Macro Economic Survey 2016: Sensex gains 178 pts, Nifty at 7030 ahead of Budget

Moneycontrol Bureau3:30 pm Market closing: The market has ended higher in the last trading session ahead of Union Budget. The Sensex ended up 178.30 points or 0.8 percent at 23154.30, and the Nifty gained 59.15 points or 0.8 percent at 7029.75. About 1039 shares have advanced, 1435 shares declined, and 176 shares are unchanged.

Coal India, SBI, Hindalco, NTPC and L&T were top gainers in the Sensex. Among the losers were Bajaj Auto, Hero, Lupin, Bharti and Wipro.

3:10 pm FDI: Foreign Direct Investment (FDI) into the country increased by 31 percent to USD 24.8 billion during April-November, Economic Survey said today.

FDI in April-November 2014 stood at USD 18.9 billion.

With a view to liberalise and simplifying the FDI policy and to provide ease of doing business climate in the country, the government has undertaken various reforms, the survey added.

It said that FDI inflows have increased into sectors like computer software and hardware, services, trading, automobile industry, construction activities, chemicals and telecommunications.

3:00 pm Market Update: The 30-share BSE Sensex rose 156.57 points or 0.68 percent to 23132.57 and the 50-share NSE Nifty advanced 49.45 points or 0.71 percent to 7020.05.The market breadth continued to be weak as about 1380 shares declined against 988 advancing shares on the BSE.2:58 pm Kansai Nerolac in news: Kansai Nerolac says promoter bought additional 1.09 crore shares (representing 2.02 percent equity) through open market.They increased their stake to 71.29 percent. The stock gained 1.5 percent.2:55 pm Defence orders update: Defence ministry in a parliament said the government approved 66 defence acquisitions worth Rs 1.98 lakh crore in FY15 & FY16."The government signed 47 defence contracts worth Rs 64,859 crore in FY15 and 44 defence contracts worth Rs 39,955 crore in FY16.2:50 pm Electrosteel Steels in focus: Electrosteel Steels is likely to be declared an non-performing asset (NPA) by banks in Q4 on account of RBI's asset quality review, say sources.

Electrosteel deal with First International Group Laiwu Steel is likely to close in FY17 but that deal may be pushed back due to NPA status of account.

Banks believe FIG-Laiwu Steel deal may work out despite NPA tag, say sources.

It is learnt that lenders are actively considering non-SDR route to change ownership.

Consortium led by SBI approved the SDR package for Electrosteel Steels in December. SBI, PNB, IOB, Canara Bank and UCO Bank are among Electrosteel Steels' lenders.

Electrosteel Steels owes over Rs 10,000 crore to a consortium of 27 banks.

2:40 pm UBL shares sale: Diageo is eyeing sale of United Breweries shares to recover USD 135 million Standard Chartered loan guarantee, say sources.Diageo holds United Breweries shares & Watson’s interest in Force One JV. Securities will get transferred to diageo post encashment of bank guarantee by Standard Chartered. Value of United Breweries shares held as security by Diageo exceeds USD 135 million.Diageo gave guarantee to Standard Chartered against USD 135 million loan to Mallya. Borrowings under this facility matured & went into default in 2015.Standard Chartered called guarantee on January 29, forcing Diageo to settle for USD 141 million. Diageo will approach directors/courts to remove legal hurdles to share sale.2:35 pm RBI Guv Suggestions: RBI governor Raghuram Rajan has asked government to consider allowing private equity (PE) investments in PSU banks and suggests capping of shareholding of PEs in a bank but finance ministry is not keen to allow PEs in PSU banks, say sources.

2:30 pm Gyan Sangam next week: Sources say Prime Minister Narendra Modi may attend second Gyan Sangam with Finance Minister Arun Jaitley, RBI governor Raghuram Rajan and PSU banks on March 4-5.

Gyan sangam is likely to discuss quantum and timelines of banks' recapitalisation. Consolidation of PSU Banks may also be On Gyan Sangam agenda.

2:25 pm Q4 provisions may increase: Sources told CNBC-TV18 that PSU banks' provisioning may increase to average 7 percent in Q4FY16.

It is learnt that finance ministry will encourage PSU banks to publicly declare wilful defaulters.

Banks recapitalisation is likely to be enhanced to Rs 30,000-35,000 crore in FY17, say sources, adding PSU banks may be asked to engage with asset reconstruction companies (ARCs) to sort out NPA issue. Even bringing ARCs under 100 percent FDI auto route is seen as a positive for PSU Bank.2:20 pm Europe Update: European markets extended previous day's rally after a surge on Wall Street overnight following a rise in the oil price.

Britain's FTSE gained 1 percent. Germany's DAX and France's CAC surged 2 percent ecah.

The positive open comes as the Group of 20 (G-20) meet in Shanghai to try and assuage fears over global economic growth. The Organisation for Economic Co-operation and Development (OECD) has urged the G20 to come up with an urgent policy response to stuttering growth, echoing a similar call from the International Monetary Fund.

Analysts said that this has helped to push markets higher this week.2:15 pm Coal imports fall: Coal imports have come down in the last one year on the back of higher domestic production of the fossil fuel, the Economic Survey said today.

"Due to higher domestic production, imports have been coming down since last year," as per the Economic Survey 2015-16.

Production of raw coal during April-December was at 447.48 million tonnes compared with 427.27 million tonnes during the corresponding period of the previous year, registering a growth of 4.7 percent, it said.

2:10 pm Exports may pick up soon: India's exports, which are in the negative zone since December 2014, are expected to start picking up from the next fiscal, Economy Survey said today.

The survey, tabled in Parliament, also said that the continuance of low commodity prices globally augurs well for sustaining low trade and current account deficit.

"As such, while export slowdown may continue for a while before picking up in the next fiscal," it said.

2:05 pm Economic Survey: Government has taken steps such as safeguard duty, anti-dumping duty and minimum import price to check surging steel imports, but further protection will impact downstream industries, the Economic Survey said.

On account of an almost "stagnant" steel demand globally, particularly in China, major producers are pushing products into the Indian market, which is leading to a surge in steel imports, said the 2015-16 report card of the economy tabled by Finance Minister Arun Jaitley in Parliament today.

The domestic steel industry, with higher borrowing and raw material costs and lower productivity, is at a comparative disadvantage. To check this, government initiated several measures to curb surging imports and make domestic production sustainable, it added.

Must read - Govt must stick to 3.5% fiscal deficit target; FY17 CAD 1-1.5%2:00 pm Market Check

The market gained nearly 1 percent in afternoon trade after Macro Economic Survey indicated that fiscal deficit target in current financial year is likely to be met. Banks supported on hopes of early recapitalisation.

The 30-share BSE Sensex rose 211.02 points or 0.92 percent to 23187.02 and the 50-share NSE Nifty climbed 64.85 points or 0.93 percent to 7035.45. However, the market breadth remained weak as about 1287 shares declined against 1027 advancing shares on the BSE.State Bank of India gained more than 3.5 percent and Coal India surged 4 percent followed by HDFC Bank, L&T, Hindalco, Axis Bank and NTPC with 2-3 percent upside.Lupin, Bajaj Auto, Hero Motocorp and Bharti Airtel fell 1-3 percent.