Market manages to hold the gains despite choppiness

Indian markets despite a choppy trade were managing to hold in green in early noon session, extending their last session’s gain. Value buying in scrip specific bluechips was helping the markets to remain in green, while the global cues continue to support the momentum. Though, the trade remained range bound but the S&P BSE Sensex has reclaimed 28,000 mark and Nifty was comfortably sailing over 8500 level. Traders were also getting some support with the gains in the rupee which strengthened against the US dollar on fresh selling of the American currency by exporters. The telecom companies were giving mixed reaction to the report that the government is expected to finalize the much awaited spectrum sharing and trading guidelines in three months. Idea Cellular was down by over 0.50%, while the Bharti Airtel was up by 0.25% and RCom was up by 0.85%. On the sectoral front, most of the sectoral indices were in green with oil & gas surging close to two percent led by recovery in the Reliance Industries.

The BSE Sensex is currently trading at 28074.55, up by 98.69 points or 0.35% after trading in a range of 28026.27 and 28107.11. There were 22 stocks advancing against 8 stocks declining on the index.

The broader indices were once again outperforming the benchmarks; the BSE Mid cap index was up by 0.72%, while Small cap index surged by 1.20%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.96%, PSU up by 1.14%, Metal up by 1.04%, Auto up by 1.01%, Consumer Durables up by 1.00%, while IT down by 0.14%, Capital Goods down by 0.08%, FMCG down by 0.06%, TECK down by 0.06% were the losing indices on BSE.

The top gainers on the Sensex were Tata Power up by 3.22%, GAIL India up by 2.36%, Hindustan Unilever up by 2.01%, Tata Motors up by 1.95% and Reliance Industries up by 1.94%. On the flip side, NTPC down by 1.15%, ITC down by 0.79%, TCS down by 0.48%, HDFC Bank down by 0.44% and Larsen & Toubro down by 0.43% were the top losers.

Meanwhile, the global credit rating agency Moody's Investors Service has red flagged the latest spectrum auction bidders and has said that telecom companies that bid Rs 1,09,784 crore to retain and enhance their spectrum holdings will have to bear higher costs and debt, reduce future expansion and gradually increase tariffs.

In its latest report Moody’s said that high cost is credit-negative for the country's telecom operators because it will increase their debt and costs and reduce their ability to fund future expansion. Elaborating the views, it said that the thousands of crores of rupees invested by the telcos to buy airwaves in the auction that ended on March 25 will limit their ability to make additional investments over the next 12-24 months, which could in turn slow down the rollout of 3G and 4G networks in India.

Moody’s said that though it expects the companies will raise tariffs in an effort to recover their spectrum costs, but the increases will be gradual, leaving the companies' debt levels bloated for some time. For individual companies it retained its Baa3 stable rating for Bharti Airtel and Reliance Communications and said that it expects Bharti Airtel to fund its upfront payment of about Rs 7,832.58 crore and future payments from cash flows rather than additional debt, while for RCOM, which has to pay Rs 1,106.95 crore upfront, it said that cash from operations will not be sufficient to meet funding needs, which include spectrum payments and capital  expenses, over the next 12-18 months.

The CNX Nifty is currently trading at 8523.65, up by 31.35 points or 0.37% after trading in a range of 8499.85 and 8530.60. There were 36 stocks advancing against 14 stocks declining.

The top gainers on Nifty were BPCL up by 3.99%, Tata Power up by 3.70%, GAIL India up by 2.32%, Dr. Reddys Lab up by 2.07% and Reliance Industries up by 2.02%. On the flip side, Ultratech Cement down by 1.68%, NTPC down by 1.42%, Zee Entertainment down by 0.79%, TCS down by 0.73% and HCL Tech. down by 0.69% were the top losers.

Most of the Asian markets were trading in green, FTSE Bursa Malaysia KLCI was up by 5.7 points or 0.31% to 1,827.53, KOSPI Index added 10.99 points or 0.54% to 2,041.03, Jakarta Composite gained 51.65 points or 0.95% to 5,490.30, Taiwan Weighted was up by 64.57 points or 0.68% to 9,586.44 and Hang Seng increased by 84.43 points or 0.34% to 24,939.55.

On the other hand, Nikkei 225 plunged by 204.41 points or 1.05% to 19,206.99, Shanghai Composite lost 7.74 points or 0.2% to 3,778.83 and Straits Times was down by 4.09 points or 0.12% to 3,450.17.