Sensex up 200 pts, Nifty strong; YES Bank gains, TVS Motor down

Moneycontrol Bureau12:58 pm Market Update: Equity benchmarks extended rally with the Sensex rising 263.81 points or 1.08 percent to 24733.38 and the Nifty climbing 91.10 points or 1.23 percent to 7515.75. About 1440 shares have advanced while 904 shares declined on the BSE.12:45 pm Rate cut possible?: The Reserve Bank of India is approaching the end of its rate-cutting cycle and is expected to go for a final 25-bps repo rate cut at its policy review meet on February 2.According to the global financial services major, a rate reduction is likely as inflation may be in line with RBI's January 2016 under-6 percent target."We continue to expect a final 25 bps RBI repo rate cut on February 2. That said, RBI is approaching the end of its rate-cutting cycle," Bank of America Merrill Lynch said in a research note.BofA-ML sees "compelling reasons" for a rate cut on Tuesday. First, inflation print could be in the comfort zone of RBI in the near term. Second, growth remains weak and a rate cut would provide an additional impetus to the fledgling recovery.

12:35 pm Earnings estimates: Larsen and Toubro's (L&T) third quarter profit is expected to increase 21 percent year-on-year to Rs 1,050 crore despite lower operating profit margin, according to analysts polled by CNBC-TV18. Lower depreciation and interest cost may support bottomline but hydrocarbon and heavy engineering business may dent profitability. Earnings will be announced on January 29.

Revenue is seen rising 11 percent to Rs 26,470 crore in quarter ended December 2015 compared to Rs 23,848 crore in year-ago period, driven by infrastructure business.

Company's full year order inflow guidance is an important factor to watch out for. Analysts expect guidance to reduce further for the quarter.12:20 pm Oil Update: Global benchmark Brent crude futures rose, set for a second weekly gain, moving 6.5 percent higher so far this week, spurred higher by hopes of a deal among oil-producing countries to tackle a growing supply glut.

Brent futures have jumped over 25 percent since hitting an intraday low of USD 27.10 a barrel on January 20 and are heading for their fourth straight session of gains.

Brent rose 2.1 percent to USD 34.60 a barrel and US crude climbed 1.8 percent to USD 33.80 a barrel.Also read - See ICICI Bank RoA @1.6% for FY17; stressed assets a worry: Pros12:00 pm Market Check: The market maintained its strong uptrend in noon trade with the Sensex rising 214.90 points or 0.88 percent to 24684.47. The Nifty climbed 78.30 points or 1.05 percent to 7502.95 driven by HDFC twins, oil, infra and FMCG stocks.

The broader markets also gained with the BSE Midcap and Smallcap indices rising 1 percent and 0.6 percent, respectively. The broader markets remained positive as about 1336 shares advanced against 914 declining shares on the BSE.YES Bank surged 5 percent after stellar performance in Q3 with profit rising 25 percent and net interest income jumping 27.3 percent year-on-year. TVS Motor declined nearly 2 percent after lower than expected earnings during October-December period.