Benchmarks continue to trade in red in late morning session

Indian frontline equity indices continued to trade sluggish in late morning session; though the selling has got arrested but the damage done in early trade is clearly visible with the benchmark indices still trading lower by over a percentage point. The two-day rally in global markets cooled off today amid fresh concerns about global growth, particularly China's economy. Investors turned jittery after Standard & Poor's downgraded Brazil's credit rating to junk grade earlier today, and slashed its growth forecast for Asian economies.  On domestic front, sentiments remained down-beat after the report that the goods and services tax (GST) is set to miss its April 1, 2016 deadline as Union Cabinet on Wednesday decided not to call a special parliament session to pass the Constitutional Amendment Bill in the wake of stiff opposition from the Congress party. The GST Bill will now be considered in the Parliament's Winter Session.  However, some respite came with the report that Reserve Bank of Indian (RBI) is closely observing the data as well as other macro developments and will go for another round of interest rate cut as and when the situation is conducive. Further, Union Cabinet chaired by the Prime Minister Narendra Modi, has given its approval to permit Foreign Direct Investment (FDI), up to 100 percent, under the automatic route, in the activity of White Label ATM (WLA) Operations.

On the global front, Asian market trading mostly in red after lacklustre Chinese and Japanese economic data added to heightened worries about slackening global growth, sapping investors’ appetite for riskier assets. Also, US stocks ended more than 1 per cent lower on Wednesday after rallying the day before, led by declines in shares of Apple and energy companies, which fell with oil prices. Back home, Indian rupee turned weak in early trade today and fell by 32 paise to 66.73 against the US currency on foreign fund outflows amid appreciation in the US currency overseas.

Back on street, all the sectoral indices were trading negative. Power, Bank, Realty and infrastructure stocks were among the worst hit in the sell-off on the Indian bourses this morning. In scrip specific development, shares of IL&FS Transportation Networks have gained after the company’s wholly owned subsidiary - Amravati Chikli Expressway has inked a concession agreement for development of 4-laning of Amravati-Chikhli (Package-I) section of NH-6 in the State of Maharashtra from Km. 166.000 to Km. 360.000.  On the other hand, Shares of Tata Motors have declined on consistent weakness in Jaguar Land Rover (JLR) August sales. JLR has reported August 2015 retail sales of 29,327 vehicles, down 3 percent year-on-year.

The market breadth on BSE was negative, out of 2022 stocks traded, 479 stocks advanced, while 1490 stocks declined on the BSE.

The BSE Sensex is currently trading at 25382.38, down by 337.20 points or 1.31% after trading in a range of 25287.50 and 25522.96. There were 3 stocks advancing against 27 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.13%, while Small cap index down by 1.42%.

The top losing sectoral indices on the BSE were Power down by 2.17%, Bankex down by 2.12%, Realty down by 2.11%, Infra down by 1.88% and Metal down by 1.71%, while there were no losers on the sectoral space.

The top gainers on the Sensex were TCS up by 0.66%, Coal India up by 0.07% and Sun Pharma up by 0.07%. On the flip side, Hindalco down by 5.03%, Hindustan Unilever down by 3.01%, SBI down by 2.74%, HDFC down by 2.39% and ONGC down by 2.34% were the top losers.

Meanwhile, the government has approved spectrum trading guidelines which will allow telecom players to buy or sell their unutilized spectrum to other operators. This move will improve the quality of services through availability of more spectrum to the telecom operators. Accordingly, for spectrum trading agreements, telecom companies will not require any prior permission from the government but will have to inform 45 days before. The buyer will have to pay 1 per cent trading fee which will be calculated based on market rate or previous auction price whichever is higher.

Under the guidelines if any service provider sells only a part of its spectrum holding in a band, both the buyer and the seller will be required to pay the remaining installments of payment, prorated for the quantum of spectrum held by each of them subsequent to the spectrum trade. Regarding spectrum usage charges (SUC), the seller should clear its SUC and its installment of payment till the effective date of trade. Besides, Spectrum trading will not alter the original validity period of spectrum assignment as applicable to the traded block of spectrum. The seller will clear all his dues prior to entering into any agreement for spectrum trading. Thereafter, any dues recoverable up to the effective date of transfer shall be the liability of the buyer.

A telecom service provider will be allowed to sell the spectrum only after two years from the date of its acquisition through auction or spectrum trading or administratively assigned spectrum converted to tradable spectrum. In case of administratively assigned spectrum converted to tradable spectrum after paying the prescribed market value, the period of two years will be counted from the effective date of assignment of spectrum.

Communications and IT Minister Ravi Shankar Prasad informed that the Cabinet has approved spectrum trading in all the bands and the ownership right will be of government of India. Further, Prasad  said that if it is found during sample checking that the companies are not complying to all the rules in the undertaking, then the government will take strong action and the 'licensee shall not be allowed to trade”. This will also address the non-contiguous spectrum issue and allow telecom operators to offer better services.

The CNX Nifty is currently trading at 7707.70, down by 110.90 points or 1.42% after trading in a range of 7678.50 and 7729.05. There were 3 stocks advancing against 47 stocks declining on the index.

The top gainers on Nifty were BPCL up by 1.79%, TCS up by 0.81% and Sun Pharma up by 0.24%. On the flip side, Hindalco down by 4.77%, Power Grid down by 4.17%, Bank of Baroda down by 3.68%, PNB down by 3.21% and Yes Bank down by 2.88% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 was down by 3.09%, Hang Seng down by 2.26%, Straits Times down by 1.31%, Taiwan Weighted down by 0.37%, Shanghai Composite down by 1.16%, FTSE Bursa Malaysia KLCI down by 0.24% and Jakarta Composite down by 0.44%. On the flip side, KOSPI Index was up by 0.43%.