Sensex, Nifty maintain uptrend; IT stocks rise, ITC down

Moneycontrol Bureau11:45 am RBI policy, what next? The Reserve Bank of India is widely expected to cut interest rates on Wednesday as the economy reels from an unexpected clampdown on cash, but foreign investors will be looking for some assurance that new Reserve Bank Governor Urjit Patel has firm control over monetary policy.

Most economists believe the RBI will cut the repo rate by 25 basis points (bps) to a six-year low of 6.00 percent at a policy review, and follow that with at least one easing next year after the scrapping of high-value bank notes severely curbed consumer demand.

Prime Minister Narendra Modi stunned the country on November 8 by banning banknotes that accounted for 86 percent of currency in circulation to draw down on the shadow economy.

11:30 am Market outlook: Unless currency disbursements improve and liquidity returns to the system quickly, the impact of demonetisation on economy and corporate performance could be much more severe than anticipated; that is the feedback from a survey done Religare Capital Markets on a recently concluded road-trip. A team comprising Religare’s MD & CEO Gautam Trivedi, MD & Head of Research Varun Lohchab and Vice President Navin Sahadeo went round the country to assess the cash crunch impact. Speaking to CNBC-TV18, they said there is chance that not only FY17 earnings will have to be trimmed, but even FY18 first half estimates could be hurt. In case liquidity does not return into the market then It could be tough for companies to compensate the business lost during the second half this year, Lohchab says.Don't miss: Laurus Labs IPO opens today: Should you subscribe?

The market continues to rally as the Sensex is up 122.75 points or 0.5 percent at 26471.85. The Nifty is up 35.95 points or 0.4 percent at 8164.70. About 1540 shares have advanced, 635 shares declined, and 110 shares are unchanged.

HDFC, GAIL, Infosys, NTPC and Wipro are top gainers while HUL, ITC, Sun Pharma, Axis Bank and Hero MotoCorp are losers in the Sensex.

Oil prices eased early in Asia as crude output rises in virtually every major export region despite plans by OPEC and Russia to cut production, triggering fears that a fuel glut that has dogged markets for over two years might last well into 2017.

Traders said the price falls were due to rising output from within the Organization of the Petroleum Exporting Countries (OPEC) and Russia.

OPEC's oil output set another record high in November, rising to 34.19 million barrels per day (bpd) in November from 33.82 million bpd in October, according to a survey based on shipping data and information from industry sources.