Benchmarks make gap-up opening on sanguine global cues

Indian benchmarks have kick-started the trade with a gain of about a percent on Monday morning as global markets rallied quite sharply on Friday after stronger than expected US payroll data and some positive cues from Euro-zone. The Asian stocks were up and the Euro also gained after there was positive news on the Greece bailout. There was positivity in the American markets as well. This was because the US economy added twice the number of jobs in July compared to the previous month. Back home, sustained buying in most of the key heavyweights along with broader indices supported BSE’s -- Sensex -- and NSE’s -- Nifty -- to regain their crucial 17,400 and 5,250 levels respectively. All the sectoral indices have opened higher. The BSE metal index is the top sectoral gainer, up by 1.65%. Capital goods, auto, bankex, auto, oil & gas, power and healthcare indices have also opened higher by 0.8-1% each. Meanwhile, the sentiments were also supported by telecom stocks like Idea Cellular, Bharti Airtel, Reliance Communication and MTNL, which edged higher after fixing the minimum price at Rs 14,000 crore for 5 units of GSM airwaves in the 1800 MHz, the panel of ministers on spectrum, headed by finance minister P Chidambaram, will meet today to consider a revised timeline for the spectrum auctions, as the government may not be able to meet the deadline for completing the sale process by this month-end. The broader indices too were going neck to neck with benchmarks. The market breadth on the BSE was positive; there were 1,007 shares on the gaining side against 292 shares on the losing side while 48 shares remained unchanged.

The BSE Sensex opened at 17,313.05; about 116 points higher compared to its previous closing of 17,197.93, and has touched a high of 17,407.09 while low remain its opening.

The index is currently trading at 17,398.55, up by 200.62 points or 1.17%. There were 28 stocks advancing against only 2 declines on the index.

The overall market breadth has made a strong start with 74.76% stocks advancing against 21.68% declines. The broader indices too were trading firmly; the BSE Mid cap and Small cap indices rose 0.93% and 1.03% respectively.

The top gaining sectoral indices on the BSE were, Metal up by 1.65%, CG up by 1.58%, Auto up by 1.46%, Bankex up by 1.46% and Oil and Gas up by 1.39%. While, there were no losers on the index.

The top gainers on the Sensex were Tata Motors up by 2.78%, RIL up by 2.60%, Tata Steel up by 2.47%, GAIL up by 1.85% and L&T up by 1.79%. While, ONGC down by 0.55% and Dr Reddy down by 0.48% remained the few losers on the Sensex.

Meanwhile, the Union Cabinet of India has reduced the reserve price for auction of second-generation or 2G licenses by almost a quarter from the recommended, at Rs 14,000 crore ($2.5 billion) or at about 7.4 times the 2008 price, for five units of airwaves in the 1800 MHz band for all of India's 22 telecoms zones, or around Rs. 2,800 crore per MHz.

The Cabinet approved the recommendations of the panel of ministers on spectrum to keep the reserve price of the 800 MHz band (used by telcos on the CDMA platform) at 1.3 times that of the 1800 MHz band. It had also decided to continue with the existing annual airwave usage slab of between 3 and 8 percent of companies' revenue, higher than a flat 3 percent rate suggested by the sector regulator.

India is selling 2G license for the first time through an open auction, after the Supreme Court said a 2008 grant process was flawed and ordered all 122 zonal permits awarded in that year to be revoked. The base price is a 23% cut from the telecoms sector regulator's proposed price of Rs 181.1 billion.

Telecom companies went disappointed on the move as pricing would put too big a burden on telecom operators who would have to pass on the expense to subscribers, which would threaten the industry. India is the world’s second fastest growing mobile phone market on the basis of low tariffs.

The S&P CNX Nifty opened at 5,260.85; about 45 points higher compared to its previous closing of 5,215.70, and has touched a high of 5,280.55 while low remained its opening.

The index is currently trading at 5,279.70, higher by 64.00 points or 1.23%. There were 46 stocks advancing against 4 declines on the index.

The top gainers of the Nifty were Tata Motors up by 2.81%, Reliance Industries up by 2.77%, JP Associates up by 2.73%, SAIL up by 2.54% and Reliance Infra up by 2.47%.

On the flip side, BPCL down by 0.91%, ONGC down by 0.57%, Dr Reddy down by 0.46% and Ranbaxy down by 0.04% remained the only losers on the index.

All the Asian equity indices were trading in the green; Shanghai Composite was up by 2.63 points or 0.12% to 2,135.42, Hang Seng surged by 399.91 points or 2.03% to 20,066.09, Jakarta Composite gained 26.98 points or 0.66% to 4,126.83, KLSE Composite was up by 4.15 points or 0.25% to 1,639.00, Nikkei zoomed by 147.23 points or 1.72% to 8,702.34, Straits Times was added 27.27 points or 0.90% to 3,078.50, Kospi Composite surged by 36.33 points or 1.96% to 1,884.60 and Taiwan Weighted has added 82.37 points or 1.14% to 7,299.88.