Sensex ends 190 points higher, Nifty around 10,550 despite Patel's exit, setback for BJP

An abrupt resignation by RBI governor Urjjit Patel late on Monday, along with jitters among investors who bet on a stable government added to the negative sentiment. 

In fact, overnight, the Nifty futures on Singaporean Exchange fell 450 point as well, bracing investors for a similar impact here. 

However, some clarity emerging on single party getting a majority in all states could have aided sentiment on the markets. 

Among sectors, pharmaceuticals, PSU banks, consumption, IT and automobiles, among others, were the big gainers. Meanwhile, the Nifty Midcap index closed with gains of 2 percent. 

At the close of market hours, the Sensex was up 190.29 points or 0.54% at 35150.01, while the Nifty was up 60.70 points or 0.58% at 10549.20. The market breadth was positive as 1623 shares advanced, against a decline of 771 shares, while 139 shares were unchanged.

Yes Bank and Sun Pharma were the top gainers, while HDFC Bank, Bharti Airtel, HPCL and IOC lost the most.     

Country's largest lender State Bank of India (SBI) said extradition of fugitive liquor baron Vijay Mallya from the UK to India will speed up the recovery of over Rs 9,000 crore of loans.

In a major boost to India's efforts to bring back Mallya, who is wanted for loan default worth around Rs 9,000 crore to a consortium of 13 banks led by SBI, a UK court ordered his extradition.

"It (higher recovery of loans) is a possibility. The message is very loud and clear. What we have to understand is that it (extradition) is a message that you just can't default and run away from the country," SBI chairman Rajnish Kumar told reporters.

Market Update: It’s a major reversal in trend for the market, with all-round buying across sectors boosting indices. 

The Sensex is up 187.75 points or 0.54% at 35147.47, and the Nifty up 63.50 points or 0.61% at 10552.00. About 1517 shares have advanced, 738 shares declined, and 129 shares are unchanged.   

Buzzing stock: Tata Consultancy Services shares climbed 1.5 percent intraday Tuesday after the sharp depreciation in Indian currency and the launch of new solution for airline industry.

The Indian rupee fell more than 110 paise in opening after Urjit Patel resigned as the governor of Reserve Bank of India on Monday evening. Generally any fall in the currency is always positive for export firms. TCS earns major revenues in dollar.

In addition, the country's largest IT services company and Singapore Airlines (SIA), announced the launch of the Intelligent Airline Operations (IAO) Solution that will digitally transform airlines' ground services and operations control.

Market Update: Equity benchmarks continued to trade higher, while the Nifty reclaimed 10,500.

The Sensex was up 85.88 points or 0.25% at 35045.60, while the Nifty was up 32.50 points or 0.31% at 10521.00. About 1468 shares have advanced, 763 shares declined, and 118 shares are unchanged.

Yes Bank and Sun Pharma were the top gainers, while HDFC, HDFC Bank and HPCL lost the most. 

"The markets are forward looking & had discounted the anti incumbency wave in the Hindi heartland. The results of MP & Rajasthan being so close are +ve for the BJP. In the end we are 4 months away from the general elections where the call is Modi magic will work. On the other hand the RBI Governor resignation  also saw a knee-jerk reaction being bought into solely for the reason that the new Governor would be more communicative, responsive & will have serious interaction to improve the monitory outlook which was grappling for tight liquidity after the shadow bank problems of IL&FS. With crude in a falling market money on the sidelines would use opportunities like today to enter Indian stocks with a slightly longer term view as buy," Sanjiv Bhasin, executive vice president, markets and corporate affairs, at IIFL told Moneycontrol. 

In an interview to CNBC-TV18, Raamdeo Agrawal, Chairman at Motilal Oswal Asset Management said he stunned by the results of Chhattisgarh and surprised by MP and Rajasthan results.

The market reaction from last week, when the Sensex fell nearly 1,300 points, seems to have discounted lot more.

Now the event is behind us and it is not worst what market reacted on Monday when the Sensex closed lower by more than 700 points.

Results are little better than what predicted by exit polls. 

Market Update: There has been a sharp recovery in the market on Tuesday, with the Nifty just short of 10,500.

Automobiles, PSU banks, pharmaceuticals, and IT index are in the green, while energy and Bank Nifty fell. 

The Sensex is down 21.29 points or 0.06% at 34938.43, and the Nifty down 0.20 points or 0.00% at 10488.30. The market breadth is positive as 1134 shares advanced, against a decline of 853 shares, while 95 shares were unchanged.

Midcaps have recovered sharply, with Nifty Midcap gaining over a percent 

Strides Pharma receives approval from USFDA: Strides Vivimed Pte. Singapore has received approval for Albendazole Tablets USP 200 mg from the United States Food & Drug Administration (US FDA). This is the second generic approval by USFDA for Albendazole Tablets. 

Lupin gets USFDA approval: Shares of pharma major Lupin was down 1.5 percent intraday Tuesday. The company has received tentative approval for its Apixaban tablets, 2.5 mg and 5 mg from the United States Food and Drug Administration (USFDA) to market a generic version of Bristol-Myers Squibb Company's Eliquis Tablets, 2.5 mg and 5 mg. 

MARKET OUTLOOK: "The resignation of RBI Governor Urjit Patel is quite shocking and disturbing. The reasons for his resignation are obvious and signals a dangerous trend that institutions like rbi are no longer independent. At a time when we need a more stronger and more independent RBI, this vital institution is under intimidation. It appears that the govt is bent on weakening rbi to meet its political needs of a pliable RBI,"

Udayan Mukherjee, Consulting Editor at CNBC-TV18 said the probability of BJP winning 2:1 (two states out of Madhya Pradesh, Rajasthan and Chhattisgarh) should not be a great thing to be taken by the market and should not be a comfort level.

Currently BJP has 62 out of total 65 Lok Sabha seats, if that count drops to around 35 then that will be taken badly by the market, he feels.

With respect to RBI, the price action in currency as well as equity market will be taken with a pinch of salt by the government as they will try to protect both markets, he said, adding the day will be managed by the government.

Udayan said who is the RBI government is not important but the resignation would be perceived as important by the world. He sees deep ramification in the medium term.

Market Update: Equity benchmarks are off their low points, with the Nifty nearing 10,400.

The Sensex is down 380.52 points or 1.09% at 34579.20, and the Nifty down 109.20 points or 1.04% at 10379.30. The market breadth is negative as 347 shares advanced, against a decline of 730 shares, while 40 shares were unchanged.

Market opens: It’s a gap-down start to the market on Tuesday morning as investors turned wary of a shock resignation by RBI Governor Urjit Patel. Additionally, uncertainty around results to state elections added to their woes. 

The Sensex is down 482.68 points or 1.38% at 34477.04, while the Nifty is lower by 116.70 points or 1.11% at 10371.80. The market breadth is negative as 90 shares advanced, against a decline of 418 shares, while 16 shares were unchanged.

Among sectors, banks, automobiles, energy, consumption, and metals are the top losers. The Nifty Midcap index is down over a percent as well. 

Infosys and Tech Mahindra are the top gainers, while IndusInd Banks, Adani Ports, and Reliance Industries lost the most. 

"RBI Governor Urjit Patel has resigned, effective immediately, citing personal reasons but we believe it is very likely due to significant differences with the government. This is coming at a very inopportune time for the markets as we brace for elections results tomorrow. Exit polls have indicated adverse results for incumbents. Fiscal/monetary policy outcomes now get intertwined with political outcomes and steps by the government in the next few days become very critical. In the case of an unfavourable election verdict and a successor name not inspiring confidence, India could see sharp de-rating. In that case, we would look to export sectors like IT, pharma and consumer as potential safe harbours," Inderjeet Bhatia of Macquarie told CNBC-TV18. 

Gold Update: Gold prices held steady early on Tuesday, supported by hopes that the US Federal Reserve could pause its rate hike cycle sooner than previously thought, but a stronger dollar amid Brexit worries weighed on the precious metal.

Crude Update: Oil prices on Tuesday clawed back some of their losses from the previous day as Libya’s National Oil Company declared force majeure on exports from the El Sharara oilfield, which was seized at the weekend by a local militia group.

Global investment banks such as Nomura, Deutsche Bank and CLSA feel that the exit polls might have got BJP thinking on its strategy but the final outcome will be very different.

Most of the exit polls put Congress in a lead position in Rajasthan and Telangana, while a close contest in Madhya Pradesh and Chhattisgarh.

If actual results on December 11 mirror the exit polls, it will be considered as a setback for BJP as it went into the polls with a tally of 3-0 in its favour in states of Rajasthan, MP, and Chhattisgarh.

OIL PRICES SHAKY: Oil prices remained on shaky ground on Tuesday after sliding by 3 percent the previous day, pressured by weakness in global stock markets and doubts that planned supply cuts led by producer club OPEC will be enough to rein in oversupply.

U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $51 per barrel at 0028 GMT, unchanged from their last close.

International Brent crude oil futures LCOc1 had yet to trade.

The corporate sector in India was taken by surprise on December 10 with Reserve Bank of India Governor Urjit Patel's decision to step down.

Analysts attributed the resignation to the simmering differences between RBI and government over the former's autonomy as the Centre has sought to reduce curbs on lending and to gain access to RBI reserves.

Corporate executives and economists that Moneycontrol spoke to have expressed concerns of instability at RBI and the impact it will have on attracting long-term investment in India.

One executive on the board of a public sector bank called the resignation a  "sensitive" matter at this juncture.

The executive said he didn't expect Patel to resign as the RBI had recently signaled that the government and central bank had compromised by agreeing to study a demand for sharing a part of its capital.

A chief executive officer of a South-based bank echoed the same.

"The news of the exit had died down after the board meeting. But we had heard that the surplus transfer issue was not resolved amicably. With its autonomy at stake, I believe that the governor took this call," he added.