Post Session: Quick Review

Indian equity benchmarks displayed a lackluster trade throughout the session and ended in red. The four consecutive session of winning streak by the benchmarks ended via today’s close. The benchmarks started the trade on a weak note in early deals on account of selling in frontline blue chip counters tracking lackluster trade across the globe and as investors geared up for two key central bank meetings. The sentiments were under pressure after rupee opened lower against US Dollar as against the previous close of 66.95 per dollar. Besides, Moody’s Investors Service stated in its report that limited scope of private sector investment and banking sector risks could well weigh on India’s sovereign rating. The credit implications of India’s (Baa3 positive) reforms will materialize in the medium term, fostering a more stable macroeconomic environment conducive to fiscal consolidation. The report raised concern that structural hurdles will continue to constrain private sector investment & growth and the banking sector will continue to pose contingent liability risks to the government over the near to medium term.  However, the downside was capped with global rating agency S&P projecting India to clock 8% growth over next few years and stating that India’s structural reform agenda has maintained strong momentum and should propel growth higher. The street also got some sign of relief with the Finance Ministry setting at rest confusion over levy of excise duty and stating that there is no ‘legal infirmity’ in the notifications issued by the government with regard to the GST Constitution Amendment Act. All eyes are now on the central banks this week, with the US Federal Reserve’s two-day meet starting on Tuesday and the Bank of Japan meeting on the same day.

On the global front, Asian markets ended mixed with Japanese market in red, as losses in the Steel, Retail and Warehousing sectors led shares lower. Chinese Premier Li Keqiang stated that the Chinese yuan’s exchange rate will stay basically stable at a reasonable and balanced level and there is no basis for a sustained devaluation of yuan. Stocks across Europe were holding gains, with investors largely sitting tight before the Bank of Japan and the Federal Reserve issue highly anticipated policy decisions.

Back home, aviation stocks were under pressure despite reports that domestic air passenger traffic increased by 23.98 percent during August to 83.81 lakh, further the data from Directorate General of Civil Aviation (DGCA) showed that the passenger traffic during January-August period grew by 23 percent.

The BSE Sensex ended at 28526.66, down by 107.84 points or 0.38% after trading in a range of 28480.53 and 28698.81. There were 11 stocks advancing against 19 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 0.11%, while Small cap index was down by 0.35%. (Provisional)

The top gaining sectoral indices on the BSE were Metal up by 0.21% and Oil & Gas up by 0.06% while, Realty down by 2.16%, Power down by 0.77%, Auto down by 0.64%, FMCG down by 0.57% and Consumer Durables down by 0.56% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were ONGC up by 1.38%, Tata Steel up by 1.01%, Cipla up by 0.89%, Maruti Suzuki up by 0.50% and Lupin up by 0.47%. (Provisional)

On the flip side, Adani Ports & Special Economic Zone down by 2.57%, Hero MotoCorp down by 2.23%, Bajaj Auto down by 2.14%, NTPC down by 1.32% and Bharti Airtel down by 1.25% were the top losers. (Provisional)

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 ended at 8774.05, down by 34.35 points or 0.39% after trading in a range of 8759.30 and 8816.45. There were 21 stocks advancing against 30 stocks declining on the index. (Provisional)

The top gainers on Nifty were Yes Bank up by 2.52%, Bharti Infratel up by 2.06%, Eicher Motors up by 1.39%, ONGC up by 1.32% and Hindalco up by 1.29%. (Provisional)

On the flip side, Hero MotoCorp down by 2.58%, Adani Ports & Special Economic Zone down by 2.50%, Bajaj Auto down by 1.95%, Indusind Bank down by 1.76% and ACC down by 1.44% were the top losers. (Provisional)

The European markets were trading in green; UK’s FTSE 100 increased 29.84 points or 0.44% to 6,843.39, Germany’s DAX increased 49.56 points or 0.48% to 10,423.43 and France’s CAC increased 9.06 points or 0.21% to 4,403.25.

Asian equity markets ended mixed on Tuesday, as caution remained ahead of monetary policy decisions by the US Federal Reserve as well as the Bank of Japan on Wednesday. The Federal Reserve is widely expected to keep interest rates steady on Wednesday, while the Bank of Japan is seen easing policy further, though economists are split over what measures it will take. Japanese shares ended lower as the yen edged up against the dollar on doubts about the BOJ's ability to sustain its stimulus plans. Further, Chinese stocks fell in thin trading, even as property stocks rose broadly after upbeat home price data.