Benchmarks trade in fine fettle in early deals

Indian equity indices have made a positive start and are trading in fine fettle in early deals on Tuesday, as traders opted to buy beaten down but fundamentally strong stocks after yesterday’s drubbing. Some support also came with statement of Ravindra Dholakia, one of the three government appointees to the newly formed Monetary Policy Committee (MPC) that there will be no tug of war in the MPC. Meanwhile, the tax department just within the week after the first meeting of the GST Council has come out with three draft rules and their formats relating to registration, invoice and payments which would be finalised by week-end.

On the global front, Asian markets were trading mostly in red at this point of time amid the first US presidential debate between Democrat Hillary Clinton and Republican Donald Trump. US stocks extended losses yesterday as worries about Germany's Deutsche Bank weighed on the financial sector and as investors awaited the US presidential debate.

Back home, stocks related to oil & gas sector remained on buyers’ radar on Moody's Investors Service’s report that  India's petroleum consumption will grow at 6 percent in 2017-18, double the rate at which fuel demand in China is projected to grow. However, the telecom stocks were reeling under pressure, as the Telecom Regulatory Authority of India (TRAI) has raised concern over high rate of call failure between the networks of newcomer Reliance Jio Infocomm and other telecom companies.

The BSE Sensex is currently trading at 28363.39, up by 69.11 points or 0.24% after trading in a range of 28354.10 and 28432.74. There were 21 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.47%, while Small cap index was up by 0.72%.

The top gaining sectoral indices on the BSE were IT up by 0.90%, Energy up by 0.74%, TECK up by 0.66%, Realty up by 0.60% and Power up by 0.58%, while Telecom down by 1.04% and FMCG down by 0.15% were the only losing indices on BSE.

The top gainers on the Sensex were TCS up by 1.62%, Reliance Industries up by 1.33%, Power Grid up by 1.23%, Coal India up by 1.01% and Hero MotoCorp up by 0.84%. On the flip side, Bharti Airtel down by 1.65%, ICICI Bank down by 1.14%, ITC down by 0.58%, GAIL India down by 0.50% and Larsen & Toubro down by 0.47% were the top losers.

Meanwhile, in order to make the biggest-ever telecom spectrum auction starting from October 1, smooth and glitches free, the government kick-started mock auction among the seven qualified bidders. As per the Department of Telecommunications the mock auction started from Monday morning -September 26 and will go on till September 27. The mjunction services limited is advising the government on this auction and also conducting the mock auction.

In some new bidding-friendly measure adopted by the government this year is that spectrum won will be assigned within 30 days from date of upfront payment, while Interest on deferred payment, linked to base rate, will be 9.3 per cent this year against 10 per cent in 2015. Also, for the successful bidder, the lock-in period of equity in the company has been reduced to 1 year instead of the earlier stipulation of minimum period of 3 years or completion of roll out obligation whichever is later.

The total amount of spectrum to be offered for sale is 2,354.55 megahertz (MHz). Overall, based on the reserve price, the mop up is expected to be Rs 5.66 lakh crore. The 2,300-plus MHz of airwaves on the block for telecom operators is in seven bands -- 700 MHz, 800 MHz, 900 MHz, 1,800 MHz, 2,100 MHz, 2,300 MHz and 2,500 MHz -- as against 470.75 MHz in the previous round, which is set to fetch the exchequer $17 billion during its tenure. The companies qualified for auction are Bharti Airtel, Vodafone India, Reliance Jio Infocomm, Reliance Communications, Idea Cellular, Aircel and Tata Teleservices and the government has decided to allot the right to the spectrum won through auction for 20 years.

The operators will have the choice of both upfront and installments payment options. The service providers who win airwaves below 1 gigahertz (GHz) bandwidth will have to pay 25% upfront and who winning above that have to pay 50%. The government has adopted on new bidding-friendly measure this year, that is spectrum won will be assigned within 30 days from date of upfront payment. Interest on deferred payment, linked to base rate will be 9.3% this year instead of 10% in 2015.

The CNX Nifty is currently trading at 8754.65, up by 31.60 points or 0.36% after trading in a range of 8742.25 and 8768.50. There were 33 stocks advancing against 16 stocks declining on the index, while 2 stocks remained unchanged.

The top gainers on Nifty were Aurobindo Pharma up by 1.86%, Zee Entertainment up by 1.76%, Reliance Industries up by 1.49%, TCS up by 1.23% and Kotak Mahindra Bank up by 1.16%. On the flip side, Bharti Airtel down by 1.50%, ICICI Bank down by 0.86%, Tata Power down by 0.59%, Bharti Infratel down by 0.59% and Idea Cellular down by 0.50% were the top losers.

Asian markets were trading mostly in red; Jakarta Composite slipped 8.21 points or 0.15% to 5,343.93, FTSE Bursa Malaysia KLCI shed 6.42 points or 0.38% to 1,663.08 and Shanghai Composite was down by 4.51 points or 0.15% to 2,975.92.

On the flip side, KOSPI Index increased 12.66 points or 0.62% to 2,059.77, Nikkei 225 gained 76.3 points or 0.46% to 16,620.86 and Hang Seng was up by 256.57 points or 1.1% to 23,574.49.