Market recovers from the jitters of SC verdict in 2G case

The domestic markets witnessed a jolt on the mid morning trade after the Supreme Court verdict related to 2G scam came, the Apex court has quashed the 122 licences granted in 2008 to eleven telecom companies and the related stocks have suffered sharp correction plunging 5-10 percent after the verdict. TRAI will be making fresh recommendations for the cancelled licences, however the affected companies can use the licences for 4 more months. However, in another critical judgment, the Supreme Court referred the matter of whether the role of former Finance Minister P Chidambaram should be probed back to the trial court. Back on street the markets has once again returned to the normalcy, extending their gaining momentum on the back of some good earnings announcements and gains in the regional peers. All the sectoral indices are trading in green while the Capital goods, power and metal has taken the lead.

The BSE Sensex is currently trading at 17,466.86, up by 166.28 points or 0.96%. The index has touched a high and a low of 17,497.02 and 17,427.37 respectively. There were 26 stocks advancing against just 4 declining ones on the index.

Broader indices too are performing in tandem with the benchmarks; the BSE Mid cap and Small cap indices were up by 0.92% and 1.15% respectively.  

All the sectoral indices on the BSE were in green, Capital Goods (CG) was up by 1.95%, Power up by 1.69%, Metal up by 1.63%, PSU up by 1.37% and IT was up by 1.17%.

The top gainers on the Sensex were Sterlite Industries up by 5.70%, BHEL up by 4.90%, Tata Power up by 3.27%, M&M up by 1.81% and ONGC was up by 1.73%.

On the flip side, Cipla down by 1%, Bajaj Auto down by 0.57%, ITC down by 0.37% and Tata Motors were the only losers on the index.

Meanwhile, India's fiscal deficit for the current financial year is likely to go up by one percentage point, and it is expected to hover around 5.6% as compared to the budgeted 4.6% of gross domestic product (GDP), said Prime Minister’s Economic Advisory Council (PMEAC) panel member M Govinda Rao. 

As per the Controller General of Accounts (CGA) data, the fiscal deficit for the first three quarters (April-December 2011), has already reached 92.3% of the full-year target and it is unlikely that the government will be able to contain it at the budgeted levels. This is mainly due to poor realization of non-tax revenues and also because the government has so far managed to raise only Rs 1,145 crore this fiscal from disinvestment against a target of Rs 40,000 crore. 

Rao's forecast seconds the view expressed by many private economists who had warned that the deficit could overshoot the budgeted target due to slowing growth and weak federal finances. The Centre's fiscal deficit was 45% of the estimates in the same period last year. For the current financial year, the government had estimated a deficit of Rs 4.12 lakh crore, or 4.6% of the GDP.

Till December, the government's tax receipts stood at Rs 4.20 lakh crore, 63.3% of the Budget target for the entire financial year. On the other hand, non-tax receipts were just Rs 78,077 crore, 62.2% of Budget estimates. Likewise, non-debt capital receipts were just Rs 16,858 crore, 30.6% of estimates, against 69.4% in the first three quarters of the last financial year.

The S&P CNX Nifty is currently trading at 5,270.65, up by 34.95 points or 0.67%. The index has touched a high and a low of 5,289.95 and 5,267.60 respectively. There were 38 stocks advancing against 12 declining ones on the index.

The top gainers of the Nifty were Sterlite Inds. up by 5.48%, BHEL up by 4.42%, Ambuja Cements up by 4.11%, Tata Power up by 3.04% and ACC was up by 2.62%.

RCom down by 5.58%, RPower down by 2.36%, Cairn India down by 2.02%, Reliance Infra down by 1.56%, and Cipla down by 1.13% were the major losers on the index.

All the Asian equity indices were trading in green; Shanghai Composite was up by 0.42%, Hang Seng surged by 1.46%, Jakarta Composite added 0.57%, Nikkei 225 gained 0.72%, Seoul Composite was down by 1.17%, Straits Times was up by 0.39% and Taiwan Weighted gained 1.13%.