Benchmarks continue to reel under pressure in noon deals

Indian equity benchmarks are trading in red terrain in noon deals with a cut over half a percent. Frontline gauges are trading below their crucial 25,200 (Sensex) and 7,700 (Nifty) levels as traders remained cautious ahead of derivatives expiry on Thursday. Also, market participants are patiently waiting for the Reserve Bank of India (RBI) monetary policy review due on April 5 amid hopes of a 25 basis points cut in interest rates. Depreciation in Indian rupee too dampened sentiments. The rupee weakened by 8 paise to quote at 66.72 against the dollar in noon deals at the Interbank Foreign Exchange market on month-end demand for the American currency from importers and banks.

Most of the Asian equity indices surrendered their early gains to trade lower at this point of time as investors turned cautious awaiting U.S. economic data and speeches by Federal Reserve officials this week that could signal more interest rate increases than expected. Back home, selling was both brutal and wide-based as none of sectoral indices on BSE were spared. Counters, which featured in the list of worst performers, include realty, metal and consumer durables. The broader indices too were reeling under pressure, while the market breadth on the BSE was negative; there were 836 shares on the gaining side against 1,526 shares on the losing side while 164 shares remain unchanged.

The BSE Sensex is currently trading at 25192.47, down by 145.09 points or 0.57% after trading in a range of 25179.66 and 25432.94. There were 8 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.58%, while Small cap index down by 0.59%.

The top losing sectoral indices on the BSE were Realty down by 2.42%, Metal down by 2.04%, Consumer Durables down by 1.41%, PSU down by 0.56% and FMCG down by 0.56%, while there were no gainers on sectoral indices platform on the BSE.

The top gainers on the Sensex were GAIL India up by 0.69%, Infosys up by 0.52%, Maruti Suzuki up by 0.44%, Adani Ports &Special up by 0.36% and NTPC up by 0.31%. On the flip side, Sun Pharma down by 2.57%, Tata Steel down by 1.86%, ICICI Bank down by 1.84%, Bharti Airtel down by 1.67% and HDFC down by 1.47% were the top losers.

Meanwhile, Department of Telecom (DoT) is looking to commence the auction for spectrum, including in 700 Mhz band, around mid-July, which may fetch the government a whopping Rs 5.36 lakh crore. DoT is expecting Cabinet approval on spectrum price by mid-May and issue notice for auction in June. It will be the biggest-ever auction in terms of value and is more than double the gross revenue of telecom services industry.

The Telecom Regulatory Authority of India (Trai) has suggested a plan for spectrum sale. Trai recommended a record high base price of Rs 11,485 crore per Mhz for the 700 Mhz band. According to the Trai paper, the cost of delivering mobile services in 700 Mhz band is approximately 70 per cent lower than 2100 Mhz frequency, which is widely used for 3G services.

Telecom Commission is meeting on March 28. Apart from spectrum auction the Telecom Commission in its meeting will deliberate upon half a dozen transformative norms for the industry including virtual network operators.

Spectrum is priced on the basis of its efficiency to carry mobile signals and ecosystem of device and equipment available for its usage. In 2016-17, the government expects revenue of Rs 98,995 crore from communication services, which includes proceeds from spectrum auction and other fees levied by the DoT.  Telecom service providers had gross revenue of Rs 2.54 lakh crore in 2014-15.

The CNX Nifty is currently trading at 7682.10, down by 34.40 points or 0.45% after trading in a range of 7676.90 and 7749.40. There were 19 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were Ambuja Cement up by 2.06%, Kotak Mahindra Bank up by 1.77%, BPCL up by 1.20%, Power Grid up by 1.09% and Yes Bank up by 0.98%. On the flip side, Vedanta down by 5.16%, Hindalco down by 3.72%, Sun Pharma down by 2.58%, Tech Mahindra down by 2.56% and Tata Steel down by 2.14% were the top losers.

Asian markets were trading mostly in red; Jakarta Composite declined 58.77 points or 1.22% to 4,768.31, Shanghai Composite decreased 27.03 points or 0.91% to 2,952.41, Taiwan Weighted slipped 14.52 points or 0.17% to 8,690.45, FTSE Bursa Malaysia KLCI shed 5.03 points or 0.3% to 1,698.76 and KOSPI Index was down by 1.27 points or 0.06% to 1,982.54. On the flip side, Nikkei 225 was up by 131.62 points or 0.77% to 17,134.37.