Benchmarks extend losses; trades near the lowest point of the day

Indian equity benchmarks extended their weak trade hovering near the lowest point of the day in the late afternoon session on account of selling in frontline blue chip counters. Investors have started eyeing the Reserve Bank of India (RBI) monetary policy review which is scheduled on April 5 amid hopes of a 25 basis points cut in interest rates. The market is likely to witness increased volatility this week on account of expiry of derivative contracts of March series on Thursday. Traders were seen piling up position in Oil & Gas stocks while selling was witnessed in Metal, Realty and Consumer Durables sector stocks. In scrip specific development, Natco Pharma was trading under pressure after the company on Sunday received minor observations by US Food & Drug Administration (USFDA) following recent inspections at its two facilities. On the other hand, GVK Power & Infrastructure were trading in green on divestment of 33 percent shareholding in Bangalore International Airport.

On the global front, the Asian markets were trading mostly in red, while the European markets are closed on account of ‘Easter Monday’ holiday. Back home, the NSE Nifty and BSE Sensex were trading below the psychological 7,650 and 25,100 levels respectively. The market breadth on BSE was negative in the ratio of 713:1828 while 154 scrips remained unchanged.

The BSE Sensex is currently trading at 25076.82, down by 260.74 points or 1.03% after trading in a range of 25069.85 and 25432.94. There were 6 stocks advancing against 24 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.17%, while Small cap index down by 1.14%.

The gaining sectoral indices on the BSE were Oil & Gas up by 0.04% while, Metal down by 3.76%, Realty down by 3.25%, Consumer Durables down by 2.96%, Bankex down by 1.50%, Capital Goods down by 1.04% were the losing indices on BSE.

The top gainers on the Sensex were GAIL India up by 0.74%, Infosys up by 0.71%, NTPC up by 0.67%, Dr. Reddy’s Lab up by 0.30% and ONGC up by 0.09%.

On the flip side, Tata Steel down by 5.42%, SBI down by 3.89%, Sun Pharma down by 3.77%, ICICI Bank down by 3.31% and Tata Motors down by 3.04% 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 7648.95, down by 67.55 points or 0.88% after trading in a range of 7641.90 and 7749.40. There were 15 stocks advancing against 35 stocks declining on the index.

The top gainers on Nifty were Ambuja Cement up by 2.08%, Bosch up by 1.61%, Kotak Mahindra Bank up by 1.32%, BPCL up by 1.12% and Idea Cellular up by 0.91%.

On the flip side, Vedanta down by 8.11%, Hindalco down by 7.34%, Tata Steel down by 5.22%, Sun Pharma down by 3.78% and ICICI Bank down by 3.25% were the top losers.

The Asian markets were trading mostly in red; Hang Seng decreased 269.62 points or 1.31% to 20,345.61, Jakarta Composite decreased 61.64 points or 1.28% to 4,765.45, Shanghai Composite decreased 21.61 points or 0.73% to 2,957.82, Taiwan Weighted decreased 14.52 points or 0.17% to 8,690.45, FTSE Bursa Malaysia KLCI decreased 2.74 points or 0.16% to 1,701.05 and KOSPI Index decreased 1.27 points or 0.06% to 1,982.54.

On the other hand, Nikkei 225 increased 131.62 points or 0.77% to 17,134.37. European markets were closed on account of ‘Easter Monday’ holiday.