Benchmarks trade higher; Nifty reclaims 7,800 mark

After making a positive opening, Indian equity markets have extended their gains and are now trading in fine fettle in early deals, which lifted both the Sensex and Nifty above their psychological 25,500 and 7800 levels respectively. The sentiment got a boost as an underwhelming US jobs report helped reduce expectations about rate hikes from the US Federal Reserve. Further, support also came in on report that foreign portfolio investors (FPIs) bought shares worth a net Rs 27.71 crore on May 6, 2016, as per provisional data released by the stock exchanges.  Besides, appreciation in Indian rupee against dollar too supported sentiments. The rupee on Monday strengthened by 7 paise to 66.47 on increased selling of the American currency by banks and exporters. Meanwhile, the session was also proving jubilant for broader indices, which were trading with gains in the range of 0.70-0.80%. IT stocks such as Infosys, TCS and Wipro were trading mixed after US based IT services major Cognizant slightly revising down its forecast for 2016 revenue growth.

In the scrip specific development, Diagnostic chain operator Thyrocare Technologies listed at Rs 662 on the BSE, a 48.4 per cent premium over issue price of Rs 446.

On the global front, Asian markets were trading mostly in red as disappointing US jobs data for the month of April released Friday raised concerns about the health of the world's largest economy.

Back home, all the sectoral indices on the BSE, barring Consumer Durables, were trading in green led by Bankex, FMCG, Power, Auto and Metal. The market breadth on BSE was positive in the ratio of 1212: 402 while 67 scrips remained unchanged.

The BSE Sensex is currently trading at 25512.89, up by 284.39 points or 1.13% after trading in a range of 25302.86 and 25536.69. There were 28 stocks advancing against 2 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.72%, while Small cap index was up by 0.77%.

The top gaining sectoral indices on the BSE were Bankex up by 1.36%, FMCG up by 1.31%, Power up by 1.21%, Auto up by 1.08% and Metal up by 1.02%, while Consumer Durables down by 0.09% was the losing indices on BSE.

The top gainers on the Sensex were NTPC up by 2.64%, ITC up by 2.05%, HDFC up by 1.94%, Hero MotoCorp up by 1.70% and Asian Paints up by 1.68%. On the flip side, Dr. Reddys Lab down by 0.94% and Sun Pharma Inds. down by 0.20% were the only losers.

Meanwhile, ahead of one of the biggest spectrum sale, which will debut 4G airwaves in 700 MHz band and a total 2,142 MHz of airwaves across 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz and 2500 MHz, telecom minister Ravi Shankar Prasad has said that reserve prices worked out for the upcoming mega spectrum auctions are at “reasonable levels” and will result in a “successful” sale for the government.

Earlier, a Parliamentary panel had said that the government targets revenue of Rs 64,580.92 crores in the current financial year from spectrum auction proceeds. The inter-ministerial panel Telecom Commission (TC) agreed to base prices of various frequency bands recommended by the regulator 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 crores to the exchequer.

Telecom Commission, the highest decision-making wing in the department of telecommunication (DoT), set starting price for sale of 4G airwaves in the coveted 700 MHz band at Rs 11,485 crore a unit. At this price, a 5-MHz pan-India block would cost Rs 57,425 crore, more than half of the entire proceeds of the last spectrum auction.  If all spectrum in 700MHz band gets sold at even TRAI recommended base price, then successful bidder will need to pay over Rs. 25,000 crores after auction. As per payment rule suggested by the panel, the panel has favored that companies winning spectrum in higher frequency bands above 1Ghz like 1800MHz, 2100MHz, 2300MHz should make 50 percent upfront payment and rest in 10 years after a 2-year moratorium. Few operators have dubbed prices in the 700 MHz band as “highly expensive” and claimed that the 2G ruling mandating spectrum auction had virtually destroyed the sector and left them mired in debt.

As per budget estimates, the government expects to rake in Rs 50,000 crore, as 25% upfront payment from spectrum buyers this year. The government expects revenue of Rs 98,995 crore from communication services in 2016-17, which includes proceeds from spectrum auction and other fees levied by DoT.

The CNX Nifty is currently trading at 7810.90, up by 77.45 points or 1.00% after trading in a range of 7753.55 and 7824.70. There were 48 stocks advancing against 3 stocks declining on the index.

The top gainers on Nifty were NTPC up by 2.57%, Zee Entertainment up by 2.21%, HDFC up by 2.00% and Hindalco up by 1.85% and ITC up by 1.79%. On the flip side, Dr. Reddys Lab down by 0.92%, Sun Pharma Inds. down by 0.42% and TCS down by 0.04% were the top losers.

Asian markets were trading in red, Shanghai Composite decreased 63.61 points or 2.18% to 2,849.63, Jakarta Composite decreased 42.88 points or 0.89% to 4,779.71, KOSPI Index decreased 11.92 points or 0.6% to 1,964.79, FTSE Bursa Malaysia KLCI decreased 8.18 points or 0.5% to 1,641.18 and Taiwan Weighted decreased 1.92 points or 0.02% to 8,144.51.

On the flip side, Hang Seng increased 83.51 points or 0.42% to 20,193.38 and Nikkei 225 increased 86.75 points or 0.54% to 16,193.47.