Sensex, Nifty under pressure amid volatility; gold prices rise

Moneycontrol Bureau12:59 pm Market Update: Equity benchmarks were lower in afternoon as investors awaited speech by British Prime Minister Theresa May on Brexit plans and US President-elect Donald Trump's inauguration.The Sensex was down 49.77 points at 27238.40 and the Nifty fell 13.70 points to 8399.10.12:45 pm Analysts on LIC Housing: Brokerage houses remained positive on LIC Housing Finance after stable December quarter earnings but expect pressure on margin and home loan yields going ahead.

With maintaining buy rating and target price of Rs 693 (implying 33 percent upside), Motilal Oswal cut its EPS estimates for FY17/18 by 4/3 percent to account for lower yields in the home loan segment due to the recently announced rate cuts, though it believes a company with decent growth, superior asset quality and around 19-20 percent consistent return on equity (RoE) deserves a better multiple.

Nomura, which retained buy rating with unchanged target price at Rs 700, also says cut in MCLR (marginal cost of funds based lending rate) & mortgage rates by banks will impact mortgage spreads and re-financing could impact company's core mortgage growth as well.

12:34 pm  UP poll process kicks off: The Uttar Pradesh assembly poll process today kicked off with the EC issuing notification for the first phase of voting on February 11 which will cover 73 constituencies spread over 15 districts in Muslim-dominated Western UP.

The filing of nominations for these constituencies started at 11 am, immediately after the notification, the Chief Electoral Officer (CEO) office here said.

The last date of filing nominations is January 24 while candidature can be withdrawn till January 27. The polling will be held on February 11.

Uttar Pradesh goes to polls in seven phases between February 11 and March 8.12:20 pm Pound fall: The pound hovered near three-month lows versus the dollar and stocks were mostly weaker as investors waited for British Prime Minister Theresa May to lay out plans to exit the European Union amid fears Britain will lose access to the single market.

According to her office, May will say in a speech later in the day that Britain will not seek a Brexit deal that leaves it "half in, half out" of the EU. She is due to set out her 12 priorities for upcoming divorce talks with the bloc.

Those priorities will include leaving the EU's single market and regaining full control of Britain's borders, media reported, reinforcing fears of a 'Hard Brexit' which has pushed the pound to some of the lowest levels against the US dollar in more than three decades and weighed on other riskier assets.

Sterling hovered around USD 1.2070, in striking distance of USD 1.1983, its lowest since October 7 struck the previous day.Also read - Buy, sell, hold: 5 key largecap stocks to watch out today12:00 pm Market Check

Equity benchmarks extended fall amid volatility in afternoon, weighed by oil, banking & financials, metals and auto stocks.

The 30-share BSE Sensex was down 67.63 points at 27220.54 and the 50-share NSE Nifty fell 22.10 points to 8390.70. The broader markets also erased morning gains to trade flat.

Reliance Industries, HDFC, HDFC Bank, ICICI Bank, Adani Ports and ONGC were leading contributors to Sensex's fall, down 0.6-2.7 percent.

ITC, Asian Paints, HUL, TCS, Infosys, L&T and Axis Bank continued to support the market, rising 0.5-1.6 percent.

Gold prices rose to hover near seven-week highs hit the day before, with safe-haven demand boosted ahead of a speech in which British Prime Minister Theresa May is expected to discuss plans for a "hard Brexit".

US gold futures were up 1.2 percent at USD 1,210.40 per ounce while silver futures rose 1.10 percent to USD 16.95 an ounce.