Benchmarks continue to trade in green in late morning session

After getting a gap-up start, benchmark equity indices continued to trade in fine fettle in late morning deals on sustained buying by funds and retail investors after the Reserve Bank of India (RBI) relaxed the financing norms for infrastructure development and affordable housing. Sentiment on the street also improved after India’s services exports in May rose by 8.8 percent to $13.9 billion. However, gains remained capped on report that foreign portfolio investors (FPIs) sold shares worth a net Rs 3.40 crore on July 15, 2014.

Most of the sectoral indices were trading in green while a mild weakness in Consumer Durables stocks was visible. Metal stocks have witnessed value buying on the back of encouraging economic data from China. In scrip specific development, Pantaloons Fashion & Retail has surged after the company announced the fund raising plans including rights issue. Further, BF Utilities was trading 7% higher extending its past two-day rally on BSE after the company said its shareholders approved the proposal of raising up to Rs 500 crore via issue of equity shares.

On global front, Asian stocks swung between gains and losses after China reported economic growth that was just ahead of market expectations. While, the US markets made a mixed closing of the volatile day of trade, as traders focused on remarks by Federal Reserve Chair Janet Yellen, who said that the economy continues to improve but cautioned that the recovery is not yet complete. Back home, Bajaj Finance, Bajaj Finserv, CMC, The Federal Bank, Kotak Mahindra Bank, Lakshmi Vilas Bank and South Indian Bank will be in focus on account of June quarter earnings later in the day. The market breadth on BSE was positive, out of 2170 stocks traded, 1432 stocks advanced, while 662 stocks declined on the BSE.

The BSE Sensex is currently trading at 25314.21 up by 85.56 points or 0.34% after trading in a range of 25377.99 and 25284.30. There were 20 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.82%, while Small cap index gained 1.11%.

The gaining sectoral indices on the BSE were Realty up by 1.86%, Bankex up by 1.05%, Healthcare up by 0.85%, Auto up by 0.78% and Oil & Gas up by 0.50%. On the flip side, Consumer Durables down by 0.18% was the only losing Index on BSE.    

The top gainers on the Sensex were ICICI Bank up by 2.98%, Hindalco up by 1.98%, SBI up by 1.63%, Hindustan Unilever up by 1.32% and Hero MotoCorp up by 1.25%. On the flip side, HDFC down by 1.98%, Gail India down by 1.31%, Coal India down by 0.31%, SSLT down by 0.76% and Bajaj Auto down by 0.60% were the top losers on the BSE.

Meanwhile, in a move that would bring down fixed-line broadband tariffs, the Telecom Regulatory Authority of India (TRAI) has reduced the ceiling rates of dedicated broadband lines, called as DLCs, by up to 60%. The revised tariff regime for domestic leased circuits (DLCs) will come in to effect from 1 August, 2014.

With this, maximum rate, on 2 mbps leased line having length between 5 km to 500 km, called long distance band, will stand reduced from Rs 8.5 lakh per annum to Rs 3.41 lakh per annum. Similarly for leased connection on long distance band having capacity of 45 mbps the new ceiling tariff too has been lowered by 57% to Rs 26.54 lakh from Rs 61.59 lakh per annum, while for 155 mbps new rate has come down to Rs 58 lakh per annum. However, no changes have been made in annual rentals of leased circuit lines having capacity of 622 mbps.

For low distance band which is less than 5 km for 2 mbps line, Trai has reduced ceiling tariff by 29% to Rs 12,086 per annum. In same band, which is less than 50 km for others, ceiling has been lowered on 45 mbps line by 12% to Rs 5.84 lakh and 10% on 155 mbps to Rs 16.1 lakh per annum. 

The real impact of this move would be felt in remote areas, where competition levels are not intense. In cities such as Delhi and Mumbai, leased lines already come with massive discounts, especially for large-volume customers. However, on the routes connecting small cities, remote and hilly areas, the prevailing tariffs for leased circuits continue to remain near the ceiling tariffs prescribed earlier by TRAI.

This move which is unlikely to have any revenue impact on private telecom companies, may hit BSNL, which widely caters to this market, its 600,000 km optical fibre network.

The CNX Nifty is currently trading at 7,550.45 up by 23.80 points or 0.32% after trading in a range of 7,571.35 and 7,540.35. There were 33 stocks advancing against 17 declining on the index.

The top gainers of the Nifty were IDFC up by 4.50%, ICICI Bank up by 2.85%, DLF up by 1.95%, Hindalco up by 1.77% and SBI up by 1.55%. On the flip side, HDFC down by 2.04%, SSLT down by 1.14%, GAIL down by 1.05%, Coal India down by 0.80% and NMDC down by 0.79% were the top losers on the index.

Asian markets were trading mostly in the green; Nikkei 225 up by 0.06%, Hang Seng increased by 0.11%, Straits Times spurted by 0.27%, KOSPI Index up by 0.05%, Jakarta Composite gained 1.04% and Shanghai Composite was up by 0.04%. On the flip side, FTSE Bursa Malaysia KLCI slipped by 0.09% and Taiwan Weighted was down by 0.92%.