Markets pare some of the early gains; telecom stocks hog the limelight

Markets have slightly pared the early gains garnered in morning trade after the RBI’s surprise rate cut. Though the benchmarks are holding most of their gains near the record high levels and some high beta bluechip stocks are witnessing profit booking otherwise the bourse continue to remain in fine fettle. Apart from the RBI’s rate cut, traders are getting added support of good Services PMI data, activity in India’s services industry expanded at its fastest pace in eight months in February. The HSBC Services Purchasing Managers’ Index (PMI), rose to 53.9 in February from 52.4, it’s highest since June 2014. Back on street, the sectoral indices are now showing a mixed trend, though major of them were maintaining in green, some of them have lost pace. The broader indices too were trading higher by just around a quarter percent. The telecom stocks are in jubilant mood, gaining 2-5% with the beginning of the auctions for spectrum or airwaves for the 800 MHz, 900 MHz, 1800 MHz and 2100 megahertz (MHz) bands. The eight telecom service providers participating are Reliance Communications, Reliance Jio, Bharti Airtel, Vodafone India, Tata Teleservices, Uninor, Idea Cellular and Aircel. Idea cellular was trading up by 4.5%, Bharti Airtel was up by 2.5% and RCom was higher by 3%.

The BSE Sensex is currently trading at 29779.23, up by 185.50 points or 0.63% after trading in a range of 29778.47 and 30024.74. There were 16 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.21%, while Small cap index gained 0.31%.

The top gaining sectoral indices on the BSE were Realty up by 1.70%, FMCG up by 1.13%, Bankex up by 0.72%, INFRA up by 0.55%, Auto up by 0.50%, while Metal down by 0.66%, Oil & Gas down by 0.37%, IT down by 0.23%, and PSU down by 0.15% were the losing indices on BSE.

The top gainers on the Sensex were Sun Pharma Inds up by 6.37%, Bharti Airtel up by 2.44%, ICICI Bank up by 2.04%, HDFC up by 1.82% and Tata Motors up by 1.57%. On the flip side, Hindalco down by 2.59%, Coal India down by 1.28%, Wipro down by 0.84%, Tata Power down by 0.80% and GAIL India down by 0.71% were the top losers.

Meanwhile, Chief Economic Adviser (CEA) Arvind Subramanian underscored that the ambitious 8.1-8.5% economic growth projected for the next fiscal in Finance Minister Arun Jaitley's Budget is more like a 'statistical and not a real number”. The minister highlighted that to achieve a particular growth rate, it was important to estimate tax revenue, which are just not fanciful assumptions, but solid achievable figures.

However, the minister highlighted that the government expects 15.8% growth in revenue collection this year and that this number was very much achievable and that with the growth rate of 8-8.5%, one should view the economy as “recovering economy” and not “surging economy”.

He highlighted that “8.5%” growth figure was 'directionally' fine since there was an uptick in the growth rate from 2013-14 to 2014-15. On being questioned about credibility of the economic growth projection, Finance Minister highlighted the budget was based on projections about nominal GDP growth, which is the sum of real GDP growth and inflation.

Before the (revised) numbers came out, he highlighted that the government was expecting a nominal GDP growth of 11.5%, broadly which was about 6.5% of GDP growth and 4.5% on inflation. However, the minister highlighted that with the release of new numbers though real GDP growth had gone up, the inflation numbers had actually come down. And hence, relevant numbers used for tax revenues and tax revenue projections remained same as before. So in that sense, for the revenue projections the new statistical numbers did not make difference.

Lastly, on bank recapitalization, Subramanian highlighted the government has allocated about Rs 8,000 crore, which has been linked with performance and the government could further dilute 52% its stake if it requires more money.

The CNX Nifty is currently trading at 9042.05, up by 45.80 points or 0.51% after trading in a range of 9041.95 and 9119.20. There were 26 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were Sun Pharma Inds up by 6.35%, Kotak Mahindra Bank up by 2.53%, Bharti Airtel up by 2.28%, ICICI Bank up by 2.05% and DLF up by 1.98%. On the flip side, Hindalco down by 2.93%, Cairn India down by 2.49%, NMDC down by 1.52%, Coal India down by 1.46% and Ambuja Cement down by 1.41% were the top losers.

The Asian markets were showing a mixed trend, FTSE Bursa Malaysia KLCI was up by 1.03 points or 0.06% to 1,822.28, Straits Times gained 5.69 points or 0.17% to 3,427.80, Taiwan Weighted added 15.96 points or 0.17% to 9,621.73 and Shanghai Composite was higher by 18.65 points or 0.57% to 3,281.70.

On the other hand, Nikkei 225 lost 111.56 points or 0.59% to 18,703.60, Hang Seng declined by 59.15 points or 0.24% to 24,643.63, Jakarta Composite lost 15.72 points or 0.29% to 5,458.90 and KOSPI Index decreased by 3.09 points or 0.15% to 1,998.29.