Sensex, Nifty surge 2%; Bajaj Auto up 3% post Q3 results

1:50 pm Bullish stance: Shares of Maruti Suzuki hit record high at Rs 3616.40, up 3 percent intraday. Bank of America Merrill Lynch has raised target price on the auto major to Rs 4100 per share, indicating a 9 percent upside. The brokerage expects Maruti to register 34 percent earnings per share (EPS) CAGR despite lowering earnings forecasts by 6 percent in FY16 and 2 percent in FY17.

"The target price is still premium over past trends due to superior growth on much larger addressable opportunity (including UVs, LCVs) and higher return ratios on account of more liberal dividend payout policy," says the brokerage. It also further adds that that four-wheeler manufacturer will continue gaining share due to better franchise, extensive reach and launches, including foray in segments absent so far.

1:30 pm  Buzzing: Shares of PC Jeweller rallied 10.7 percent intraday after the government allowed the company to directly import precious metals for domestic business. The move would help the company to reduce its cost to buy precious metals, PC Jeweller Managing Director Balram Garg said. In a filing to the BSE, PC Jeweller informed that the "company, has been designated as Nominated Agency under Paragraph 4A.4 of Foreign Trade Policy 2009-14 (RE-2012), by the Additional Director General of Foreign Trade (CLA), Ministry of Commerce & Industry, Department of Commerce."

"This permission makes the company eligible for direct import of precious metals (gold/silver/platinum) for domestic business," it added.

1:20 pm Earnings: Bajaj Auto's net profit fell 4.8 percent year-on-year to Rs 861.2 crore on revenue of Rs 5,657 crore for the quarter ended December 2014. Profit of the two-wheeler maker was supported by better operational performance but was impacted by lower other income.

However, numbers were ahead of street expectations. According to the average of estimates of analysts polled profit was expected at Rs 850 crore on total income of Rs 5,591 crore for the quarter.

Total income from operations during the quarter grew by 10.3 percent to Rs 5,657 crore compared to Rs 5,131 crore in same quarter last fiscal, supported by higher export sales. Other income more than halved to Rs 95.3 crore from Rs 222 crore during the same period.

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The market continues to surge supported by banks, auto and realty stocks. The

Sensex is up 665.49 points or 2 percent at 28012.31 and the Nifty is up 199.75 points or 2.4 percent at 8477.30. About 1596 shares have advanced, 1005 shares declined, and 341 shares are unchanged.

HDFC, ICICI Bank, SBI, M&M and Tata Power are top gainers in the Sensex. Bajaj Auto is up 3 percent after it posted better-than-expected December quarter results.

Crude oil dipped after a volatile session the previous day, when prices rebounded sharply from near-six-year lows that reflected a global oversupply.Jefferies said the use of floating storage would, in the near term, absorb barrels from the market in excess of physical demand, but noted that "those same barrels will eventually be delivered and could moderate a future price recovery".