Post Session: Quick Review

Monday turned out to be a daunting session for the Indian equity indices which got pounded by around half a percentage amid weak global cues. Indian equity benchmarks started the trade in green but surrendered under pressure in early deals after rupee depreciated to trade at fresh three-week low against the dollar at the forex market following increased demand for the American currency from importers and banks. Stock investors’ hopes of some aggressive monetary policy easing have been dashed following the selection of Urjit Patel as the new Reserve Bank of India (RBI) governor. The appointment of Patel, known for his focus on lowering inflation, like Raghuram Rajan, has sent the right signals to the global investment community about policy continuity. RBI’s deputy governor SS Mundra expects Urjit Patel to ensure continuity in policy as the next RBI governor. He sees no major shift in outlook with new governor. Meanwhile, Moody’s Investors Service notified that continued reforms to enhance business environment and moderate inflation will help India achieve robust growth but cautioned that rising contingent liability risks in the banking sector could affect its credit quality.

On the global front, Asian shares ended mixed, with traders braced for hawkish commentary from US Federal Reserve officials at its annual conference this week. Investors are also looking ahead to possible comments from Bank of Japan Governor Haruhiko Kuroda, with street expecting him to expand on his earlier remarks that the BOJ has room to cut rates. European markets were trading mixed ahead of a central bank gathering in Jackson Hole. Today, leaders from Germany, France and Italy will meet to discuss Brexit plans.

Back home, the street continues their weak trade on account of selling in frontline blue chip counters. Buying was witnessed in aviation stocks like Jet airways, SpiceJet and InterGlobe Aviation on report that domestic air passenger traffic jumped by nearly 26% in July, registering double-digit growth for the 24th consecutive month with lower fares attracting more fliers. This comes against the backdrop of many airlines offering lower fares as they compete to attract more passengers. In terms of market share in July, IndiGo is followed by Jet Airways (16.3%), Air India (14.8%), SpiceJet (11.7%), GoAir (8.4%), Vistara (2.6%) and AirAsia (2.2%).

The BSE Sensex ended at 27978.65, down by 98.35 points or 0.35% after trading in a range of 27918.05 and 28143.28. There were 10 stocks advancing against 20 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 0.56%, while Small cap index was down by 0.22%. (Provisional)

The top gaining sectoral indices on the BSE were FMCG up by 0.58% while, IT down by 1.08%, TECK down by 0.90%, Auto down by 0.87%, Metal down by 0.72% and Oil & Gas down by 0.62% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Hindustan Unilever up by 2.00%, ITC up by 1.23%, Cipla up by 0.61%, HDFC up by 0.61% and Power Grid Corporation up by 0.39%. (Provisional)

On the flip side, Lupin down by 2.05%, NTPC down by 2.01%, TCS down by 1.82%, Sun Pharma down by 1.78% and SBI down by 1.47% were the top losers. (Provisional)

Meanwhile, in order to express its concern over linkage of spectrum usage charges (SUC) to revenue, Internet Service Providers Association of India (ISPAI) is planning to move toward Telecom Minister Manoj Sinha and also the telecom secretary this week. The sector regulator, Telecom Regulatory Authority of India (TRAI) has sought public feedback on levying SUC linked to annual revenues for internet service providers (ISPs), something similar to the norms for mobile companies. The move could potentially push up broadband costs for consumers as ISPs currently pay ‘formula-based spectrum charges’.

ISPAI President Rajesh Chharia pointed out that spectrum is being used as the last mile access where optical fibre does not reach, in order to connect the unconnected people. Thus, any additional charge on spectrum will lead to a hike in the cost of service and will have an adverse impact on internet proliferation in rural areas. President further said that the formula-based spectrum charges work out to Rs 7.2 lakh for 6MHz spectrum for one year and they opposed to Trai's proposal of imposing SUC linked to revenue.

As per TRAI, at present, the service providers with Cellular Mobile Telephone Services and Unified Access Service Licence are assigned spectrum through market-based mechanism (auctions) and pay SUC on the basis of percentage of their gross revenue called AGR. However, there are certain categories of telecom and broadcast licenses to whom spectrum is assigned administratively and SUC is based on a formula-basis. ISPs are among such licensees. Besides, it has set September 19 as the last date for receiving comments and October 3 for counter-comments.

The CNX Nifty ended at 8626.90, down by 40.00 points or 0.46% after trading in a range of 8614.00 and 8684.85. There were 15 stocks advancing against 36 stocks declining on the index. (Provisional)

The top gainers on Nifty were Hindustan Unilever up by 2.12%, ITC up by 1.32%, Zee Entertainment up by 1.31%, BHEL up by 1.09% and Idea Cellular up by 1.01%. (Provisional)

On the flip side, Grasim Industries down by 3.07%, Ambuja Cement down by 2.33%, Aurobindo Pharma down by 2.31%, Lupin down by 2.29% and ACC down by 2.14% were the top losers. (Provisional)

The European markets were trading mostly in green; Germany’s DAX increased 35.16 points or 0.33% to 10,579.52, France’s CAC increased 12.78 points or 0.29% to 4,413.30 while, UK’s FTSE 100 decreased 23.26 points or 0.34% to 6,835.69.

Asian equity markets showed a mixed closing on Monday, as oil prices pulled back after surging dramatically in the last two weeks, with hawkish comments from another Federal Reserve official revived talk of a US rate hike as soon as September. Fed Chair Janet Yellen will speak at a meeting of global policy makers in Jackson Hole, Wyoming later this week, with investors looking for further clarity on the pace of future rate increases. Chinese shares fell as the yuan hit a two-week low against the dollar on global dollar strength. Meanwhile, Japanese shares eked out modest gains on a weaker yen after BOJ Governor Haruhiko Kuroda said there is ‘sufficient chance’ the central bank will add to its unprecedented easing at next month's policy meeting.