Benchmarks extend gains; trade near intra-day high levels

Indian equity benchmarks extended early gains to continue firm trade in late morning session, hovering near intra-day high levels on sustained buying by funds and retail investors after RBI’s rate cut last week coupled with encouraging Q3 earnings by some blue-chip companies. Besides, a firming global trend in anticipation of the European Central Bank launching fresh stimulus also has a positive impact on the domestic market. At present, Sensex and Nifty were trading above the crucial 28,400 and 8,550 levels respectively, with gains of over 0.50%.  Apart from blue chips, broader indices too equally participated in the rally with both mid cap and small cap indices were trading up by over 0.80%.

Sentiments got a boost as United Nations, in its latest World Economic Situation and Prospects 2015 (WESP) report, has highlighted that Indian economy is likely to grow at 5.9% this year and 6.3% in 2016. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 433.72 crore on January 19, 2015.

On global front, Asian stock markets traded higher, with sentiment supported by China's fourth quarter gross domestic product which beat expectations to come in at 7.3 percent from the year-ago period. Back home, Slipping from over two-month high, Indian rupee shed 6 paise to 61.77 a dollar in early trade as the US currency strengthened overseas.

Back on street, stocks from Metal, Realty and Banking counters were supporting the markets’ uptrend, while those from Capital Goods counters were adding to the underlying cautious undertone. In scrip specific development, shares of Suven Life Sciences have surged after the company has been granted product patents by Australia, Hong Kong and Japan, for drug used in the treatment of neurodegenerative diseases. Furthermore, CCL Products rose after reporting a strong 52% year on year jump in consolidated net profit at Rs 26.11 crore for the third quarter ended December 31, 2014. 

The market breadth on BSE was positive, out of 2407 stocks traded, 1503 stocks advanced, while 805 stocks declined on the BSE. 

The BSE Sensex is currently trading at 28416.36, up by 154.35 points or 0.55% after trading in a range of 28324.85 and 28431.19. There were 21 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.83%, while Small cap index up by 0.90%.

The gaining sectoral indices on the BSE were Metal up by 1.69%, Realty up by 0.84%, Bankex up by 0.83%, PSU up by 0.69% and Oil & Gas up by 0.45%, while Capital Goods down by 0.02% was the only losing index on BSE.

The top gainers on the Sensex were Tata Steel up by 2.39%, Hindalco up by 2.35%, Sesa Sterlite up by 1.99%, Axis Bank up by 1.81% and SBI up by 1.61%. On the flip side, GAIL India down by 1.93%, Hindustan Unilever down by 1.32%, Dr. Reddys Lab down by 0.48%, Hero MotoCorp down by 0.41% and Maruti Suzuki down by 0.41% were the top losers.

Meanwhile, rejecting Telecom Regulatory Authority of India (TRAI)’s recommendations, the Telecom Commission (TC) approved a base price of Rs 3,705 crore for each MHz of 2,100-MHz spectrum, which would be auctioned on February 25. The approved prices is around 36% higher than the Rs 2,720 crore suggested by TRAI and about 11% higher than what companies paid for the same in 2010 sale. But, the final decision would be taken by the Union Cabinet in its meeting which is scheduled in the coming week.

Further, TC also reiterated its stand of auctioning only 5 MHz of spectrum in the 2,100-MHz band in the coming round, which based on the reserve price, would translate into a total earning of at least Rs 18,500 crore for the government. However, since companies make an upfront payment of 25% of the total, the immediate proceeds from the auction of 2,100-MHz spectrum will come to Rs 4,265 crore, which is more or less in line with the government’s expectation of around Rs 5,000 crore from the band this financial year.

Trai, which had recommended a base price of Rs 3,408 crore per MHz for the previous 3G spectrum auction round in 2010, had reduced the suggested rate by 22% for the coming round of auctioning.

Besides 2,100-MHz, the government would also be auctioning airwaves in the 800-, 900- and 1,800-MHz bands in February, by which it expects to garner a total revenue of Rs 80,000 crore to Rs 1 lakh crore.

The CNX Nifty is currently trading at 8598.50, up by 47.80 points or 0.56% after trading in a range of 8574.50 and 8602.05. There were 38 stocks advancing against 12 stocks declining on the index.

The top gainers on Nifty were Tata Steel up by 2.37%, Hindalco up by 2.35%, Jindal Steel & Power up by 2.14%, Sesa Sterlite up by 2.05% and Cairn India up by 1.90%. On the flip side, GAIL India down by 2.07%, Hindustan Unilever down by 1.25%, Dr. Reddys Lab down by 0.82%, IDFC down by 0.53% and Hero MotoCorp down by 0.45% were the top losers.

Asian markets were trading mostly in the green; KOSPI Index increased 0.73%, Straits Times rose 0.71%, Shanghai Composite surged 1.81%, Taiwan Weighted gained 0.81%, Hang Seng added 0.72% and Nikkei 225 was up by 1.64%. On the flip side, Jakarta Composite decreased 0.45% and FTSE Bursa Malaysia KLCI was down by 0.20%.