Benchmarks witness consolidation; end with marginal losses

Extending their consolidation mood for second straight session, Indian equity benchmarks ended the choppy day of trade slightly in red amid weak global cues. Markets altered between green and red throughout the session and profit booking in dying hour of trade dragged markets tad below the neutral lines. Traders also remained concerned with the details of the minutes of the MPC meeting held on December 5 and 6 released by the Reserve Bank of India (RBI), where RBI Governor Urjit Patel flagged concerns over rising global oil prices and uncertainties on fiscal and external fronts. Two other members in the panel, Deputy Governor Viral Acharya and Executive Director Michael Debabrata Patra, flagged the issue of inflation in petroleum products. Sentiments also remained down-beat with private report stating the RBI’s policy rates are likely to remain unchanged in 2018 despite higher inflation, a recovering growth, and elevated oil prices.

Meanwhile,  the special CBI court pronounce the judgment in the 2G scam, which rocked the telecom sector some years ago and played a major part in cementing the UPA government’s reputation of being corrupt. The court acquitted all accuses including former telecom minister A Raja acquitted in 2G case. However, losses remained capped with traders getting some solace with the Union Cabinet approving the Consumer Protection Bill, 2017, paving the way for its introduction in Parliament. Once approved by Parliament, the new law will replace the current Consumer Protection Act, 1986. Some support also came with Chairman of the Economic Advisory Council to the Prime Minister (EAC-PM) Bibek Debroy’s statement that India is expected to be a $6.5-7 trillion economy by 2030, and at the current exchange rate it would touch $10 trillion by 2035-40.

On the global front, European markets were trading mostly in red as investors focused on a highly-anticipated vote in Catalonia. Catalonia voters were set to go to the polls on Thursday for a regional election following weeks of political uncertainty. Asian markets exhibited mixed trend after US equities dipped in the wake of congressional passage of US tax cuts, which was already priced in. The Bank of Japan kept monetary policy steady despite growing signs of strength in the economy, signaling that it was in no rush to edge away from crisis-mode stimulus with inflation still distant from its 2 percent target.

Back home, broader indices outperformed benchmarks and ended with a gain of around a percent on Thursday. Meanwhile, textile stocks remained on buyers’ radar, as the Cabinet Committee on Economic Affairs has approved the scheme for Capacity Building in Textile Sector (SCBTS). The scheme will be applicable from 2017-2018 to 2019-2020 with an outlay of Rs 1,300 crore. However, public sector banks remained under pressure after the finance ministry yesterday said that it has not provided the entire amount towards capital infusion in public sector banks as most of them failed to meet the performance target. As part of Indradhanush Plan to revitalize state-owned lenders, the government had proposed to infuse Rs 70,000 crore out of Budgetary Allocations in them.

Finally, the BSE Sensex slipped 21.10 points or 0.06% to 33,756.28, while the CNX Nifty was down by 3.90 points or 0.04% to 10,440.30.

The BSE Sensex touched a high and a low of 33,860.99 and 33,707.80, respectively and there were 13 stocks on gaining side as against 18 stocks on losing side on the index.

The broader indices ended in green; the BSE Mid cap gained by 0.77%, while Small cap index was up by 1.11%.

The top gaining sectoral indices on the BSE were Power up by 1.90%, Utilities up by 1.53%, Capital Goods up by 1.42%, Industrials up by 0.89% and Healthcare was up by 0.76%, while Auto down by 0.76%, Energy down by 0.37%, Bankex down by 0.26%, FMCG down by 0.18% and Telecom was down by 0.18% were the top losing indices on BSE.

The top gainers on the Sensex were Larsen & Toubro up by 1.92%, Tata Steel up by 1.84%, Hero MotoCorp up by 1.45%, NTPC up by 0.90% and Infosys up by 0.81%. On the flip side, Mahindra & Mahindra down by 3.74%, Maruti Suzuki down by 1.11%, Hindustan Unilever down by 1.09%, Bajaj Auto down by 1.08% and Axis Bank down by 0.99% were the top losers.

Meanwhile, the Communication Minister Manoj Sinha has stated that over 7,400 megahertz (Mhz) of spectrum is available with the government for telecom services, of which over 80 percent is in two new spectrum bands identified for mobile telephony. As per the recent reports,770 Mhz specturm is avaialble in 700 Mhz premium band, 275 Mhz in 2100 Mhz band, 58.75 Mhz in 800 Mhz band,46.8 Mhz in 1800 Mhz band 15.6 Mhz in 900 Mhz band. Besides, he said that the government has identified two more bands, 3300-3400 Mhz and 3400-3600 Mhz, for telecom services and only 6050Mhz of the spectrum is available in 3300-3400MHz bands.

However, the Minister has said that the Department of Telecommunications (DoT) is considering to auction 100 Mhz in the 3300-3400 MHz band and 175 Mhz in 3425-3600 Mhz spectrum band. He also said that the government has already sought recommendations from Telecom Regulatory Authority of India (TRAI) on the applicable Reserve Price and related issues for auction of right to use of spectrum above 3000 MHz (3300-3400 MHz and 3400-3600 MHz) besides frequency bands 700 MHz, 800 MHz, 900 MHz, 1800 MHz and 2100 MHz, 2300 MHz and 2500 MHz. Talking on the use of radiowaves for 5G services, he said that the standardisation for 5G technology is expected to be completed around 2020 after which the frequency bands, already auctioned, can be utilised for its deployment.

Besides, the DoT had put 2,354.55 Mhz of spectrum for auction in 2016 across seven bands at a cumulative base price of Rs 5.6 lakh crore. Out of this, bids worth Rs Rs 65,789 crore were received for 964.8 Mhz spectrum. The spectrum in 700 Mhz was put for auction in 2016 but it could not find any taker at price of over Rs 11,000 crore per Mhz fixed by the government. It is considered to be most suitable spectrum for 4G services. The spectrum in 800 Mhz and 1800 Mhz were earlier used for 2G services but now telecom operators are providing 4G services using these frequencies. Radiowaves in 900 and 2100 Mhz band are being used for 2G and 3G services but gradually telecom operators are shifting their services to 4G in these bands.

The CNX Nifty traded in a range of 10,473.95 and 10,426.90. There were 19 stocks in green as against 31 stocks in red on the index.

The top gainers on Nifty were Larsen & Toubro up by 2.11%, HCL Tech up by 2.09%, Hindalco up by 2.01%, Tata Steel up by 1.31% and Hero MotoCorp up by 1.19%. On the flip side, Mahindra & Mahindra down by 3.64%, HUL down by 1.19%, Axis Bank down by 1.16%, Maruti Suzuki down by 1.16% and Zee Entertainment down by 1.13% were the top losers.

The European markets were trading mostly in red; Germany’s DAX decreased 11.41 points or 0.09% to 13,057.76 and France’s CAC was down by 4.63 points or 0.09% to 5,348.14, while UK’s FTSE 100 was up by 17.31 points or 0.23% to 7,542.53.

Asian equity markets made a mixed closing on Thursday as financial markets offered a muted reaction to the passage of major US tax reform, which will lower tax rates for both businesses and individual Americans. Japanese shares closed lower even as the dollar held near a one-week high against the yen, supported by a rise in US bond yields. Meanwhile, Chinese stocks ended higher after Xinhua news agency said the country is committed to maintain economic growth in a reasonable range next year.