Nifty ends above 7750, Sensex gains 130 points ahead of RBI policy

Late strength helped the BSE Sensex gain more than 100 points on Monday ahead of RBI monetary policy, driven by technology, auto and telecom stocks. Upside in European markets also provided support.

The market turned volatile after starting off trade on a strong note but it managed to regain strength in last hour of trade. The 30-share BSE Sensex climbed 130.01 points or 0.51 percent to 25399.65 and the 50-share NSE Nifty rose 45.75 points or 0.59 percent to 7758.80.

Investors are keenly waiting to get the Reserve Bank of India's monetary policy out of the way before taking up any fresh trades, say market experts. According to them, a 25-bp cut is already priced in but over & above that may keep northward journey of the market intact.

Market expert Neeraj Deewan believes the RBI is unlikely to disappoint the street and even a cut of 50 basis points cannot be ruled out.

As long as both global liquidity and markets remain stable, there should be no reason to worry on direction of indices, he says.

The RBI will meet on April 5 for its first monetary policy meeting of the fiscal.

European markets pushed higher today despite choppy trade, as markets shook off the sharp decline in telecom stocks and eyed fluctuation in oil prices. France's CAC, Germany's DAX and Britain's FTSE gained 0.5-1 percent (at 16 hours IST) after flat opening. Asian markets ended mixed with Nikkei falling 0.25 percent. China, Hong Kong and Taiwan markets were shut today.

Meanwhile, a media report indicated that the Reserve Bank of India is embarking on an experiment to remove much of discretion the country's commercial banks have to set lending rates and force them to base borrowing costs on prevailing market rates. Under the new rules, which is effective from April 1, banks will need to adjust their lending rates every month based on what they offer for new fixed-rate deposits, which track short-term market rates such as for treasury bills and certificates of deposit.

The broader markets closed marginally higher, led by support from strong market breadth. About 1640 shares advanced against 963 declining shares on Bombay Stock Exchange.

Mahindra & Mahindra was biggest gainer on Sensex, up 4.3 percent after the company launched new SUV Nuvo Sport with six variants. Tata Motors rallied 2 percent after a 29 percent growth in Jaguar Land Rover sales and a 17 percent growth in exports & 20 percent in commercial vehicle sales by India business in March.

Bajaj Auto was up 1.35 percent after reporting a 22 percent growth in March sales and 3 percent in exports.

Telecom stocks were in demand today after a media report suggested that the government slashed spectrum use charge from 5 percent of adjusted gross revenue to 3 percent that may save telecom companies' Rs 3,200 crore.

ITC lost 1.5 percent after cigarette companies shut down their factories on confusion over pictorial warnings. CLSA says while the news flow creates uncertainty, it sees negligible impact of the factory closure as pipeline inventory would allow ITC to meet demand. The brokerage has retained buy on the stock with a target price of Rs 370. Godfrey Phillips also plunged 4 percent.

Among others, Infosys was leading contributor to Sensex's gains, up 3 percent followed by Hindalco Industries with 2.8 percent upside while Axis Bank and Maruti Suzuki fell 1 percent each.

In broader space, Geometric surged more than 19 percent after HCL Technologies acquired the company with a swap ratio of 10:43 (which means Geometric shareholders will get 10 shares of HCL for every 43 shares held. HCL Technologies also gained over 2 percent.

Mphasis fell 2.8 percent. Marble and Blackstone made open offer to company's shareholders at a price of Rs 457 per share for acquiring majority stake in the company. Hewlett-Packard owns 60.48 percent stake in the company.

In a new listing, Infibeam Incorporation rose 3.2 percent to close at Rs 445.75 compared to issue price of Rs 432.

3:30 pm Market Closing: Equity benchmarks gained strength again in late trade. The Sensex rose 130.01 points to 25399.65 and the Nifty climbed 45.75 points to 7758.80.

The market breadth remained strong throughout the session as about two shares advanced for every share declining on BSE.

M&M and Bharti Airtel topped buying list on Sensex, up 4 percent followed by Infosys, Tata Motors and Hindalco with 2-3 percent upside while ITC, Axis Bank and Maruti Suzuki declined 1 percent each.

3:15 pm M&M's new launch: Mahindra and Mahindra  has launched its new NuvoSport compact sports utility vehicle (SUV) in India at Rs 7.35 lakh, ex-Thane showroom price. In an exclusive interview to CNBC-TV18, Pravin Shah, President and CEO-Automotive Division of the company, says M&M has launched this car with 6 variants which will be manufactured at its Nashik Plant.

NuvoSport, which is to replace Quanto, accounts for the fastest growing category amongst utility vehicles (UVs), he adds. In the entire market, compact SUVs alone accounted for 44 percent of total UV sales in FY16, Shah says, adding that M&M has no plans to launch a petrol variant of the same.

3:05 pm Market Update: Equity benchmarks gained strength again. The Sensex rose 128.81 points to 25398.45 and the Nifty advanced 46 points to 7759.05.

About 1563 shares advanced against 969 declining shares on BSE.

2:45 pm Sadbhav in news: Sadbhav Infrastructure Project arm HYTPL has completed refinance of its existing debt with new debt.

Hyderabad Yadgiri Tollway Private Ltd (HYTPL) has a total outstanding debt of Rs 232 crore on March 31.

"HYTPL, wholly-owned subsidiary of the company, has completed refinancing of its existing rupee debt facilities with new debt taken from other lenders with revised terms and conditions," Sadbhav Infrastructure said in a regulatory filing.

It said new debt facilities will result in reduction in the interest rates from the current level, extension of the repayment pattern covering the majority balance concession period and issuance of non convertible debentures besides refinancing of existing ECB facilities.

2:17 pm RBI on banks' lending rates: The Reserve Bank of India (RBI) is embarking on an experiment to remove much of the discretion the country's commercial banks have to set lending rates and force them to base borrowing costs on prevailing market rates.

The experiment carries risks, as India periodically suffers severe cash crunches. But the rewards should be lower costs for borrowers.

The RBI adopted the rules, effective from the April 1 start of a new fiscal year, after deep frustration that it cut its key repo rate by 125 basis points last year, but banks lowered lending rates by only about 60 bps.

The RBI, keen to see monetary policy be effective, on Tuesday is expected to cut the repo rate another 25 bps as India bids to revive investment and spur economic growth.

Under the new rules, banks will need to adjust their lending rates every month based on what they offer for new fixed-rate deposits, which track short-term market rates such as for treasury bills and certificates of deposit

2:00 pm Market Check
The market remained choppy in afternoon trade with the Sensex rising 13.91 points to 25283.55 and the Nifty up 15 points at 7728.05. The market breadth continued to be positive as about 1422 shares advanced against 996 declining shares on BSE.

ITC, ONGC, Axis Bank, Coal India, HDFC and Bharti Infratel were down 1-2 percent while M&M, Bharti Airtel, Hindalco, Infosys, Tata Motors, Idea Cellular and Tata Power gained 2-5 percent.

European markets attempted gains as investors tried to shake off the sharp slip in telecom stocks and eyed the fluctuation in oil prices. London's FTSE 100 was up 0.2 percent, while France's CAC 40 reversed losses to trade up 0.1 percent and Germany's DAX was up 0.2 percent.

1:20 pm Equitas Holdings IPO: Equitas Holdings will hit the capital markets tomorrow to raise Rs 2,200-crore through an initial public offer (IPO), making it the first issue of the current fiscal which started this month. The company, with a licence for small finance bank (SFB), has fixed the price band at Rs 109-110 per share. The initial share-sale programme will close on April 7.

The IPO comprises fresh issue of shares aggregating Rs 720 crore and an offer for sale of up to 132,425,884 equity shares by existing shareholders including P N Vasudevan, MD, and private equity stake holders.

These include International Finance Corporation, Nederlandse Financierings, Aavishkaar Goodwell India Microfinance Development Company, Sequoia Capital India, Westbridge Ventures and Helion Venture Partners.

The IPO will bring down the company's foreign holding from the present 93 percent to 35 percent.

1:00 pm Market Check: Equity benchmarks as well as broader markets continued to see volatility in afternoon trade as investors are keenly watching the RBI monetary policy that will be announced on April 5.

The 30-share BSE Sensex declined 14.97 points to 25254.67 while the 50-share NSE Nifty rose 3.40 points to 7716.45. The market breadth continued to be positive as about 1364 shares advanced against 989 declining shares on Bombay Stock Exchange.

Tata Power and Idea Cellular topped buying list on Nifty, up 6 percent and 4.5 percent, respectively. Hindalco, M&M, Bharti Airtel, Infosys and Tata Motors gained 1.5-3.5 percent while ITC, ONGC, Axis Bank, ICICI Bank, HDFC, Bharti Infratel and Bank of Baroda fell 1-2 percent.

European markets opened mixed before slipping into negative territory as shaky trade in Asia and a decline in oil prices weighed on investor sentiment. CAC slipped 0.3 percent while FTSE was flat with positive bias.

12:35 pm Buzzing: Shares of Cox & Kings rallied 7 percent intraday on divestment of entire stake in two subsidiaries to UK-based company.

"Cox & Kings has sold 100 percent stake each in LateRooms UK and Superbreak business to Malvern Enterprises UK," the Mumbai-based travel company said in its filing.

It received 20 million pound through stake sale in LateRooms while its 65.58 percent-owned subsidiary Holidaybreak got a net cash of 9.25 million post stake divestment in Superbreak.

C&K bought a 49 percent stake in Malvern for 6.37 million pound while Malvern is 51 percent owned by Europe-based private equity investor. This transaction is effective from March 31, 2016.

12:12 pm Rate cut expectations: With inflation under check and government sticking to its fiscal consolidation path, market expectations are that RBI may cut interest rate by up to 0.50 percent in its first bi-monthly monetary policy review for 2016-17 on Tuesday in order to propel growth.

The government has also pared the small savings interest rate by up to 1.3 percent providing cushion to the Reserve Bank for cutting the policy rate.

Finance Minister Arun Jaitley too had last week expressed desire that the RBI should cut rate, stating "I want what everybody wants. At this stage if rate cuts do take place it's certainly going to be helpful because you need a more efficient economy and you need a more competitive cost of capital".

Bankers said high interest rate could make Indian economy sluggish given that inflation is around 5 percent.

12:00 pm Market Check
Equity benchmarks continued to consolidate in noon trade ahead of RBI monetary policy that is scheduled to be on Tuesday. The Sensex gained 16.80 points at 25286.44 and the Nifty rose 12.35 points to 7725.40.

The market breadth remained positive as about 1323 shares advanced against 909 declining shares on Bombay Stock Exchange.

Oil prices fell as the chances of Middle East producers agreeing to curb overproduction appeared to fade, while U.S. output remains stubbornly high. Front month US West Texas Intermediate (WTI) crude futures were trading at USD 36.30 per barrel, down 1.3 percent or 49 cents from their last settlement. International Brent futures were down 4 percent or 1.63 cents at USD 38.70 a barrel.

11:45 am Jaitley on RBI policy: A day ahead of Reserve Bank meet, Finance Minister Arun Jaitley today pitched for easier monetary policy, arguing that high interest rates can make the economy sluggish.

"The government has stuck to fiscal deficit commitments and inflation has been under control. Therefore, I do hope that this movement will continue in order to make our economy more competitive with more competitive interest rates," he said while addressing the CII Annual session.

Reserve Bank will hold its first bi-monthly monetary policy review for 2016-17 tomorrow.

The finance minister also stressed that the debate on crucial economic issues, like interest rates, should move in the right direction in India, which is a "large and noisy democracy".

11:30 am ITC under pressure: ITC shares slipped 3 percent intraday after the company shut down its cigarette factories on confusion over pictorial warnings. CLSA says while the news flow creates uncertainty, it sees negligible impact of the factory closure as pipeline inventory would allow ITC to meet demand. The brokerage has retained buy on the stock with a target price of Rs 370.

Initial plan of the Health Ministry to expand the pictorial warnings to 85 percent of the cigarette front packaging met stiff resistance from the industry. A parliamentary committee recommended a 50 percent warning but there has been no formal notification by the government.

"Owing to ambiguity on the policy related to revision of Graphic Health Warnings on tobacco product packs, the members are unable to continue manufacturing cigarettes from April 1, 2016," Tobacco Institute of India (TII) said last week. Not only ITC but also other companies including Godfrey Phillips, VST Industries closed their factories.

11:15 am Buzzing: Shares of Adani Enterprises today surged nearly 8 percent after the company's USD 21.7 billion coal mine project in Australia won three mining leases.

Adani's 21.7 billion dollars coal mine project in Australia yesterday won three mining leases but the Indian mining giant said a final decision on investment will be taken only after the resolution of "politically-motivated" legal challenges against its plans to build one of the world's largest coal mines.

Queensland minister for Natural Resources and Mines Anthony Lynham approved the individual lease grant for 70441 Carmichael, 70505 Carmichael East and 70506 Carmichael North, which are estimated to contain 11 billion tonnes of thermal coal.

11:00 am Market Check
The market erased more than half of gains due to selling in oil, banks and select FMCG stocks. The Sensex rose 37.29 points to 25306.93 and the Nifty advanced 17.45 points to 7730.50.

The broader markets also lost some shine, rising 0.3 percent each but the market breadth remained positive. About 1325 shares advanced against 750 declining shares on BSE.

Hindalco Industries topped buying list on Sensex, up 4 percent followed by Infosys, Tata Motors, M&M, Dr Reddy's Labs, Wipro, Bajaj Auto and Tata Steel with more than 1 percent upside. ITC, Lupin and ONGC were down more than 1 percent.

10:45 am Market Expert: Dipen Sheth of HDFC Securities is bullish on equities from a one to two year perspective, he tells CNBC-TV18. Sheth's bullishness arises from the improvement in macroeconomic conditions.

However, Sheth cautions that monsoon is still cause of concern for now.

10:30 am Hexaware in news: Baring Asia is planning to sell a 20 percent stake in IT services firm Hexaware through block deals on the stock exchanges, CNBC-TV18 reports, quoting sources.

Baring Asia holds 71 percent stake in Hexaware , and had been wanting to sell its entire stake.

Baring had paid Rs 135 per share for the stake around three years back, and the stock price has almost doubled since then.

However, sources say the sale process is facing hurdles as buyers feel valuations are expensive.

Baring was initially looking to sell its entire 71 percent stake, but it is now learnt that the plan has been dropped.

10:15 am Mphasis deal: Blackstone India has entered into a definitive agreement with Hewlett Packard to buy a majority stake in Mphasis Limited , the private-equity firm announced this morning.

This deal represents the largest acquisition by Blackstone in India and is the largest private equity transaction in India.

HP currently owns 60.5 percent of Mphasis.

Blackstone will pay a purchase price of Rs 430 per share to HP. As per the takeover code, this transaction will trigger a mandatory open offer for a purchase of additional 26 percent shares of the company.

Marble II Pte Ltd, Marble I Pte Ltd and Blackstone Capital Partners have "made an open offer to the public equity shareholders of Mphasis Ltd to acquire up to 54,928,161 fully paid-up equity shares of face value of Rs 10 each, representing 26 percent of the total voting equity share capital... at a price of Rs. 457.54 per share," for a total price of about Rs 2,513 crore, Mphasis informed exchanges today.

10:00 am Market Check
Equity benchmarks continued to see buying interest with the Sensex rising 103.94 points to 25373.58 and the Nifty climbing 35.15 points to 7748.20. The market breadth remained strong as about more than two shares advanced for every share falling on BSE. The broader markets gained 0.5 percent.

Infibeam Incorporation shares started off day with gain of 5.8 percent on debut Monday. The stock listed at Rs 457 on National Stock Exchange against issue price of Rs 432. It is the first e-commerce player in the country that listed on exchanges today. The company raised Rs 450 crore through public issue that was opened during March 21-23 and subscribed 1.11 times.

Infosys, Tata Motors, Wipro, Adani Ports, Dr Reddy's Labs and Hindalco gained 1-2 percent while ITC and Lupin fell 1 percent.

9:45 am 25 bps cut priced in?: A 25 basis point cut by the Reserve Bank of India has been priced in by markets, and may even send the Nifty into a minor correction towards the lower end of its emerging 7,500-7,800 range, says Udayan Mukherjee, Consulting Editor of CNBC-TV18.

"A 50 basis point could send the Nifty higher by another couple of hundred points," he told CNBC-TV18 in an interview.

The Reserve Bank is meeting on April for its first monetary policy meeting of the fiscal.

Globally, Mukherjee said the global outlook continues to remain clouded, the strong US jobs data notwithstanding, maintaining that we live in a time of "extraordinary monetary policies".

9:35 am Buzzing: Torrent Power shares rallied 4.7 percent intraday after the Gujarat electricity regulator approved company's past recovery of Rs 470.5 crore. 
Gujarat Electricity Regulatory Commission (GERC) approved recovery of past period gaps (net of revenue surplus of FY17) of Rs 470.50 crore by way of regulatory charge at 45 paise per unit, said the company.

GERC, on March 31, issued tariff orders for Ahmedabad Generation, Ahmedabad Distribution and Surat Distribution businesses of Torrent Power for truing-up of its financials for FY2014-15 and determination of tariff for FY2016-17.

These orders are effect from April 1, 2016.

According to order, recovery of regulatory charge has to be stopped once the said gaps are recovered in full during the year.

9:15 am Market Check
The market has started off week on a positive note, tracking global cues post US jobs data. The 30-share BSE Sensex rose 125.18 points to 25394.82 and the 50-share NSE Nifty climbed 38.15 points to 7751.20.

Adani Ports, Tata Motors, BHEL, Dr Reddy's Labs, TCS, Tata Power and Idea Cellular were early gainers while ITC lost 2 percent.

Geometric surged 20 percent intraday after HCL Technologies decided to acquire the company. Company's shareholders will get 10 shares of HCL for every 43 shares held.

Mphasis gained over a percent after Marble I, Marble II and Blackstone made open offer to company's shareholders.

Global market were firm after data showed the US added 2.15 lakh jobs, against an expected 2.05 lakh in March. Asian markets were trading higher with Nikkei rising 0.2 percent. Singapore's Straits Times gained 0.7 percent. China, Hong Kong and Taiwan markets are shut today.