Markets continue to trade comfortably in positive terrain; Nifty floats above 8350 level

Recovering from day’s low, benchmark equity indices were holding into positive territory with gains of around two tenths of a percent, which lifted both Sensex and Nifty higher above psychologically crucial 27,850 and 8,350 levels respectively. Meanwhile, broader indices, outperforming larger counterparts, were trading with gains of around a percent. However, prevailing cautiousness ahead of the release of key macroeconomic data, i.e, consumer price index (CPI)-based inflation and Index of Industrial Production (IIP) data on Friday, kept the gains in check. While, the street expects CPI inflation to be around 4.4% in November compared with 5.52% in October, IIP is expected to grow 2.7% in October compared with 2.5% in September. Markets will also be watching trade deficit data for November which can be announced any time this month.

On the global front, most of the Asian pacific shares were mostly holding higher after data from both China and Japan pointed to continued weakness in the world's second and third-largest economies. Japan's benchmark Nikkei 225 slipped over 2% after a government survey showed deterioration in business sentiment in the current quarter, especially among smaller companies, while China’s consumer price index rose 1.4 percent in November, the slowest pace in five years, and a sign of weak domestic demand.

Closer home, most of the sectoral indices on BSE were holding in green, with an exception being stocks from FMCG, Healthcare and Capital Goods counters were the notable losers. On the flip side, stocks from Power, PSU and banking counters were the top gainers.  Metal companies, which fell the most in yesterday's trade also were witnessing some buying.

In stock-specific activity, shares of jewellery maker such as Gitanjali Gems, Tribhovandas Bhimji Zaveri (TBZ), PC Jeweller, Rajesh Exports and Titan Company were trading higher by up to 7% in otherwise subdued market on reports that the government may change gold-import rules for trading houses. Reports also suggest that the government could change rules last year mandating that all imports be paid fully with cash margins. Additionally, insurance stocks too were buzzing in trade after reports suggested that Congress has dropped its opposition to the insurance bill with the select committee of Rajya Sabha proposing an increase in the foreign equity investment to 49% from the present 26%, paving the way for possible passage of the 10-year-old reform legislation during the current session.

Besides, telecom stocks also were mostly holding higher, with an exception of Idea Cellular shares, even after Inter-ministerial panel Telecom Commission has recommended 23% higher base price for the premium 900 MHz frequency band and 17% base price for CDMA band than price recommended by telecom regulator, TRAI. The overall market breadth on BSE was in the favour of advances which thumped declines in the ratio of 1561:1050; while 94 shares remained unchanged.

The BSE Sensex is currently trading at 27856.61, up by 59.60 points or 0.21% after trading in a range of 27710.03 and 27905.25. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.91%, while Small cap index up by 0.90%.

The gaining sectoral indices on the BSE were INFRA up by 1.16%, Power up by 1.10%, Bankex up by 0.96%, Consumer Durables up by 0.96% and PSU up by 0.90% while, FMCG down by 0.48%, Capital Goods down by 0.10% and IT down by 0.02% were the losing indices on BSE.

The top gainers on the Sensex were Tata Power up by 2.63%, ONGC up by 2.17%, Sesa Sterlite up by 2.04%, SBI up by 1.86% and Hero MotoCorp up by 1.37%. On the flip side, Sun Pharma Inds. down by 1.35%, Bajaj Auto down by 1.33%, ITC down by 0.89%, GAIL India down by 0.81% and Hindustan Unilever down by 0.73% were the top losers.

Meanwhile, in yet another trouble for Telecom industry, Inter-ministerial panel Telecom Commission has recommended a base price of Rs 3,693 crore per megahertz for the premium 900 MHz frequency band, which is 23% higher than the price recommended by telecom regulator, TRAI for the spectrum auction in February.

Further, the commission has finalized a base price of Rs 3,646 crore per Mhz for CDMA band, nearly 17% higher than the price suggested by TRAI. Telecom regulator had recommended that base price for 900 Mhz band price be kept at Rs 3,004 crore per Mhz, for 1800 Mhz at Rs 2,138 crore and for CDMA spectrum at Rs 3,104 crore.

With this development, the recommended base prices now would be placed before Telecom Minister Ravi Shankar Prasad for final approval and after that Cabinet might be approached for certain issues.

Auction of spectrum in 900 Mhz band would be held for 18 telecom circles and buying one Mhz in each of these circles would cost Rs 3,693-crore to the bidder. Similarly, spectrum in 1800 Mhz band is being auctioned in 20 circles while 800 Mhz band (CDMA) spectrum is on pan-India basis.

In the 900 Mhz band about 184 Mhz of spectrum is likely to be auctioned, while in 1800 Mhz, the government has proposed to auction 104 Mhz of spectrum which would include spectrum held by licences that are expiring in 2015-16 and unsold airwaves in February auction.

The CNX Nifty is currently trading at 8361.40, up by 20.70 points or 0.25% after trading in a range of 8317.00 and 8373.65. There were 32 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were Jindal Steel & Power up by 3.51%, Tata Power up by 2.52%, PNB up by 2.43%, ONGC up by 2.29% and Sesa Sterlite up by 2.02%. On the flip side, NMDC down by 2.46%, Tech Mahindra down by 1.69%, Bajaj Auto down by 1.53%, Sun Pharma Industries down by 1.23% and BPCL down by 1.19% were the top losers.

Asian markets were trading mostly higher; with Straits Times trading higher by 13.38 points or 0.4% to 3,333.22; FTSE Bursa Malaysia KLCI gaining by 16.66 points or 0.96% to 1,754.76; Jakarta Composite advancing by 20.58 points or 0.4% to 5,142.89; Shanghai Composite rising by 89.19 points or 3.12% to 2,945.46 and Hang Seng spurting by 138.35 points or 0.59% to 23,624.18.

On the flip side, Nikkei 225 declined by 400.8 points or 2.25% to 17,412.58; Taiwan Weighted slid by 96.74 points or 1.06% to 9,032.16 and KOSPI Index shed 25.39 points or 1.29% to 1,945.56.