Markets make a soft start, consolidates near the crucial levels

Indian markets extending their consolidation mood made a mildly lower start on Thursday morning. Though, themajor benchmarks have slowly started clawing back into green, but sluggishglobal cues was weighing down the sentiments, while traders were also takingcautious stance ahead of IT bellwether TCS earnings, as the largest IToutsourcing firm by sales, will announce its June quarter numbers later in theday and is expected to report modest drop in net profit. The whole IT pack wastrading cautiously, as the TCS numbers will give the cues how the IT companieswill be performing in the first quarter.On the global front, the US marketsmade a mixed closing overnight ahead of key economic data and earnings; theAsian markets have made mixed start too, though the Japanese market extendedgains.

Back home, the broader markets wereperforming better than the benchmarks and most of the sectoral indices too weretrading in green, barring some weakness in healthcare, metal and FMCG. The goldand jewelry stocks were in jubilant mood, as the government relaxed the rulesfor its tax on gold jewelry sales that was introduced earlier this year in anattempt to address concerns raised by the industry. According to the new rules,jewelers with turnover up to Rs 15 crore ($2.2 million) a year will be exemptfrom the excise duty. Earlier, the exemption limit for jewelers was turnover upto Rs 12 crore. The aviation stocks after initial somberness have bounced backand were trading in green, despite the Directorate General of Civil Aviation(DGCA) coming up with the revised norms that caps ticket cancellation chargesand bar airlines from levying an additional amount for refund.

The BSE Sensex is currently tradingat 27807.02, down by 8.16 points or 0.03% after trading in a range of 27763.15and 27866.11. There were 15 stocks advancing against 15 stocks declining on theindex.

The broader indices were trading ingreen; the BSE Mid cap index was up by 0.21%, while Small cap index up by0.51%.

The top gaining sectoral indices onthe BSE were Consumer Durables up by 1.92%, Power up by 0.47%, Bankex up by0.34%, PSU up by 0.29%, Capital Goods up by 0.28%, while Metal down by 0.29%and FMCG down by 0.10% were the losing indices on BSE.

The top gainers on the Sensex wereGAIL India up by 1.69%, Maruti Suzuki up by 1.60%, Power Grid Corpn. up by1.55%, Tata Motors up by 1.29% and Asian Paints up by 1.24%. On the flip side,ONGC down by 2.05%, Mahindra & Mahindra down by 1.63%, Dr. Reddys Lab downby 1.01%, Sun Pharma Inds. down by 0.94% and Hero MotoCorp down by 0.61% werethe top losers.

Meanwhile, voicing agreement withTelecom Regulatory Authority of India (Trai) decision on spectrum usage charge(SUC), a grouping of GSM telcos, Cellular Operators Association of India (COAI)has said that the government should move to a flat 1 per cent levy for SUC assuggested by Trai or clearly specify a timeline in case it decides to adopt aninterim weighted average formula recommended by Trai recently as a temporaryoption.

The group said that Cabinet and theTelecom Commission are not so constrained and should move to what Trai sees asthe appropriate SUC regime, which is a flat SUC rate and not a weighted averageapproach. However, COAI said that if the Cabinet decides to adopt an interimweighted average method, it should clearly specify in the NIA (Notice InvitingApplications) when it intends to move to a flat spectrum usage rate, asrecommended by the telecom watchdog

Trai though had reiterated its standof a flat SUC, terming it the best option; it had recently proposed a newweighted average formula to calculate SUC for telecom operators to replace theexisting formula used by DoT. It added that a weighted average formula tocalculate SUC is a best temporary solution. The new formula takes into accountthe 'bid values' of each bandwidth to the existing weights as the sole quantityof airwaves is not a sufficient weight and revenue arising out of eachbandwidth should also be taken into account. However, since revenue segregationcannot be done, the bid amount paid by an operator was indicative of therevenue expected from that bandwidth. Trai has made its suggestions to the DoTwhich will forward it to the cabinet for a final approval.

Spectrum auction was earlier plannedby DoT in July, in which airwaves worth Rs 5.66 lakh crore will be put on theblock, but with the Cabinet asking for Trai’s view on SUC; it deferred thesale, till September. The government plans to raise around Rs 5.76 trillion ifthe entire spectrum gets sold at the reserve price.

The CNX Nifty is currently tradingat 8516.30, down by 3.20 points or 0.04% after trading in a range of 8500.70and 8523.40. There were 28 stocks advancing against 23 stocks declining on theindex.

The top gainers on Nifty were MarutiSuzuki up by 1.54%, Power Grid Corpn. up by 1.48%, GAIL India up by 1.31%, TataMotors - DVR up by 1.26% and BPCL up by 1.22%. On the flip side, ONGC down by1.79%, Mahindra & Mahindra down by 1.67%, Dr. Reddys Lab down by 1.23%, SunPharma Inds. down by 1.03% and Hero MotoCorp down by 0.96% were the top losers.

The Asian markets were showing mixedtrend, KOSPI Index was tad higher by  0.54 points or 0.03% to 2,006.09,Taiwan Weighted gained 3.78 points or 0.04% to 8,861.53, Hang Seng was up by9.99 points or 0.05% to 21,332.36 and Nikkei 225 increased by 112.6 points or0.69% to 16,344.03.

On the other hand, Jakarta Compositedeclined by 26.71 points or 0.52% to 5,107.22, Shanghai Composite was lower by12.83 points or 0.42% to 3,047.86 and FTSE Bursa Malaysia KLCI was down by 3.66points or 0.22% to 1,656.73.