Post Session: Quick Review

Indian equity benchmarks ended the choppy day of trade with a cut of around half a percent on Wednesday owing to persistent selling by the FIIs amid weakness in global peers. Markets tried to regain green terrain couple of time but effort went in vain and key gauges ended in red with key gauges somehow managing to hold their crucial 7,700 (Nifty) and 25,100 (Sensex) levels. Sentiments remained down-beat after growth in India’s services firms fell to a four-month low of 53.7 in April from 54.3 in March on the back of new business growing slower than the previous months.

Sentiments also remained dampened on report that private sector activity in the country eased in April amid slower expansion in new business inflows in services sector while order books at manufacturers also broadly stagnated, adding to the clamour for further interest rate cuts by Reserve Bank. Meanwhile, the International Monetary Fund (IMF) Regional Economic Outlook for Asia and Pacific has said that structural reforms, including GST and in areas like land and labour, will be key to boost India's economic growth potential going forward. Though, IMF has retained its growth forecast for India this year at 7.5 percent.

Global cues too remained sluggish as disappointing manufacturing surveys from China and the UK, combined with downgrades to growth and inflation forecasts from the European Commission weighed down sentiments. European markets have made a weak start with CAC, DAX and FTSE were trading with a cut of around half a percent. Asian stocks fell for a sixth day, their longest losing streak since February, as anxiety over the health of the global economy unnerves investors.

Back home, depreciation in Indian rupee too soured investor mood. The rupee weakened 22 paise to 66.64 against the US dollar at the time of equity markets closing at the Interbank Foreign Exchange market on increased demand for the American currency from importers and banks. Selling in metal and mining stocks too dampened sentiments as copper prices declined in global commodities markets.

Telecom stocks too edged lower despite a Parliamentary panel saying that government targets revenue of Rs 64,580.92 crore in the current financial year from spectrum auction proceeds. On the flip side, stocks related to aviation counter edged higher despite report that after ATF price hike, the government is set to hold talks with domestic airlines to cap airfares on short routes during natural calamities or unpredictable situations.

The NSE’s 50-share broadly followed index Nifty declined by over forty points but managed to hold its psychological 7,700 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex declined by over one hundred and twenty points to end below its crucial 25,200 mark. Broader markets too struggled to get any traction and ended the session with a cut of over a percent.

The market breadth remained in favor of decliners, as there were 792 shares on the gaining side against 1,777 shares on the losing side while 118 shares remain unchanged. (Provisional)

The BSE Sensex ended at 25,101.73, down by 127.97 points or 0.51% after trading in a range of 25061.04 and 25245.70. There were 11 stocks advancing against 19 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 1.25%, while Small cap index down by 1.02%. (Provisional)

The lone gaining sectoral index on the BSE were IT up by 0.23%, while Metal down by 3.48%, Industrials  down by 2.80%, Realty down by 2.22%, Basic Materials down by 2.08% and Auto down by 2.02% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were HDFC up by 2.77%, NTPC up by 1.32%, HDFC Bank up by 0.91%, Infosys up by 0.74% and Sun Pharma up by 0.58%. On the flip side, Adani Ports &Special down by 12.21%, Tata Motors down by 6.48%, Tata Steel down by 5.50%, BHEL down by 4.02% and ICICI Bank down by 3.41% were the top losers. (Provisional)

Meanwhile, the government has targeted revenue of Rs 64,580.92 crore in the current financial year 2016-17 from spectrum auction proceeds. The standing Committee on Information Technology in its report has said that for the year 2016-17, the Ministry of Finance has set the target of Rs 98,994.93 crore, which is inclusive of 64,580.92 crore as spectrum auction revenue.

Recently, the inter-ministerial panel Telecom Commission chaired by telecom secretary JS Deepak  has agreed to base prices of various frequency bands recommended by the regulator Telecom Regulatory Authority of India (Trai) for the auction to be held in July this year. At the Trai-suggested base prices, auction of all spectrum would fetch Rs 5.36 lakh crore to the exchequer. The frequencies put on the block include spectrum in premium 700 Mhz band (4G and advance), 800 Mhz (2G,4G), 900  Mhz (3G, 4G), 1800 Mhz (2G,4G), 2100 Mhz (3G), 2300 Mhz (4G) and 2500 Mhz (4G). The total potential revenue of Rs 5.36 lakh crore from the spectrum sale is more than double of telecom services industry gross revenue of Rs 2.54 lakh crore reported in 2014-15 financial year.

Moreover, the inter-ministerial panel has favoured that companies winning spectrum in higher frequency bands - above 1Ghz like 1800 Mhz, 2100 Mhz, 2300 Mhz -- should make 50 per cent upfront payment and rest in 10 years after a 2-year moratorium. Besides, for spectrum below 1Ghz band such as 700 Mhz, 800 Mhz, 900 Mhz, companies will require to pay 25 per cent upfront and rest in 10 years after a 2-year moratorium.

As per the rule approved by the inter-ministerial panel, a company interested in buying spectrum in 700 Mhz band will need to shell out a minimum of Rs 57,425 crore for a block of 5Mhz on pan-India basis. This band alone has the potential to fetch bids of over Rs 4 lakh crore.  If all spectrum in 700 Mhz band gets sold at even Trai recommended base price, then successful bidder will need to pay over Rs 25,000 crore after auction. Leading operators have requested to defer sale of 700 MHz spectrum, as the ecosystem for providing services in this band was not developed and sale would lead to underutilisation of the spectrum for several years and block industry's fund.

The CNX Nifty ended at 7706.55, down by 40.45 points or 0.52% after trading in a range of 7697.25 and 7749.00. There were 17 stocks advancing against 34 stocks declining on the index. (Provisional)

The top gainers on Nifty were HDFC up by 2.76%, NTPC up by 1.65%, HCL Tech up by 1.19%, Aurobindo Pharma up by 1.09% and Infosys up by 0.94%. On the flip side, Adani Ports &Special down by 11.57%, Tata Motors down by 6.80%, Tata Motors - DVR down by 6.33%, Hindalco down by 5.93% and Tata Steel down by 5.78% were the top losers. (Provisional)

European markets were trading in red; UK’s FTSE 100 decreased 57.13 points or 0.92% to 6,128.46, Germany’s DAX shed 53.2 points or 0.54% to 9,873.57 and France’s CAC was down by 20.23 points or 0.46% to 4,351.75.

Asian equity markets ended mostly lower on Wednesday, with markets in Hong Kong, Singapore and Taiwan bearing the brunt of the selling, after US stocks fell sharply to hit a three-week low overnight in reaction to falling oil prices, weak Chinese and UK manufacturing data and downgrades to GDP and inflation forecasts from the European Commission. Chinese shares closed largely unchanged despite resource shares coming under selling pressure in the wake of a regulatory crackdown to curb speculation in commodities markets. Japanese markets were closed for the Greenery day public holiday.