Benchmarks off day’s high on profit-booking; broader indices follow suite

Off intra-day’s highs, frontline indices have pared substantial portion of their gains as market’s higher level attracted market-participants to en-cash their profits. Nevertheless, the sentiment despite this remains fairly positive on account of persistent buying in index heavyweights such as RIL, HDFC twins and ICICI Bank among others. Both, Sensex and Nifty were holding above the crucial 22,550 and 6750 levels respectively, with gains of over half a percent. Meanwhile, broader indices, following suite too halved their gains and were now trading up in the range of 0.3%-0.65%.

On the global front, Asian shares were trading mostly higher on Tuesday following a pick-up on Wall Street and also as investors await key economic news from around the world later in the week.

Closer home, while stocks from Oil and Gas, PSU and Banking counters outperformed, those from Realty, Capital Goods and Metal counters were the top losers on the index. Gains of Oil & Gas pivotal was led by RIL stocks which was up with gains over half a percent. Reliance Industries (RIL) has asked oil ministry to announce a new natural gas price immediately after polling ends on 12 May, saying this was necessary to avoid irreparable loss to all parties, including the government. The overall market breadth on BSE was in the favour of advances which thumped declines in the ratio of 1090:715; while 54 shares remained unchanged.

The BSE Sensex is currently trading at 22585.47, up by 119.28 points or 0.53% after trading in a range of 22,680.46 and 22,499.10. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices too have pared gains; the BSE Mid cap index was up by 0.65%, while Small cap index up by 0.38%.

The gaining sectoral indices on the BSE were Oil and Gas up by 1.39%, PSU up by 0.98%, Bankex up by 0.81%, Auto up by 0.70%, FMCG up by 0.43% and Healthcare up by 0.35%. While, Realty down by 0.56%, Capital Goods down by 0.29%, Metal down by 0.26%, IT down by 0.10% and TECK down by 0.02% were top losing indices on BSE.   

The top gainers on the Sensex were Gail India up by 2.49%, Dr Reddy’s Lab up by 2.23%, M&M up by 1.64%, Tata Motors up by 1.54% and ONGC up by 1.52%. On the flip side, Tata Power down by 2.29%, Hindalco Industries down by 1.49%, Bajaj Auto down by 1.45%, Sun Pharma down by 1.13% and SSLT down by 0.89%.

Meanwhile, providing relief after almost two years to telcos, Bharti Airtel, Vodafone and Idea Cellular, the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) allowed the 3G intra-circle roaming (ICR) agreements signed between the three companies, stating that the pacts didn't violate any license conditions. Besides, the tribunal also quashed the cumulative penalty of Rs 1,200 crore imposed on them by Department of Telecom (DoT).

The tribunal opined that denial to such roaming pacts will result in under-utilization of 3G spectrum, which would not be in national interest. Thus, with this development, the operators will be allowed to use each others' 3G spectrum in circles, where they do not have 3G airwaves, allowing them to offer their subscribers seamless 3G access across India.

The three operators won 3G spectrum in 2010 auction. While, Airtel won 3G spectrum in 13 out of 22 telecom service area for a sum of Rs 12,295.46 crore, Vodafone and Idea Cellular bagged 9 and 11 circles for Rs 11,617.86 crore and  Rs 5,768.59 crore respectively.

However, DoT, on December 23, 2011 issued notice to Airtel, Vodafone and Idea barring these companies from providing 3G ICR within 24 hours and report compliance, but the order was challenged by telecom operators. Post to which, in July 2012, TDSAT gave split verdict where one of the bench members ruled in favour and other member ordered against it on account of which DoT again issued notice to telecom operators asking them to stop 3G ICR service along with penalty cumulatively amounting to about Rs 1,200 crore which was quashed by the tribunal.

Refusing to relent, the operators then approached Delhi High Court (HC) which ruled in favour of DoT's decision to hold the 3G roaming pact of the telecom major as illegal. Telecom operators then moved the Supreme Court against order of HC and sought that the case be transferred to TDSAT.

According to the 3G ICR agreements entered into by the three telcos, Airtel sought access to Vodafone's 3G network in four service areas- Maharashtra, Kolkata, Haryana and UP East. Vodafone accessed six 3G circles of Airtel- Assam, Bihar, Karnataka, North East, Rajasthan and UP West, besides 7 circles of Idea Cellular- Andhra Pradesh, Himachal Pradesh, Jammu and Kashmir, Kerala, Madhya Pradesh, UP West and Punjab. Idea is yet to start 3G service in Punjab. Idea Cellular, on its part, secured the right to provide 3G services using Vodafone's network in Delhi, Tamil Nadu, Chennai and Kolkata.

The CNX Nifty is currently trading at 6,750.55, up by 35.30 points or 0.53% after trading in a range of 6,780.15 and 6,723.65. There were 31 stocks advancing against 19 declining on the index.

The top gainers of the Nifty were Gail up by 2.59%, Dr Reddy’s Lab up by 2.32%, Asian Paints up by 2.23%, PNB up by 1.98% and Bank of Baroda up by 1.85%. On the flip side,  Tata Power down by 2.41%, DLF down by 2.11%, Hindalco Industries down by 1.28%, Bajaj Auto down by 1.27%, and SSLT down by 1.13% were the major losers on the index.

Asian equity indices were trading mixed; Straits Times was up by 0.85%, Shanghai Composite up by 0.26%, Jakarta Composite up by 0.36%. While, Hang Seng declined by 0.26%, Taiwan Weighted dropped 0.91% and Nikkei 225 down by 0.11%.