losers in the Sensex.

9:30 am FII view: Neelkanth Mishra of Credit Suisse said ,"The Indian market is down 14 percent for the year in dollar terms. The sharp risk rally on February 15 was likely catalysed by a 2.1 percent appreciation in CNH over the Chinese New Year."

"At least until the next update on China's currency reserves, the Yuan may not be an overhang. We believe the sentiment-driven rebound in PSU Banks and metals is an opportunity to cut positions."

The market has once again opened in red. The Sensex is down 55.43 points or 0.2 percent at 23136.54 and the Nifty slips 15.85 points or 0.2 percent at 7032.40. About 280 shares have advanced, 348 shares declined, and 46 shares are unchanged.

Dr Reddy's Labs, Sun Pharma, GAIL, NTPC and Infosys are top gainers while SBI, BHEL, Hindalco, Bharti Airtel and Tata Steel are losers in the Sensex.

The Indian rupee opened lower by 12 paise at 68.49 per dollar versus 68.37 Tuesday. Dollar rose against most major currencies. But, the Japanese yen rose against the dollar as the oil deal left some investors unsatisfied and buying the safe-haven currency.

NS Venkatesh of IDBI Bank said, "The rupee closed weaker against the dollar due to dollar-demand by importers."

Asia traded mostly up in a choppy morning session, as some analysts predicted that "rally fatigue" was setting in.

In Asian hours, US crude futures were up 0.48 percent at USD 29.18, after slipping 1.36 percent overnight. Global benchmark Brent finished the US session down 3.6 percent at USD 32.18 a barrel.

Oil briefly rallied in the overnight session after Saudi Arabia, Russia, Qatar and Venezuela said they would lead an effort to freeze output at January levels, dashing hopes of a cut in production.