Benchmarks continue to trade in green

Indian equity benchmarks continued their trade in green in morning session on account of buying in frontline blue chip counters. The rupee saw a distinctly weak start against the US dollar, with the latter recapturing some of the lost ground. Buying support from banks and importers gave the greenback more strength. The sentiments were upbeat with Suresh Prabhu’s statement that the government will soon come out with a comprehensive strategy to increase the share of global trade to 40 per cent of the gross domestic product (GDP), which is expected to touch $5 trillion by 2025. According to the Federation of Indian Export Organisation (FIEO), the current share of exports in GDP is only 18-19%. Select telecom companies stocks were buzzing on report that the Cabinet is likely to decide next month on the relief package for the telecom sector, based on the recommendations of an inter-ministerial group, including giving more time to telecom operators to make payment for spectrum and increasing the holding limit of radio waves. The sector’s debt is estimated to be around Rs 4.6 lakh crore and a decline in the margins of telecom companies due to stiff competition in the market is said to have pushed it to financial stress.

Meanwhile, PSU banking stocks were trading under pressure on Punjab National Bank (PNB) fraud. The Income Tax Department has attached seven properties of the Gitanjali Group and its promoter Mehul Choksi in Mumbai in connection with a tax evasion probe against them. Separately, the Central Bureau of Investigation (CBI) booked the directors of Rotomac Pen company on charges of cheating and wilfully defaulting on loans of Rs 3,695 crore. Vikram Kothari, his wife Sadhana Kothari and son Rahul Kothari - all directors - have been booked by the CBI on charges of cheating a consortium of seven banks led by Bank of Baroda. Investors took note that the Goods and Services Tax (GST) Council, headed by Finance Minister Arun Jaitley, is likely to meet next week to decide on ease of compliance in filing the GST returns. Since the implementation of the GST on July 1, 2017, traders have been complaining about technical glitches in the GSTN, besides the complex process. 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. February 2018 series to next month i.e. March 2018 series. The near month February 2018 derivatives contracts will expire on Thursday i.e. February 22, 2018.

Traders were seen buying in Metal, Consumer Durables and IT stocks, while selling was witnessed in Realty, energy and Healthcare sector stocks. In scrip specific development, JSW Energy was trading in green on signing pact with Maharashtra government for setting up manufacturing unit for electric vehicles (EV) and energy storage systems in the state. Suven Life Sciences was trading in green on receiving grant of one product patent from India and one product patent from South Korea corresponding to the new chemical entities (NCEs) for the treatment of disorders associated with Neurodegenerative diseases.

On the global front, Asian markets were trading mostly in red. The Bank of Japan will likely continue its virtual normalization of monetary policy under its new leadership. The appointment of Masazumi Wakatabe as a deputy governor is unlikely to change the course of policy toward additional easing. Back home, the BSE Sensex and NSE Nifty were trading above the psychological 33,800 and 10,400 levels respectively. The market breadth on BSE was positive in the ratio of 1325:951 while 107 scrips remained unchanged.

The BSE Sensex is currently trading at 33889.10, up by 114.44 points or 0.34% after trading in a range of 33753.50 and 33960.95. There were 21 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.34%, while Small cap index was up by 0.28%.

The top gaining sectoral indices on the BSE were Metal up by 1.15%, Consumer Durables up by 1.11%, IT up by 0.92%, TECK up by 0.84% and Basic Materials up by 0.66%, while Realty down by 0.50%, Energy down by 0.21%, Healthcare down by 0.09% and PSU down by 0.02% were the only losing indices on BSE.

The top gainers on the Sensex were Hero MotoCorp up by 1.24%, TCS up by 1.21%, Tata Steel up by 1.18%, Bharti Airtel up by 1.16% and IndusInd Bank up by 1.02%.

On the flip side, Reliance Industries down by 0.52%, Sun Pharma down by 0.35%, Kotak Mahindra Bank down by 0.33%, Mahindra & Mahindra down by 0.25% and Maruti Suzuki down by 0.23% were the top losers.

Meanwhile, the cabinet is likely to decide next month on the relief package recommended by the inter-ministerial group (IMG) for the telecom sector which is reeling under financial stress. IMG had recommended a few measures for the sector including giving more time to telecom companies to pay for the spectrum they buy and increasing the holding limit of radiowaves. The Telecom Commission, the apex decision-making body at the Department of Telecom, has cleared some of the key recommendations made by IMG formed to chalk out relief measures for the debt-ridden sector.

The Telecom Commission had approved extension of time period for the payment of spectrum bought in auctions by telecom companies to 16 years from the current 10 years, as recommended by the IMG. It had also approved the IMG’s recommendation to lower the interest rate on penalties paid by telecom operators by about 2 percent. Last month, the panel concurred with sectoral regulator the Telecom Regulatory Authority of India’s (Trai) suggestion to raise spectrum holding limit of mobile operators which will ease the exit route for those under stress. The Trai had recommended last month the removal of ceiling on spectrum held by mobile operators within a particular band, while suggesting a 50 percent cap on combined radiowave holding in efficient bands like 700 MHz, 800 MHz and 900 MHz. Trai had also suggested that the overall cap on holding spectrum should be raised from the current 25 percent to 35 percent.

According to the current rules, no mobile service provider can hold more than 25 percent spectrum, vital for transmitting signals, in an area and more than 50 percent in a frequency band. If these suggestions are accepted by the Department of Telecom (DoT), they would provide a major relief for the soon-to-be-merged Idea Cellular and Vodafone, as they would have breached the spectrum cap in certain locations under the existing rules. It would also enable aggressive newcomer Reliance Jio to pick up additional spectrum, if needed, in bands like 800 MHz.

The CNX Nifty is currently trading at 10407.30, up by 28.90 points or 0.28% after trading in a range of 10358.50 and 10429.35. There were 32 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were Vedanta up by 2.17%, TCS up by 1.29%, Tata Steel up by 1.15%, Bharti Airtel up by 1.12% and Dr. Reddy’s Lab up by 1.07%.

On the flip side, Bharti Infratel down by 1.35%, Aurobindo Pharma down by 1.12%, Cipla down by 0.78%, Reliance Industries down by 0.59% and SBI down by 0.58% were the top losers.

The Asian markets were trading mostly in red; Nikkei 225 decreased 187.42 points or 0.85% to 21,961.79, Hang Seng decreased 137.51 points or 0.44% to 30,977.92, Jakarta Composite decreased 42.98 points or 0.64% to 6,646.30, KOSPI Index decreased 22.49 points or 0.92% to 2,420.33 and FTSE Bursa Malaysia KLCI decreased 1.04 points or 0.06% to 1,856.28.

Taiwan and Shanghai Stock Exchanges were closed on account of National holiday.