Sensex gains strength, Nifty inches towards 8450; GAIL surges 5%

Moneycontrol Bureau12:59 pm Market Update: Benchmark indices remained higher with the Sensex rising 51.97 points to 27309.61 and the Nifty up 11.35 points at 8428.35.About 1395 shares advanced against 1110 declining shares on the BSE.12:48 pm Earnings: Print media company DB Corp said consolidated profit grew by 6.7 percent year-on-year to Rs 118.1 crore in the quarter ended December 2016, driven by revenue growth.

Total income from operations during the quarter increased 6.3 percent to Rs 627.3 crore compared with Rs 590 crore in year-ago period, led by advertising revenue growth of 4 percent and circulation revenue growth of 9 percent.

Operating profit rose by 4.5 percent year-on-year to Rs 198.2 crore but margin contracted by 50 basis points to 31.6 percent in the quarter gone by.

DB Corp said its radio business' profit grew by 3 percent to Rs 8.1 crore and advertising revenue increased 12 percent to Rs 36.3 crore. Digital business showed 33 percent growth at Rs 16.2 crore on yearly basis.12:37 pm Budget Expectations: The government may halve the cess on domestic crude oil to benefit companies like state-owned ONGC and Anil Agarwal-led Cairn India to offset global crude price rise from pushing up pump-gate prices of petrol and diesel in India.

Based on the recommendations made by domestic oil producers, finance minister Arun Jaitley is likely to cut the cess on domestic crude oil. An announcement is expected in the budget 2017-18 on February 1, a source, who did not wish to be identified, told Moneycontrol.

In budget 2016-17, Jaitley had converted the Rs 4,500 a tonne fixed levy on crude oil to 20 percent ad valorem charge, with an aim to reduce the impact. However, oil producers claimed that they pay more than Rs 4,500 a tonne, considering a surge in current crude prices to around USD54 a barrel now from about USD 45 a few months ago.12:20 pm FII View: Ambit Capital is apprehensive about the likelihood of a sharp surge in markets in the near term. The fears come on the back of under-pressure FII flows and impact of demonetisation playing out, according to Saurabh Mukherjea of Ambit Capital.

Prevailing conditions aren’t conducive for a big rally in the markets in the short term, Mukherjea told CNBC-TV18. The brokerage house had in November scrapped its FY17 Sensex target of 29,500 in view of the government’s demonetisation drive. Ambit Capital’s FY18 Sensex target stands at 29,000.

Also read - Axis Bank Q3 profit seen down 63% to Rs 802 cr, slippages key12:00 pm Market Check

Benchmark indices gained strength amid volatility in noon trade with the Nifty inching towards 8450 level, supported by oil & gas, PSU banks and telecom stocks.

The 30-share BSE Sensex was up 76.61 points at 27334.25 and the 50-share NSE Nifty rose 19.90 points to 8436.90. About 1374 shares advanced against 1061 declining shares on the BSE.

Gail (India) was top gainer among Sensex stocks, up nearly 5 percent as a meeting of the board of directors is scheduled on January 25 to consider issuance of bonus shares and fund raising by issuance of bonds on private placement basis.

PSU Bank index jumped 1 percent as IDBI Bank, SBI, PNB and Bank of Baroda gained 0.5-3 percent.

Tata Motors, Bharti Airtel, SBI, ONGC, Adani Ports, ITC and Reliance Industries rose 1-2.5 percent while HDFC Bank, Axis Bank, Wipro, TCS and Lupin were under pressure.

Asia markets traded mixed, with Japan's Nikkei rising nearly 1 percent.

US oil moved away from one-week lows touched the session before, with investors turning their attention to upcoming government data on US inventories. Brent crude rose 0.95 percent to to USD 54.43 a barrel after closing down 2.8 percent in the last session. US crude oil was trading up 0.90 percent at USD 51.54 per barrel.