Sensex, Nifty hold morning gains; Asia lower, Hindalco up 4%

Moneycontrol Bureau12:59 pm Market Update: Benchmark indices remained higher with the Sensex rising 116.60 points to 26843.15 and the Nifty gaining 33.05 points at 8269.10.About 1506 shares advanced against 1037 declining shares on the BSE.12:45 pm Credit Suisse on BEL: Credit Suisse has initiated coverage on Bharat Electronics (BEL) with an outperform rating and target price of Rs 1,800 based on steady growth visibility. It says valuations look reasonable in the context of global defence and Indian cap goods peers. The stock surged 5 percent intraday.

The brokerage house expects 15 percent revenue growth and 14 percent earnings growth on the backlog of Rs 35,000 crore and strong inflows.

It also expects an average order inflow run rate of Rs 13,500 crore per annum during FY17-19 (backlog Rs 35,000 crore at 1HFY17-end) to drive growth on the back of a large opportunity basket.

India is one of the largest arms buyers, with high import dependence. BEL is the key beneficiary of extant spending and a focus on increasing indigenisation, the research firm says.

12:35 pm FII View: Indian equity markets are expected to move in a narrow range during the year and the benchmark Sensex is likely to touch 29,000 by the end of 2017, says a Deutsche Bank report.

According to Deutsche Bank's India Equity Strategy Report, 2017 is expected to be a year of uncertainty and the market is likely to be volatile and uncertain in the first half and recover in the second half.

"We expect the market to move in a narrow range during 2017, with recovery likely in the latter part of the year," Deutsche Bank said in a research note adding, "We are setting December 2017 Sensex target of 29,000 (around 8 per cent upside) implying PE of 16.4 times on 2017-18 EPS," the report said.

12:20 pm Interview: Minda Industries has got shareholders’ approval to raise funds up to Rs 500 crore via combination of debt and equity. Speaking to CNBC-TV18, NK Minda, Chairman of the company said management is still evaluating an option for dilution of equity. The promoters hold around 70 percent, of which a 5-7 percent dilution is possible. Minda Industries will use the funds raised for consolidating its business as well as for large orders. Of Rs 500 crore raised, Rs 200 crore will be set aside as reserve cash by the company. The company also plans to pare down debt by one percent, Minda said. The current debt of the company is over Rs 400 crore.Also read - Jubilant Life up 5%, Fitch sees earnings boost from radiopharma12:00 pm Market Check

Equity benchmarks maintained morning gains with the Nifty holding 8250 level, supported by banks, oil and auto stocks. It was despite weakness in Asian peers.

The 30-share BSE Sensex was up 134.69 points at 26861.24 and the 50-share NSE Nifty rose 37.95 points to 8274 while the BSE Midcap index gained 0.34 percent and Smallcap climbed 0.7 percent on positive breadth.

About 1534 shares advanced against 908 declining shares on the BSE.

Tata Motors, GAIL, Adani Ports, Tata Steel, HDFC Bank, Hindalco Industries, Tata Motors (DVR) and BPCL were top gainers, up 1-4 percent while Eicher Motors, Axis Bank, IndusInd Bank, Ambuja Cements, Power Grid and Dr Reddy's Labs were under pressure.

Asian markets were under pressure, as investor sentiment soured after the Dow retreated further from the 20,000 mark and oil prices plunged as much as 4 percent overnight. Australia's ASX 200 fell 0.8 percent, seeing broad losses across all sub-indexes except for gold which was up 1.81 percent. Japanese benchmark Nikkei 225 slipped 0.79 percent, like due to the yen's strength.