Firm trade prevails in late morning session

Indian equity benchmarks continued their firm trade in the late morning session on account of buying in frontline blue chip counters on the penultimate session of F&O series expiry, taking cues from global counterparts. The sentiments were on optimistic note with rating agency Ind-Ra revising India’s economic growth forecast to 7.8% for the ongoing fiscal on better monsoon. It has said the positive impact of monsoon on agriculture will support the overall GDP growth with its backward and forward linkages. Traders were seen piling position in Realty, Power and Oil & Gas stocks, while selling was witnessed in Metal and Bankex sector stocks. UDAY, a government scheme aimed at rescuing power distribution companies from their financial mess, may not be an immediate success because the utilities continue to lose at least 20 paise on every rupee spent to send electricity to consumers. In scrip specific development, Aurobindo Pharma was trading in green after the pharma major reported a 24% increase in consolidated net profit at Rs 585 crore for the quarter ended June, 2016 driven by double-digit sales growth across major markets led by the US formulations business. On the other hand, Idea Cellular was trading in red after the telecom major said it had not held any talks with Vodafone, as widely speculated, on a possible merger with the second largest operator. The market may remain volatile this week as traders may roll over positions in the Futures & Options (F&O) segment from the near month i.e. August 2016 series to next month i.e. September 2016 series. The near month August 2016 derivatives contracts will expire on Thursday i.e. August 25, 2016.

On the global front, Asian stocks witnessed a mixed trend ahead of Federal Reserve Chairwoman Janet Yellen’s speech later this week, which could provide hints about the timing of further hike in interest rates. An adviser to Prime Minister Shinzo Abe stated that Japan should spend 10 trillion yen ($99.83 billion) on fiscal stimulus both in fiscal 2017 and in fiscal 2018 to offset a lack of demand in the economy and eliminate the risk of deflation. Back home, the NSE Nifty and BSE Sensex were trading above the psychological 8,600 and 28,000 levels respectively. The market breadth on BSE was positive in the ratio of 1319:780, while 137 scrips remained unchanged.

The BSE Sensex is currently trading at 28031.39, up by 41.18 points or 0.15% after trading in a range of 28003.51 and 28108.39. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.68%, while Small cap index was up by 0.51%.

The gaining sectoral indices on the BSE were Realty up by 0.62%, Power up by 0.61%, Oil & Gas up by 0.60%, Auto up by 0.56% and TECK up by 0.43%, while Metal down by 0.06% and Bankex down by 0.02% were the losing indices on BSE.

The top gainers on the Sensex were NTPC up by 2.61%, Maruti Suzuki up by 2.39%, Cipla up by 2.33%, Infosys up by 1.45% and ONGC up by 0.88%.

On the flip side, Lupin down by 2.41%, Coal India down by 1.01%, TCS down by 0.93%, Hindustan Unilever down by 0.75% and Adani Ports & Special Economic zone down by 0.61% were the top losers.

Meanwhile, the government is all set to defer the forthcoming auction of telecom spectrum by few days on account of auspicious period and festival season by Hindus as requested by the telecom industry. Telecom Secretary J S Deepak has said many companies and people feel that the Navratra is starting from October 1 and that is a good time to bid so it gives them good comfort to bid and spend more money to buy the spectrum. As September 29 was fixed for the auction and it may change to the first week of October.

Deepak said that auctions will be successful and the Department of Telecom (DoT) will meet its revenue mobilisation targets through it. He further said that they are selling a lot of good quality spectrum, thus the price of spectrum will be high. In recently held pre-bid meeting almost all companies participated. The government planned to kick off the biggest ever spectrum auction on September 29 and it was expecting 25 per cent upfront payment for the spectrum below 1 GHz, which would be assigned within 30 days after the bidding.

The government is making available 2354.55 MHz of spectrum in these auctions and at base price it will garner Rs 5.56 trillion or Rs 5.56 lakh crore, which includes the additional Rs 27,000 crore of harmonised spectrum. It is putting up massive quantity of spectrum for the first time to help remove fragmentation and improve quality of services.

The CNX Nifty is currently trading at 8644.00, up by 11.40 points or 0.13% after trading in a range of 8633.80 and 8661.05. There were 28 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were Aurobindo Pharma up by 4.98%, Maruti Suzuki up by 2.39%, NTPC up by 2.39%, Cipla up by 2.22% and Infosys up by 1.40%.

On the flip side, Idea Cellular down by 2.67%, Lupin down by 2.43%, Coal India down by 0.94%, Ambuja Cement down by 0.90% and TCS down by 0.88% were the top losers.

The Asian markets were trading mostly in red; Hang Seng decreased 189.64 points or 0.82% to 22,809.29, Jakarta Composite decreased 7.34 points or 0.14% to 5,409.80, KOSPI Index decreased 6.37 points or 0.31% to 2,043.56 and Shanghai Composite decreased 0.07 points or 0% to 3,089.63.

On the other hand, FTSE Bursa Malaysia KLCI increased 0.64 points or 0.04% to 1,683.71, Taiwan Weighted increased 1.36 points or 0.02% to 9,032.29 and Nikkei 225 increased 91.36 points or 0.55% to 16,588.72.