Markets trade flat in early noon session

Indian equity benchmarks recovered from day’s low but were trading flat in early noon session on account of selling by fund and retail investors amid weak cues from Asian markets, as weak Chinese manufacturing data and a downgrade in the eurozone growth forecast revived worries about slowing growth. Further, persistent selling by foreign funds, lower crude oil prices and depreciation in the rupee against dollar, too weighed on the sentiment. However, losses remained capped on the report that International Monetary Fund (IMF) has retained India’s growth forecast at 7.5 per cent for the financial year 2016-17, on back of private consumption even as weak exports and sluggish credit growth weigh on the economy. It further added that the government's push to boost capital spending could help crowd in private sector investments, which will help broad-base the recovery.

In scrip specific development, share of HDFC was up over 3% after the company reported net profit of Rs 2,607 crore for the quarter ended March (Q4FY16), up 40 per cent year-on-year (y-o-y). Tata Motors dropped over 4% after the company’s arm JLR's  sales dropped to 103 units in April 2016 compared with 143 units in April 2015.

The BSE Sensex is currently trading at 25221.08, down by 8.62 points or 0.03% after trading in a range of 25096.19 and 25241.24. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.23%, while Small cap index down by 0.20%.

The top gaining sectoral indices on the BSE were Bankex up by 0.18%, Capital Goods up by 0.10% and Oil & Gas up by 0.01%, while Metal down by 2.29%, Auto down by 1.00%, Consumer Durables down by 0.39%, TECK down by 0.37% and PSU down by 0.37% were the losing indices on BSE.

The top gainers on the Sensex were HDFC up by 3.14%, NTPC up by 1.43%, GAIL India up by 1.34%, HDFC Bank up by 1.10% and Hero MotoCorp up by 0.94%. On the flip side, Adani Ports &Special down by 9.43%, Tata Motors down by 4.40%, Tata Steel down by 4.22%, Axis Bank down by 1.23% and ONGC down by 1.21% were the top losers.

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 is currently trading at 7746.75, down by 0.25 points or 0.00% after trading in a range of 7703.85 and 7748.15. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were HDFC up by 3.16%, NTPC up by 1.79%, Kotak Mahindra Bank up by 1.51%, GAIL India up by 1.10% and HCL up by 1.08%. On the flip side, Adani Ports &Special down by 9.04%, Tata Motors down by 4.53%, Tata Steel down by 4.17%, Tata Motors - DVR down by 3.65% and Hindalco down by 3.51% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 145.81 points or 0.71% to 20,531.13, Taiwan Weighted decreased 108.65 points or 1.31% to 8,185.47, Jakarta Composite decreased 41.51 points or 0.86% to 4,770.75 and KOSPI Index decreased 9.7 points or 0.49% to 1,976.71, while FTSE Bursa Malaysia KLCI increased 1.64 points or 0.1% to 1,653.08 and Shanghai Composite increased 10.56 points or 0.35% to 3,003.20.