Market ends at record closing high, Sensex rises 435 points led by banks

3:30 pm Market Closing: Benchmark indices ended at record closing high on Wednesday, backed by banks and infrastructure stocks after recapitalisation and highway projects boost.

The 30-share BSE Sensex was up 435.16 points or 1.33 percent at 33,042.50 and the 50-share NSE Nifty rose 87.70 points or 0.86 percent to 10,295.40.

The market breadth was negative as about three shares declined for every two shares rising on the BSE.

3:29 pm V-Guard Industries up 8%: V-Guard Industries today reported a 25 percent increase in its net profit at Rs 46.49 crore for the quarter to September.

The corresponding figure during the same period of the previous fiscal is Rs 37.18 crore, V-Guard Industries said in a BSE filing.

Net sales during the quarter under review was up 15.26 per cent at Rs 559.91 crore as against Rs 485.75 crore in the year-ago period.

"We have been able to partly recover the sales loss due to GST," V-Guard Industries Managing Director Mithun K Chittilappilly said.

On outlook, he said the company expects to perform in line with expectations in the coming quarter and the outlook remains cautiously positive.

3:25 pm Earnings: FMCG company Emami's second quarter (July-September) profit beat analyst expectations, rising sharply by 49.3 percent year-on-year to Rs 98.7 crore.

Profit for the quarter ended September 2016 stood at Rs 66.1 crore. It was expected at Rs 80 crore for the quarter, according to average of estimates of analysts polled by CNBC-TV18.

Revenue during the quarter grew by 9.7 percent to Rs 628.1 crore compared with Rs 573 crore in same quarter last fiscal.

Consolidated EBITDA (earnings before interest, tax, depreciation and amortisation) rose 14.9 percent year-on-year to Rs 201.3 crore and margin expanded by 140 basis points to 32 percent for the quarter ended September 2017.

3:15 pm Fundraising: Manappuram Finance, a gold loan NBFC, today said its board will meet next week to consider raising Rs 200 crore through allotment of non-convertible debentures on a private placement basis.

"The Financial Resources and Management Committee of the board of directors of the company... will consider the allotment of secured redeemable non-convertible debentures having face value of Rs 10 lakh each for Rs 200 crore on a private placement basis," Manappuram Finance said in a BSE filing.

Stock of the company was trading 3.61 percent lower at Rs 97.40 on the BSE.

3:07 pm Divestment: Sources told CNBC-TV18 that the government is planning to divest 10 percent stake in NBCC for around Rs 2,400 crore.

Department of Disinvestment is likely to send a note for cabinet clearance soon.

Sources said the government is expected to reduce its stake in NBCC to 65 percent (from 75 percent) via stake sale.

In 2016, it sold 15 percent stake in NBCC for Rs 2,200 crore through IPO.

3:03 pm Interest cost of recap bonds: Chief Economic Adviser Arvind Subramanian today said interest burden of recapitalisation bonds on the government would be around Rs 9,000 crore and the move may not have an inflationary impact.

This cost can be offset by growth in economic activity, credit supply and private investment, he said in a lecture at SGTB Khalsa College here.

"First, the true fiscal cost of issuing the Rs 1.35 lakh crore recapitalisation bonds is the interest payment of about Rs 8,000-9,000 crore. But cost can be offset by the confidence impact of addressing the critical economic bottleneck, thereby increasing credit supply, private investment and growth," he said.

2:55 pm Infra stocks in action: Driven by the government's recent push to infrastructure sector, shares of frontline infra companies soared between 2 and 19 percent intraday on Wednesday.

JKumar Infra gained the most at 19 percent, while stocks such as Larsen and Toubro, NCC, Dilip Buildcon, HCC and Sadbhav Engineering, among others rose 5-12 percent between them.

The government on Tuesday approved mega infrastructure projects worth Rs 6.92 lakh crore as part of a broad plan to create thousands of new jobs, raise income, boost investment and quicken growth in the broader economy.

Finance minister Arun Jaitley said that the government will launch an umbrella road building programme to de-bottleneck the sector. The program will cover 83,677 km of roads and will involve a capital expenditure of Rs 6.92 lakhs crore over the next 5 years.

2:45 pm Buzzing Stock: Shares of Reliance Communications fell 5 percent intraday on Wednesday as investors turned cautious of some corporate developments.

According to a report in The Economic Times, RCom is shutting down its DTH (direct-to-home) operations effective from November 18.

The company confirmed to the newspaper that since their licence is expiring they will not be able to continue with their DTH operations - Reliance Digital TV.

2:30 pm Recap thumbs up: Bank recapitalisation is "critical" for the economic recovery of the country as it will step up lending which in turn will aid growth numbers, says a report. According to a research report by Bank of America Merrill Lynch (BofAML), "bank recapitalisation is a sin qua non (an essential condition) for recovery.... It will step up lending, and, therefore, growth, step up tax collections and partly bring down the fiscal deficit".

The government yesterday unveiled a Rs 2.11 lakh crore two-year road map for strengthening NPA-hit public sector banks, which includes re-capitalisation bonds, budgetary support, and equity dilution. "This (capital infusion in PSBs) will pull down lending rates, spur aggregate demand, put idle factories to work, exhaust capacity and spark investment in 2-3 years," the report said.

The capital infusion of PSBs entails mobilisation of capital, with maximum allocation in the current year, to the tune of about Rs 2,11,000 crore over the next two years, through budgetary provisions of Rs 18,139 crore, and recapitalisation bonds to the tune of Rs 1.35 lakh crore.

"This should help PSU banks heal their broken balance sheets and meet adequate capital requirements. Once growth recovers, the government can gradually convert these recap bonds into normal G-secs and sell them to the market, as happened in the past," the report said.

2:10 pm GIC Re Update: General Insurance Corporation of India fell as much as 14.5 percent today to hit a low of Rs 780 after tepid debut.

It was trading at Rs 803.55 on the National Stock Exchange, lower by 11.9 percent compared with issue price of Rs 912 per share.

2:00 pm Earnings Estimates: FMCG major Hindustan Unilever's second quarter profit is seen rising 10.5 percent year-on-year to Rs 1,210 crore and revenue may increase 5.8 percent to Rs 8,971 crore.

EBITDA (earnings before interest, tax, depreciation and amortisation) is likely to grow 17.5 percent to Rs 1,649 crore and margin may expand 180 basis points to 18.4 percent compared with same quarter last fiscal, according to average of estimates of analysts polled by CNBC-TV18.

Margin may be aided by higher gross margin, lower advertising spends & cost controls.

1:50 pm Market Check: Equity benchmarks extended gains in afternoon, with the Sensex rising 429.74 points or 1.32 percent to 33,037.08 and the Nifty climbing 88.30 points to 10,296.

The volatility increased a bit during the day ahead of expiry of October derivative contracts on Thursday.

Nifty Bank rallied 750 points, largely backed by PSU banks after mega recapitalisation plan of Rs 2.11 lakh crore that will be spread over two fiscal years.

The broader markets continued to underperform benchmarks as the BSE Midcap and Smallcap indices were flat due to weak market breadth. About three shares declined for every two shares rising on the BSE.

1:35 pm Market Outlook: "We were waiting for a cue for the investment cycle to pick up. Public sector undertaking (PSU) bank recapitalisation of Rs 2.11 lakh crore is perhaps the first step. We still need to address the demand side of the investment but yes, the supply at least is in place now," said Pramod Gubbi, Head of Equity at Ambit Capital in an interview to CNBC-TV18.

The shape of economic growth will necessarily move from consumption led to investment led at some stage, he added.

This step augurs well for the broader cyclical segment of the market particularly sectors which have been short of capital, particularly real estate, metals, engineering and construction, infrastructure. These could see fund flows coming into them, said Gubbi.

He expects overall credit demand to pick up across the board.

1:24 pm RCom falls 3%: The debt-ridden telecom operator, Reliance Communications, has plans to shut down its 2G mobile business by the end of November, but will continue to offer 3G and 4G services, industry sources told PTI.

The company has also asked a number of employees to quit as part of its winding up of the operations.

An e-mail query sent to RCom elicited no immediate reply.

The move comes after the company failed to close the merger deal with telecom operator Aircel early this month.

1:12 pm Kotak Bank in focus: Private sector lender Kotak Mahindra Bank's July-September quarter grew by 22.2 percent year-on-year to Rs 994.31 crore, backed by operating income, other income and NII.

Profit for the quarter ended September 2016 stood at Rs 813.29 crore.

Net interest income, the difference between interest earned and interest expended, increased 15.9 percent to Rs 2,312.66 crore compared with year-ago quarter.

Asset quality improved nicely in the quarter ended September 2017 as gross non-performing assets (NPA) fell 11 basis points sequentially to 2.47 percent and net NPA slipped 42 basis points to 1.26 percent.

Provisions for bad loans for the quarter stood at Rs 216.5 crore, higher by 6.3 percent quarter-on-quarter and 9.5 percent year-on-year.

At 13:12 hours IST, the stock price was quoting at Rs 1,024.10, down Rs 43.60, or 4.08 percent on the BSE.

1:00 pm Earnings: Coromandel International has reported higher consolidated profit at Rs 342.5 crore for July-September quarter, a growth of 60.5 percent compared with Rs 213.4 crore in same quarter last fiscal.

The stock gained a percent.

12:55 pm IPO subscription: Reliance Nippon Life Asset Management's Rs 1,542-crore initial public offering has been oversubscribed 2.87 times, as per data available on NSE.

The issue received bids for 12.28 crore equity shares against offer size of 4.28 crore shares, excluding anchor investors' portion.

12:50 pm Moody's on recapitalisation: Moody's Investors Service today said the government's plan to infuse Rs 2.11 lakh crore in PSU banks is "significant credit positive" as it will help address the problem of weak capitalisation.

To strengthen capital position of banks for onward lending to private sector, the government yesterday announced that an 'unprecedented' Rs 2.11 lakh crore would be infused in PSBs over two years.

"The quantum of the plan is large enough to comprehensively address these banks' weak capitalisation levels and is a significant credit positive as weak capitalisation is the main credit weakness for most rated public sector banks," said Srikanth Vadlamani, a Moody's Vice President and Senior Credit Officer.

Of the total Rs 2.11 lakh crore, Rs 1.35 lakh crore would be in the form of recapitalisation bonds, while the rest would involve a combination of already announced budgetary support and capital raisings by the banks themselves from the capital markets.

12:40 pm Europe Trade: European stocks opened lower as investors look out for new earnings reports and economic data.

The pan-European Stoxx 600 was 0.13 percent lower with most sectors moving in negative territory.

12:34 pm Management Interview: HCL Technologies' President & Chief Executive Officer C Vijayakumar told CNBC-TV18 that India business impacted numbers by USD 20 million.

"Global business has outperformed, but biggest headwind this time was India business decline," he said.

HCL Technologies will see marginal pressure from India business in coming quarters, he feels.

"We have seen project specific ramp downs in India business. We have been participating in India business but will reduce focus over time," he said.

12:25 pm Gold Update: Gold prices edged lower today, pressured by stronger equities and a firmer dollar amid speculation over who will be the next US Federal Reserve chief.

US gold futures for December delivery were 0.2 percent lower at USD 1,275.20 per ounce.

Asian shares inched higher, while US Treasury yields and the dollar got a lift following a report that Republican senators were leaning towards John Taylor to be the next Federal Reserve chief.

12:15 pm Buzzing: IT major Infosys recovered from its early losses of as much as 1.24 percent, a day after the company reported over 3 percent
rise in net profit but lowered its annual revenue forecast.

However, later the stock recovered from losses and was trading 1.58 percent higher at Rs 941.35 on BSE.

Infosys, India's second-biggest software services exporter, yesterday reported a better-than-expected 3.3 percent rise in the second quarter net profit to Rs 3,726 crore but slashed annual revenue forecast.

It cut revenue growth forecast to 5.5-6.5 percent for the year to March 31, 2018, from 6.5-8.5 percent previously projected.

12:04 pm Market Check: Equity benchmarks retained morning gains, though were trading off record highs. PSU banks were biggest gainers after the government announced recapitalisation of Rs 2.11 lakh crore that will be spread over two fiscal years.

Infrastructure stocks were also in action on a Rs 7 lakh crore highways development plan. L&T gained 5 percent.

The 30-share BSE Sensex rose 322.91 points or 0.99 percent to 32,930.25 and the 50-share NSE Nifty rose 57.30 points or 0.56 percent to 10,265 despite weak market breadth.

About 1,248 shares declined against 1,117 advancing shares on the BSE.

11:59 am RBI Governor on recapitalisation:  The Government of India's decisive package to restore the health of the Indian banking system is in the view of the Reserve Bank of India (RBI), a monumental step forward in safeguarding the country's economic future, RBI Governor, Urjit Patel said in a statement.

"For the first time in last decade, we now have a real chance that all the policy pieces of the jigsaw puzzle will be in place for a comprehensive and coherent, rather than piece-meal, strategy to address the banking sector challenges. It bodes us well that this step has been taken in a time of sound macroeconomic conditions for the economy on other fronts."

11:50 am USFDA nod: Wockhardt Bio AG, the subsidiary of Mumbai-based pharma company Wockhardt, has received approval from the US Food and Drug Administration for Abiraterone Acetate tablets.

Abiraterone Acetate tablets are used for treatment of castration-resistant prostate cancer.

11:45 am Benefits of PSU banks recapitalisation: The capital infusion of public sector banks (PSBs) is a "big bang reform" aimed at supporting credit growth and job creation, says a SBI research report.

The government on October 24 unveiled Rs 2.11 lakh crore two-year road map for strengthening NPA-hit public sector banks, which includes re-capitalisation bonds, budgetary support, and equity dilution.

According to the SBI research report Ecowrap, as PSBs have 70 percent market share in the banking space, this will help the government to gear-up lending to MUDRA scheme, which has the highest employment opportunities in the country.

"Till now Mudra loan has been distributed to around 9.18 crore units and around 80 per cent of these loans have been sanctioned to women entrepreneurs," the report said.

It further said that Mudra since its inception has generated 1.68 crore incremental jobs and total around 5.5 crore of jobs mostly in industrialised states like Karnataka, Tamil Nadu and Maharashtra.

11:37 am Stake Buy: Zee Entertainment Enterprises' promoter group firm Cyquator Media Services will acquire a little over 1 percent stake in the company from Essel Media Ventures for an estimated value of Rs 516 crore.

In a regulatory filing, Zee Entertainment Enterprises said Cyquator Media Services will acquire 99.32 lakh shares or 1.03 per ent stake on October 31 or within 90 days thereafter.

Essel Media Ventures is also a part of the Zee Group.

11:28 am Nilekani's strategy: Infosys' non-executive Board chairman and co-founder Nandan Nilekani outlined the broad strategy for the company going forward and provided an update on some issues that were taken up when he returned to the company in August this year.

Taking the dais, Nilekani - also known as the architect of India's biometric identity programme, Aadhaar - took questions on strategy, but divulged little about the internal on goings at the country's second largest software exporter.

The company's search for a new chief executive, post Vishal Sikka's exit in August, is making ''decent progress'', Nilekani said in a media interaction post the second-quarter results.

He also spoke about the shareholder meetings, the first round of which has been concluded. ''This process will continue into this quarter,'' and a report will be presented with the third quarter results in January, he said.

Referring to the ''turbulence'' the company faced during the September quarter, Nilekani praised the management's efforts to carry out the business effectively.

11:23 am FM on GST revenues: Three months into GST rollout, the new indirect tax regime has consistently given Rs 93,000-94,000 crore in taxes every month on back of encouraging response from the industry, Finance Minister Arun Jaitley said today.

On a day the government announced waiver of late fee for those who filed late tax returns for months of August and September, he indicated rationalisation of GST tax slabs once revenue stream stabilises.

As much as Rs 92,150 crore - Rs 14,042 crore in Central-GST levy, Rs 21,172 crore from State-GST and Rs 48,948 crore on account of inter-state and exports levy called Integrated-GST, was collected for the month of September.

GST tax collections in July - the maiden month of rollout of the Goods and Services Tax (GST) - was over Rs 95,000 crore and it was over Rs 91,000 crore in August.

11:10 am USFDA approval: Drug firm Lupin today said it has received the final approval from the US health regulator for its testosterone topical solution.

The company has received final approval for its testosterone topical solution, 30 mg per actuation from the United States Food and Drug Administration (USFDA) to market the product, Lupin said in a BSE filing.

The approved product is a generic version of Eli Lilly and Company's Axiron topical solution, it added.

The testosterone topical solution are indicated for replacement therapy in males for conditions associated with a deficiency or absence of endogenous testosterone, it added.

11:07 am Food price inflation: The hike in minimum support prices of rabi crops is a prudent policy response and should keep food price inflation contained in the near term, says a Nomura report.

The government yesterday hiked the minimum support price (MSP) of wheat by Rs 110 to Rs 1,735 a quintal and of pulses by up to Rs 400 per quintal to encourage farmers to boost area and production of these crops.

MSP is the rate at which government buys the grain from farmers. According to the Japanese financial services major, the MSP increase is largely similar to the hike announced last year, although larger than the rise during 2013-14 to 2015-16.

"In the context of the upcoming elections and reports of farm distress, we view these hikes as a prudent policy response," Nomura said.

11:00 am Private banks weak: The market came off day's high due to selling pressure in private banks as Rs 2.11 lakh crore recapitalisation may help public sector banks gain market share. The Nifty Private Bank index was flat.

HDFC Bank, HDFC, Kotak Mahindra Bank, IndusInd Bank, Yes Bank, Indiabulls Housing Finance and Bajaj Finance were down 2-4 percent.

10:50 am Market Check: Benchmark indices traded steady after cooling off the record high marks as investors bet big on bank recapitalisation step of the government.

The Sensex was up over 250 points at 32,850, while the Nifty traded higher over 51 points at 10250, below 10,300 mark it achieved intraday.

State Bank of India and ICICI Bank were the top gainers, while HDFC Bank, Kotak Mahindra Bank, Edelweiss and Bhushan Steel were the top losers.

10:43 am Mutual Fund View: S Krishna Kumar, CIO Equity at Sundaram Mutual Fund believes the recapitalisation plan is a long-awaited step.

''They had to take the bull by the horns and it has taken the massive step to put this capital. This changes the framework with which an investor would look at banking and financial space. Structurally, they are back in the game,'' S Krishna Kumar, CIO Equity, Sundaram Mutual Fund told CNBC-TV18 in an interview, adding that the risk profile of PSU banks will get a lot better.

The government on Tuesday announced Rs 2.11 lakh crore recapitalisation plan for state-owned banks and approved mega infrastructure projects worth Rs 6.92 lakh crore as part of a broad plan to create thousands of new jobs, raise income, boost investment and quicken growth in the broader economy.

10:25 am FII View: In an interview to CNBC-TV18, Arvind Sanger, Managing Partner of Geosphere Capital Management spoke at length about the mega recapitalisation plan and shared his views public sector undertaking (PSU) banks. He expects public sector undertaking banks to take aggressive write-downs and clean up the balance sheet. He also sees loan cycle turning up post the PSU recapitalisation.

10:10 am IPO subscription: The Rs 1,542-crore initial public offering of Reliance Nippon Life Asset Management (formerly Reliance Capital Asset Management) has been subscribed fully soon after opening for subscription on Wednesday.

The public issue has been oversubscribed 2.05 times, receiving bids for 8.77 crore equity shares against offer size of 4.28 crore shares (excluding anchor investors' portion), as per data available on the National Stock Exchange.

10:00 am Tepid Listing: General Insurance Corporation of India share price listed at Rs 857.50 on the National Stock Exchange, lower by 6 percent compared with issue price of Rs 912.

Pre-opening trade already indicated that the stock would fall in early trade.

The stock did touch a high of Rs 867 and low of Rs 850 (the price in pre-opening trade) in early trade.

The Rs 11,370-crore initial public offer (IPO) of General Insurance Corporation, which was opened during October 11-13, was oversubscribed 1.38 times.

9:55 am Private Banks mixed due to asset quality concerns:

9:45 am Pre-opening: General Insurance Corporation of India share price has settled at Rs 850 per share, lower by 6.8 percent compared with issue price of Rs 912.

9:39 am Penalty: The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 2 crore on IDFC Bank Limited for contravention of regulatory restrictions pertaining to loans and advances.

The RBI in a release said the action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.

The status report of the bank based on its financial position as on December 31, 2016, revealed, inter alia, non- adherence with certain directions pertaining to sanction / renewal of loans and advances, the central bank said.

9:33 am Earnings: Software firm HCL Technologies said the second quarter (July-September) consolidated profit grew 0.8 percent sequentially to Rs 2,188 crore and has raised its full year dollar revenue guidance but retained constant currency revenue guidance.

Consolidated rupee revenue and dollar revenue during the quarter increased 2.3 percent each quarter-on-quarter to Rs 12,434 crore and USD 1,928 million.

The IT services provider has maintained its full year constant currency revenue growth guidance at 10.5-12.5 percent and EBIT margin guidance at 19.5-20.5 percent, but has raised full year dollar revenue guidance to 12.1-14.1 percent from 11.3-13.3 percent earlier.

EBIT (earnings before interest and tax) grew by 0.3 percent to Rs 2,451 crore but margin contracted 40 basis points to 19.7 percent compared with previous quarter.

Earnings barring bottomline missed analysts' expectations. Profit was estimated at Rs 2,143 crore on revenue at Rs 12,572 crore and dollar revenue was expected at USD 1,951 million while EBIT was estimated at Rs 2,489.3 crore with margin at 19.8 percent for the quarter, according to average of estimates of analysts polled by CNBC-TV18.

9:25 am Nifty PSU Bank index up 23%:

9:20 am Market Outlook: Nirmal Jain, Chairman of IIFL said PSU banks recapitalisation was very positive move.

"Till now, the amount of recap was never adequate. Government has provided for almost all of the requirement. Although we don't know the coupon rate for the bonds and tenure as well, but it looks like it was much needed and this will better balance sheets," Jain said in an interview to CNBC-TV18.

But what is needed also is the autonomy and consolidation of banks from longer term point of view. Along with this, the infra spend of Rs 7 lakh crore could help economy revive and come back on growth path, he added.

9:15 am Market Check: Equity benchmarks hit historic highs in opening trade on Wednesday, driven by banks after the government announced Rs 2.11 lakh crore recapitalisation for PSU banks on asset quality worries.

The 30-share BSE Sensex was up 456.55 points or 1.40 percent at 33,063.89 and the 50-share NSE Nifty rose 104.80 points or 1.03 percent to 10,312.50.

HCL Technologies, Infosys, HDFC Bank, Kotak Mahindra Bank and Asian Paints were under pressure in early trade.

Can Fin Homes, M&M Financial, L&T Finance and Bharat Financial were down 1-2 percent.

UCO Bank, Bank of Baroda, Bank of India, Corporation Bank, Bank of Maharashtra and Union Bank rallied 15-20 percent.

Shipping Corporation, KNR Construction, J Kumar Infra, Ashoka Buildcon, Sadbhav Engineering and Electrosteel Steels rallied up to 8 percent.

The Indian rupee has drifted lower in early trade. It has opened at 65.14 against the US dollar, down 7 paise compared with 65.0675 level in previous session.