Benchmarks trim losses; trade gyrates around neutral line

Indian equity markets trim losses and started hovering near the neutral line in the late afternoon session on account of buying in frontline blue chip counters. Traders were seen piling positions in IT, Bankex and Capital Goods stocks while selling was witnessed in Oil & Gas, Realty and FMCG sector stocks. In scrip specific development, Jindal Steel and Power was trading in green after the Delhi High Court stated that the government’s decision to cancel the bid of Jindal Power (JPL) for two Chhattisgarh coal mines by annulling the tender process and allotting them to Coal India is prima facie wrong. Idea Cellular was trading in red on spectrum debt, the company’s total spectrum bid stood at about Rs 30,100 crore, due to which its standalone net debt jumped by 70% to nearly Rs 18,500 crore after auction payouts.

On the global front, the Asian markets were trading mostly in red while the European markets were trading mostly on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading below the psychological 8,350 and 27,500 levels respectively. The market breadth on BSE was negative in the ratio of 885:1797 while 108 scrips remained unchanged.

The BSE Sensex is currently trading at 27470.38, up by 12.80 points or 0.05% after trading in a range of 27248.45 and 27694.41. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.45%, while Small cap index down by 0.54%.

The gaining sectoral indices on the BSE were IT up by 0.79%, Bankex up by 0.70%, Capital Goods up by 0.58% while, Oil & Gas down by 1.26%, Realty down by 1.17%, FMCG down by 1.11%, INFRA down by 1.11%, Power down by 0.54% were the losing indices on BSE.

The top gainers on the Sensex were Infosys up by 2.74%, SBI up by 2.36%, ICICI Bank up by 2.08%, Hindalco up by 1.73% and Larsen & Toubro up by 1.67%. On the flip side, Bharti Airtel down by 5.19%, BHEL down by 2.83%, Wipro down by 2.40%, Dr. Reddy’s Lab down by 2.16% and Reliance Industries down by 1.72% were the top losers.

Meanwhile, in an encouraging development for the economy, rating agency Moody's termed high bids received in spectrum auction as 'credit positive' for India, citing that the proceeds from the sale of airwaves will help the government meet its fiscal deficit target. The rating agency highlighted that this development will be credit positive for the sovereign in the near term, particularly since tax revenue receipts have been lacklustre this fiscal year.

Moody’s however expects government to implement a variety of measures to meet its fiscal deficit targets this year and next. In the Union Budget 2015, which was Modi’s government first fully fledged budget, fiscal deficit target for 2014-2015 was pegged at 4.1% of GDP and 3.9% for the next fiscal.

In its report, Moody’s pointed that this development would have indirect sovereign impact, through the banking system from the increase in firms' leverage related to the bids. It cautioned that several other factors will play a role in determining the impact of such leverage on the system, including the sector's growth and profitability and hence, termed this as an indirect issue from the sovereign perspective.

After 19 days of fierce bidding, the government raked in a record bounty of nearly Rs 1.10 lakh crore in the country's biggest auction of telecom spectrum that ended on Wednesday. This is highest ever in history of India. The spectrum auction conducted in 2010 brought about Rs 106,000 crore which included Rs 30,000 crore payments. Lastly, depending on the band, carriers will have to pay as much as 33 percent of their final bid within 10 days of the auction's conclusion and the rest in 10 annual installments starting in 2017.

The CNX Nifty is currently trading at 8325.30, down by 16.85 points or 0.20% after trading in a range of 8269.15 and 8413.20. There were 17 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were Infosys up by 2.46%, IDFC up by 2.16%, SBI up by 2.10%, ICICI Bank up by 1.87% and Hindalco up by 1.78%. On the flip side, Bharti Airtel down by 5.84%, Idea Cellular down by 4.90%, Cairn India down by 2.67%, Asian Paints down by 2.66% and HCL Tech. down by 2.65% were the top losers.

The Asian markets were trading mostly in red; Nikkei 225 decreased 185.49 points or 0.95% to 19,285.63, Taiwan Weighted decreased 115.4 points or 1.2% to 9,503.72, Hang Seng decreased 10.88 points or 0.04% to 24,486.20, FTSE Bursa Malaysia KLCI decreased 2.98 points or 0.16% to 1,815.44 and KOSPI Index decreased 2.76 points or 0.14% to 2,019.80.

On the other hand, Shanghai Composite increased 9 points or 0.24% to 3,691.10, Jakarta Composite increased 11.43 points or 0.21% to 5,380.23 and Straits Times increased 18.3 points or 0.53% to 3,449.89.

The European markets were trading mostly in green; France’s CAC increased 28.68 points or 0.57% to 5,035.03, Germany’s DAX increased 94.35 points or 0.8% to 11,938.03 and UK’s FTSE 100 decreased 5.09 points or 0.07% to 6,890.24.