Benchmarks trade choppy in early deals on weak global cues

Indian equity benchmarks are trading flat in early deals, tracking mixed cues from Asia and overnight losses on Wall Street. Traders also remained cautious, eyeing Finance Minister Arun Jaitley's meeting with his counterparts in states to discuss proposed amendments to the GST Bill today. Though, markets managed to keep their head above water as investors took some encouragement from Minister of State for Finance Arjun Ram Meghwal’s statement that Government is working overtime to build a consensus on the long-pending Goods and Services Tax bill with the hope of getting it passed during the ongoing Parliament session. Some support also came with report that foreign institutional investors were net buyers in equities worth Rs 891 crore on Tuesday, as per provisional stock exchange data.

On the global front, Asian counters were exhibiting mixed trend at this point of time led by the Japanese market, which is down by around one and half a percent as the yen strengthened and crude oil traded near a three-month low. The US markets ended modestly lower in last session, partly due to profit taking, with traders cashing in on the strength seen over the past few weeks.

Back home, buying in oil and gas space providing some comfort to the local markets with report that the government is likely to completely exempt upstream oil and gas companies such as Oil and Natural Gas Corporation, Oil India and Gail India from contributing towards fuel subsidies. Stocks related to banking counter were trading in green despite the Reserve Bank of India (RBI) imposing a penalty of Rs.27 crore on 13 banks for violating several norms.

The BSE Sensex is currently trading at 28108.60, up by 13.26 points or 0.05% after trading in a range of 28063.95 and 28141.49. There were 20 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.45%, while Small cap index up by 0.41%.

The top gaining sectoral indices on the BSE were Metal up by 0.84%, Power up by 0.64%, PSU up by 0.58%, Oil & Gas up by 0.54% and IT up by 0.35%, while Realty down by 0.20% and Telecom down by 0.11% were the only losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 1.81%, Power Grid up by 0.80%, GAIL India up by 0.72%, SBI up by 0.70% and Axis Bank up by 0.69%. On the flip side, Lupin down by 0.87%, Hindustan Unilever down by 0.77%, Maruti Suzuki down by 0.72%, HDFC down by 0.61% and Asian Paints down by 0.45% were the top losers.

Meanwhile, the inter-ministerial Telecom Commission the highest decision-making body of the department of telecommunications refused to budge and recommended a weighted average formula for spectrum held by mobile operators with a minimum levy of 3 per cent, adding a condition that the annual charges for any operator will not fall below 3 per cent for the weighted average calculation.

Telecom Commission stood on its earlier recommendation of weighted average formula for all bands for overall level playing field and to do away with arbitrage and revenue shortfall. It has decided to fix a minimum rate of three per cent of a company’s adjusted gross revenue as SUC, in a bid to move towards a uniform rate for all players. For new spectrum auctions, a flat rate of three per cent will be charged, for the remaining airwaves the weighted average method will apply. The decision will be placed forward for the approval of cabinet next week after which a notice inviting application (NIA) will be issued. After the issuance of the NIA, spectrum auction is likely to start in 45 days.

The SUC issue became complex due to a difference in rates for the 2,300 megahertz (Mhz) band and other bands. SUC for the 2,300 Mhz band is one per cent while it is higher for other bands. The annual revenue for the government from SUC will go up if the Telecom Commission proposal is approved by the cabinet. Currently, the total annual SUC collection is Rs.7,500 crore. The government expects to garner Rs 5.66 lakh crore at base price from the spectrum auction, the biggest ever. The new formula will ensure that there is a minimum 3% floor rate for payment of SUC, but without making any significant changes to the 2,300 MHz rate.

The CNX Nifty is currently trading at 8639.00, up by 3.35 points or 0.04% after trading in a range of 8620.45 and 8643.95. There were 32 stocks advancing against 18 stocks declining on the index, while one stock remained unchanged.

The top gainers on Nifty were ACC up by 1.81%, Tata Steel up by 1.80%, Ambuja Cement up by 1.51%, Bank of Baroda up by 1.32% and Yes Bank up by 1.16%. On the flip side, Lupin down by 1.20%, Zee Entertainment down by 0.99%, Asian Paints down by 0.83%, Hindustan Unilever down by 0.75% and HDFC down by 0.72% were the top losers.

Asian markets trading mixed; Taiwan Weighted increased 4.8 points or 0.05% to 8,996.47, KOSPI Index gained 11.55 points or 0.57% to 2,023.87, Shanghai Composite rose 13.69 points or 0.45% to 3,029.51 and Hang Seng was up by 198.57 points or 0.9% to 22,192.01. On the flip side, Nikkei 225 declined 224.45 points or 1.35% to 16,395.84, Jakarta Composite slipped 7.8 points or 0.15% to 5,213.00 and FTSE Bursa Malaysia KLCI was down by 3.99 points or 0.24% to 1,664.27.