Sensex, Nifty end flat; IT index gains 2%, ITC & Cipla fall 3%

Moneycontrol Bureau3:30 pm Market closing: Spurt in late trade selling dragged market at closing. After a volatile day, the market ended in red. The Sensex ended down 5.94 points at 26298.69 and the Nifty was up 3.15 points at 8111.60. The 50-share index had briefly felll below 8100 in last minute of trade. About 1058 shares have advanced, 1545 shares declined, and 151 shares are unchanged.

Asian Paints, TCS, Maruti, HDFC and Bajaj Auto were gainers where ITC slipped 4 percent. Cipla, Sun Pharma, Dr Reddy's Labs and Lupin are losers in the Sensex.

3:00 pm Tobacco woes: The Union Cabinet is likely to soon consider a proposal to completely ban foreign direct investment (FDI) in the tobacco sector.

Government has been working on this proposal after tightening norms regarding pictorial warnings on cigarette packets.

The Commerce and Industry Ministry has forwarded the final cabinet note for the Cabinet's consideration, sources told PTI.

"Views of all the concerned ministries, including Health and Finance Ministry was included in the note," they said.

Currently, FDI is permitted in technology collaboration in any form, including licensing for franchise, trademark, brand name and management contracts in the tobacco sector. However, it is prohibited in manufacturing of cigars, cigarettes of tobacco and tobacco substitutes.2:30 pm Black money: As debate on demonetisation rages on across the nation, Finance Minister Arun Jaitley has changed his facebook cover photo which states that India can no longer live with black money.

Integrity and ethical conduct are pre-requisites for the country's development, he states.

"India cannot afford to live with black money any longer. Honesty, integrity and ethical conduct are requirements of India's development," said Jaitley's facebook cover photo.

With opposition ganging up over demonetisation of 500 and 1,000 rupee notes, the government has been maintaining that the move was needed to eliminate black money, counterfeit notes and terror financing.

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The Sensex is up 101.76 points or 0.4 percent at 26406.39 and the Nifty is up 32.35 points or 0.4 percent at 8140.80. About 1190 shares have advanced, 1295 shares declined, and 147 shares are unchanged.

TCS, Asian Paints, Maruti, Bajaj Auto and Infosys are top gainers while Dr Reddy's Labs, Cipla, Lupin, ITC and ICICI Bank are losers in the Sensex.

European stocks opened higher as the US dollar paused for breath after a rally that has been driven by a rise in bond yields following Donald Trump's victory in the presidential election.

Traders continue to watch Trump's economic policies closely for clues on the outlook for interest rates. The Republican has said that he planned to spend on infrastructure and cut taxes to stimulate the economy. Increased fiscal stimulus could have an impact on the Federal Reserve's interest rate hiking path.

The rise in inflation expectations that followed Trump's win sparked a sell-off in bonds and pushed the dollar higher.