Benchmarks extend losses; Nifty slips below 9,850 mark

Indian equity benchmarks extended their losses in the morning session on account of selling in frontline blue chip counters, with Nifty slipping below 9,850 mark. The sell-off is on account of the cautiousness which prevailed amid reports that North Korea fired a ballistic missile that flew over Japanese airspace, reigniting geopolitical tensions that had cooled between North Korea and US allies in the Pacific Rim. Traders also remained concerned with a NITI Aayog report that it found that there is a huge gap between what the state governments have done to improve ease of doing business and what the enterprises know of these improvements. NITI Aayog has recommended reforming labour laws and a greater flexibility in their implementation to enhance ease of doing business. The NITI Aayog-IDFC Institute survey also found that a substantial chunk of the enterprises surveyed were not aware of many of the improvements undertaken both by the Union and state governments. 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 2017 series to next month i.e. September 2017 series. The near month July 2017 derivatives contracts will expire on Thursday i.e. August 31, 2017.

Traders were seen selling in Telecom, Power and TECK sector stocks. In scrip specific development, NTPC was trading in red on equity dilution by the government through offer for sale route. The offer for sale issue of the country’s largest power generation company has opened for subscription today and will remain opened till Wednesday. ACC, Bank of Baroda and Tata Power were trading in red after NSE decided to exclude these stocks from Nifty50, while HPCL and UPL were trading in green on addition in Nifty50. Majority of sugar stocks were under pressure after India, the world biggest sugar consumer, imposed inventory level limits on sugar mills in an attempt to keep prices under control during the upcoming festive season.

On the global front, Asian markets were trading mostly in red, after North Korea fires missile over Japan. Japan’s household spending unexpectedly fell in July from a year earlier after last month’s spike, casting some doubt on the sustainability of a domestic demand-driven economic recovery seen as vital to boosting tepid inflation. Back home, the BSE Sensex and NSE Nifty were trading below the psychological 31,600 and 9,850 levels respectively. The market breadth on BSE was negative in the ratio of 776:1323, while 92 scrips remained unchanged.

The BSE Sensex is currently trading at 31511.79, down by 239.03 points or 0.75% after trading in a range of 31485.30 and 31739.80. There were 5 stocks advancing against 26 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.19%, while Small cap index was down by 0.41%.

The losing sectoral indices on the BSE were Telecom down by 1.01%, Power down by 0.86%, TECK down by 0.71%, Capital Goods down by 0.71% and IT down by 0.64%, while there were no gainers on BSE sectoral front.

The top gainers on the Sensex were Tata Motors up by 0.36%, ICICI Bank up by 0.22%, Lupin up by 0.16%, Wipro up by 0.07% and Power Grid up by 0.01%.

On the flip side, NTPC down by 3.46%, HDFC down by 1.80%, Tata Motors - DVR down by 1.66%, Adani Ports & Special Economic Zone down by 1.42% and Hindustan Unilever down by 1.38% were the top losers.

Meanwhile, the Telecom Regulatory Authority of India (TRAI) has released a consultation paper on the next round of spectrum auctions which could see 5G airwaves promising superfast download speeds making a debut, seeking stakeholders’ response, the regulator has noted other issues faced by the industry, including one relating to spectrum holdings when two telecom companies merge.

In the consultation paper Trai has sought carriers' views on spectrum caps and rollout obligations for 5G spectrum besides the pricing of 4G airwaves in the coveted 700 MHz band that went unsold in the last auction. The regulator has also sought industry's views on the valuation methodology of spectrum in the 3300-3400 MHz and 3400-3600 MHz bands-used for 5G services, which are proposed to be auctioned for the first time, and on whether such valuation can be derived from other airwave bands 'using a technical efficiency factor'.

Trai sought to know when to hold the next sale, noting the spectrum acquired in the October 2016 auction was yet to be deployed fully. Moreover, the telecom Industry was currently consolidating with some telcos in the process of exiting. The spectrum sale could put on the table 60% of unsold airwaves from the last October auctions and some 275 units of new spectrum in bands identified for 5G services.

As per the consultation paper, 45 MHz spectrum (FDD/paired) can be utilised in APT700 band plan, unsold 58.75 MHz spectrum in 19 LSAs of last auction in 800MHz band , 9.4 MHz in the 900 MHz Band, 46.80 MHz spectrum in 1800 MHz Band, 275 MHz spectrum in 2100 MHz Band and 230 MHz spectrum in 2500 MHz Band too will be up for sale. DoT has proposed to include 100 MHz in all the 22 LSAs in the 3300-3400 MHz band for the forthcoming auction for access services.

The CNX Nifty is currently trading at 9838.70, down by 74.10 points or 0.75% after trading in a range of 9830.35 and 9887.35. There were 9 stocks advancing against 42 stocks declining on the index.

The top gainers on Nifty were BPCL up by 0.98%, Indian Oil Corporation up by 0.61%, GAIL India up by 0.48%, Tata Motors up by 0.33% and Power Grid up by 0.32%.

On the flip side, NTPC down by 3.35%, HCL Tech down by 2.01%, HDFC down by 1.87%, Bank of Baroda down by 1.77% and Tata Motors - DVR down by 1.55% were the top losers.

The Asian markets were trading mostly in red; Hang Seng decreased 114.83 points or 0.41% to 27,748.46, Nikkei 225 decreased 102.45 points or 0.53% to 19,347.45, Jakarta Composite decreased 37.35 points or 0.63% to 5,865.99, Taiwan Weighted decreased 36.92 points or 0.35% to 10,489.06, KOSPI Index decreased 15.01 points or 0.63% to 2,355.29 and FTSE Bursa Malaysia KLCI decreased 8.09 points or 0.46% to 1,761.40.

On the other hand, Shanghai Composite increased 4.03 points or 0.12% to 3,366.68.