Benchmarks trade in green; Realty, Telecom lead

Indian equity benchmarks continued their trade in green in the morning session on account of buying in frontline blue chip counters. The rupee opened higher against dollar on account of selling of American currency by banks and exporters. Foreign Portfolio Investors stood net sellers in domestic equity markets on Tuesday and sold shares worth Rs 1789.36 crore with gross purchases and gross sales of Rs 4312.11 crore and Rs 6101.47 crore, respectively. Traders were taking support with a blog on Asian Development Bank’s website, stating that the goods and services tax in India will benefit the lower and lower-middle income class as it is likely to reduce the tax rate on goods. It further stated that in general, GST is likely to reduce the tax rate on goods as compared to previously, while tax rates on services are expected to increase. Meanwhile, the Financial Stability & Development Council (FSDC) has said that India has macro-economic stability today on the back of improvement in its macro-economic fundamentals and structural reforms with the launch of the Goods and Services Tax (GST). The Council, comprising regulators, took note of the overall stability that has been achieved on the back of improvements in macro-economic fundamentals, structural reforms with the launch of the GST, action being taken to address the twin balance sheet challenge and financial market confidence.

Traders were seen piling up position in Realty, Telecom and Utilities stocks, while selling was witnessed in Consumer Durables, Metal and IT sector stocks. Telecom stocks like Bharti Airtel, Idea Cellular, Reliance Communications, MTNL and TTML were trading in green as the Inter-Ministerial Group (IMG) on telecom industry hinted on extending the timeline for deferred spectrum payment by telcos to 16 years instead of 10 at present. In scrip specific development, Gati was trading in green after the company said that its profit jumped more than 3-fold to Rs 18.31 crore in June quarter. The company had reported Rs 5.11 crore profit in the corresponding quarter of last year. Infosys was trading in green. Founder NR Narayana Murthy will talk to investors and analysts in a conference call arranged by broker Investec India on today evening. Murthy is expected to speak on issues related to the ongoing leadership crisis at Infosys sparked by the exit of its CEO, Vishal Sikka.

On the global front, Asian markets were trading mostly in red, while Hong Kong shut for Hato. Investors were eyeing Jackson Hole, Wyoming conclave of central bankers this week that could provide fresh insight into policy options. Singapore’s industrial production likely rose at the fastest annual pace in seven months in July, thanks to a global electronics boom. Back home, the BSE Sensex and NSE Nifty were trading above the psychological 31,400 and 9,750 levels respectively. The market breadth on BSE was positive in the ratio of 1405:652, while 100 scrips remained unchanged.

The BSE Sensex is currently trading at 31413.58, up by 121.73 points or 0.39% after trading in a range of 31379.25 and 31460.38. There were 26 stocks advancing against 5 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.41%, while Small cap index was up by 0.86%.

The top gaining sectoral indices on the BSE were Realty up by 2.65%, Telecom up by 1.63%, Utilities up by 1.01%, Power up by 0.85% and PSU up by 0.81%, while Consumer Durables down by 0.58%, Metal down by 0.14% and IT down by 0.12% were the only losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 2.62%, Dr. Reddy’s Lab up by 2.17%, NTPC up by 2.03%, Adani Ports & Special Economic Zone up by 1.56% and ICICI Bank up by 1.23%.

On the flip side, Hindustan Unilever down by 0.85%, TCS down by 0.60%, Asian Paints down by 0.42%, Tata Steel down by 0.22% and Sun Pharma down by 0.18% were the top losers.

Meanwhile, giving a big sigh of relief to the telecom players, the Inter-Ministerial Group (IMG) on telecom industry, in its latest meeting has hinted on extending the timeline for deferred spectrum payment by telcos to 16 years instead of 10 at present, a proposal that would improve the cash flow of telecom companies. Currently, a portion of spectrum auction amount is taken as upfront payment by the Department of Telecom (DoT) and the balance after a two-year moratorium is paid out every year in 10 installments.

IMG discussed different proposals including convergence between DoT and RBI guidelines on the issue of allowing spectrum as collateral and shifting from prime lending rate (PLR) to marginal cost of funds-based lending rate (MCLR) for interest and penalty payments, pertaining to licence fee and spectrum usage charges.

It was reported that extension of timeline for deferred spectrum payment was one of the proposals that the IMG reached a 'consensus' on. Also there was consensus on shifting from PLR to MCLR for interest and penalty payments with regard to licence fee and spectrum charges. The report is in the drafting stage and the group will meet again to finalise the recommendations to deal with financial stress in the sector.

The IMG will meet again on August 28 or 29 and finalise the report so that it can be placed before the Telecom Commission on September 1. Earlier, the Telecom Minister Manoj Sinha had on August 3 said that IMG will submit its report in 20 days, based on which, the government can take corrective measures.

The CNX Nifty is currently trading at 9797.25, up by 31.70 points or 0.32% after trading in a range of 9786.75 and 9816.70. There were 31 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were Bharti Airtel up by 2.53%, Dr. Reddy’s Lab up by 2.16%, GAIL India up by 1.81%, NTPC up by 1.73% and Adani Ports & Special Economic Zone up by 1.32%.

On the flip side, Tech Mahindra down by 1.35%, Indiabulls Housing Finance down by 1.30%, Eicher Motors down by 1.28%, Tata Power down by 1.19% and Zee Entertainment down by 1.10% were the top losers.

The Asian markets were trading mostly in red; Shanghai Composite decreased 5.76 points or 0.18% to 3,284.47, KOSPI Index decreased 2.66 points or 0.11% to 2,362.67, Taiwan Weighted decreased 1.72 points or 0.02% to 10,390.35 and FTSE Bursa Malaysia KLCI decreased 1.3 points or 0.07% to 1,772.92.

On the other hand, Jakarta Composite increased 1.52 points or 0.03% to 5,881.81 and Nikkei 225 increased 53.27 points or 0.27% to 19,437.11.