Weakness persists in Indian markets in late afternoon session

Indian equity benchmarks continued to trade weak in late afternoon session, as investors trimmed positions ahead of the outcome of the policy meetings from the Bank of Japan and US Federal Reserve which begin today. Sentiment remained down beat with the report that India's total external debt rose marginally by 2.2 percent to $485 billion at the end of March 2016, compared to that of $475 billion as of March 31, 2015, largely driven by private commercial borrowings and non-resident Indian (NRI) deposits. However losses remained capped with the IMD report stating that country’s long-period monsoon rainfall for the June to September period despite being 5% deficient is heading for a 'normal' performance.

On the global front, European markets were trading slightly higher, as investors assessed valuations before the Federal Reserve’s meeting. Back home, Most of the sectoral indices were trading in negative territory with Realty as the top losing indices, down by around 1.73%. In scrip specific development, Gammon India rises after the company is seeking shareholders nod to sell up to 75% of Gammon Engineers.

The BSE Sensex is currently trading at 28512.56, down by 121.94 points or 0.43% after trading in a range of 28497.79 and 28698.81. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.03%, while Small cap index was down by 0.19%.

The top gaining sectoral indices on the BSE were Metal up by 0.39%, Oil & Gas up by 0.33% and PSU up by 0.08%, while Realty down by 1.73%, Auto down by 0.70%, Power down by 0.66%, FMCG down by 0.65% and IT down by 0.60% were the losing indices on BSE.

The top gainers on the Sensex were ONGC up by 1.77%, Tata Steel up by 1.37%, Maruti Suzuki up by 0.74%, Lupin up by 0.65% and Cipla up by 0.59%. On the flip side, Hero MotoCorp down by 2.37%, Bajaj Auto down by 1.93%, Bharti Airtel down by 1.39%, NTPC down by 1.32% and Adani Ports &Special down by 1.23% were the top losers.

Meanwhile, seven telecom companies have submitted Rs 14,653 crore as Earnest Money Deposit (EMD) for the forthcoming 2,355 megahertz of airwaves auction starting from October 1. The numbers are lower of the deposit of Rs 19,711 crore in February 2015 auctions by the same operators, when lesser bands were up for grabs.

Mukesh Ambani-led firm Reliance Jio alone has deposited the highest EMD of around Rs 6,500 crore, almost the same as the combined deposits made by the top three telecoms. As per the Department of Telecommunication (DoT), Vodafone India has submitted EMD of Rs 2,740 crore, Idea Cellular Rs 2,000 crore and Bharti Airtel Rs 1,980 crore. Beside, Tata Teleservices has submitted EMD of Rs 1,000 crore, Reliance Communications Rs 313 crore and Aircel Rs 120 crore.

EMD is indicative of a company's strategy to bid in specific circles and spectrum bands; it gives them eligibility points with regard to those circles. Accordingly Reliance Jio is the only company which has potential to buy spectrum in premium 700 Mhz at floor price in most of the circles as a pan-India bidder for 700 Mhz spectrum needs to have EMD of Rs 5,610 crore. This is the first time that government will auction the 700 Mhz band, considered to be the most premium as the estimated cost of providing service through it is about one-third of 3G under the 2100 Mhz band. Total spectrum worth Rs 4,01,975 crore in 700 Mhz band is being put up for auction.

The government is putting up large chunks of spectrum for sale, which should help in removing fragmentation and improve service quality. Mobile frequencies in all bands -- 700 Mhz, 800 Mhz, 900 Mhz, 1800 Mhz, 2100 Mhz and 2300 Mhz -- will be put on the block in the upcoming auction. All the radiowaves being put up for auction can be used for providing high-speed 4G services. The government expects revenue of Rs 98,995 crore from the telecom space in 2016-17, which includes Rs 64,000 crore from the auction of about 2,354.55 Mhz of spectrum.

The CNX Nifty is currently trading at 8772.90, down by 35.50 points or 0.40% after trading in a range of 8765.20 and 8816.45. There were 22 stocks advancing against 28 stocks declining on the index, while 1 stock remained unchanged. 

The top gainers on Nifty were ONGC up by 1.67%, Tata Steel up by 1.42%, Hindalco up by 1.11%, Yes Bank up by 0.96% and Grasim Industries up by 0.81%. On the flip side, Hero MotoCorp down by 2.56%, Bajaj Auto down by 1.99%, Tata Power down by 1.89%, Indusind Bank down by 1.69% and Bharti Airtel down by 1.59% were the top losers.

Asian market were trading mostly in red; Nikkei 225 decreased 27.14 points or 0.16% to 16,492.15, Hang Seng declined 19.59 points or 0.08% to 23,530.86, Jakarta Composite dropped 15.99 points or 0.3% to 5,305.85 and Shanghai Composite was down by 3.05 points or 0.1% to 3,023.00. On other hand, FTSE Bursa Malaysia KLCI increased 1.99 points or 0.12% to 1,653.70, Taiwan Weighted was up by 8.7 points or 0.1% to 9,161.58 and KOSPI Index jumped 9.93 points or 0.49% to 2,025.71.

European markets were trading in green; France’s CAC increased 3.79 points or 0.09% to 4,397.98, UK’s FTSE 100 rose 18.41 points or 0.27% to 6,831.96 and Germany’s DAX surged 45.93 points or 0.44% to 10,419.80.