Benchmarks remain in red zone with slender losses

Support emerged at low levels, pulling out Indian equity markets from intra-day’s low; however, benchmark equity indices despite recuperating substantial ground are oscillating in negative terrain, albeit with slender losses. Bleak global set-up, is mainly dissuading investor’s from building on long positions, however big losses in stocks from Metal, Capital Goods and Auto counters was adding to the pessimism. 30 share index, Sensex, is holding near its previous closing level, which is above 17650 mark, while Nifty, gyrating in red, is still trading sub 5350 psychological mark. The broader indices, too have pruned losses.

Much of the pressure is being exerted from Banking index, which sliding for fourth consecutive session, is featuring in the list of worst performers on BSE sectoral chart. Continued worries about weakening economic growth at a time when parliament proceedings remain deadlocked, is perturbing this rate sensitive counter. Meanwhile, street is widely expecting India's economy to have grown 5.3 percent in the April-June quarter, unchanged from January-March quarter.

On the global front, European equities tracing Asian shares are depicting cautious move on investor ahead of a gathering of central bankers and economists in Wyoming later in the week which could shed some light on further stimulus plans.

Closer home, Power stocks, in the likes of Tata Power, Reliance Power and Adani Power, too could gain traction, as in much relief of India’s power producers that own 12,000 mw of capacity that use imported coal, the Attorney General of India, has cleared the way for a hike in tariff of electricity from private producers by saying that the central regulator should have the right to increase tariffs irrespective of the contracts signed by power producers with distribution companies. Moreover, stocks from Information Technology, Fast Moving Consumer Goods and Power counters, at the moment, are attempting to limit the losses of the bourses. However, the overall market breadth on BSE is in the favour of declines which piped advances in the ratio of 1567:797, while 127 shares remained unchanged.

The BSE Sensex is currently trading at 17674.23, down by 4.58 points or 0.03% after touching a high of 17712.35 and low of 17632.60. There were 13 stocks advancing against 17 declines on the index. The broader indices pruned some losses; the BSE Mid cap index was down by 0.67%, while Small cap index was down by 0.69%.

The top gainers on the BSE sectoral space were, IT up by 1.07%, TECk up by 0.66%, FMCG up by 0.34% Power up by 0.23%, and Realty up by 0.05%, while Metal down by 1.89%, CG down by 0.99%, Auto down by 0.49%, PSU down by 0.37% and Bankex down by 0.32% were top losers on the index.

Tata Power up by 2.74%, TCS up by 1.52%, Infosys up by 1.28%, NTPC up by 0.92% and Wipro up by 0.83% were the major gainers on the Sensex, while Jindal Steel down by 3.90%, Sterlite Industries down by 3.63%, Tata Steel down by 2.18%, Hindalco Industries down by 1.77% and Bajaj Auto down by 1.38% were the major losers on the index.

Mean while, the Department of Telecommunications (DoT) has released an Information Memorandum (IM) on the auction of second-generation spectrum, with Delhi being the most expensive at a reserve price of Rs 693.06 crore per block of 1.25 MHz and Rs 900 crore for GSM and CDMA respectively. Delhi includes local areas served by Delhi, Ghaziabad, Faridabad, Noida, and Gurgaon telephone exchanges.

Mumbai is not far behind either, as the reserve price for Mumbai is the second highest at Rs 678.45 crore (per 1.25 MHz) and Rs 900 crore for GSM and CDMA respectively. Mumbai means local areas served by Mumbai, Navi Mumbai and Kalyan telephone exchanges.

As per IM, block size shall be 1.25MHz (Paired), while a minimum of 8 blocks each of 1.25MHz (10MHz) will be put to auction in all service areas. Although the existing operators will be permitted to take maximum two blocks of 1.25MHz each in every service area, new entrants will be required to bid for minimum of 4 blocks each of 1.25 MHz in each service area. Additionally, new entrants will also be allowed to bid for one additional block of 1.25MHz in each service area.

DoT is expected to issue a notice inviting applications on September 28, while the last date of submission of application, as detailed in IM, would be October 19. Meanwhile, the final list of bidders is expected to be released on November 6. This will be followed by a mock auction on November 7 and 8 and thereafter the e-auction of 1,800 MHz band will take place on November 12.

Further, DoT has also fixed the earnest money, a deposit a buyer makes to the seller to show its faith in a transaction, for pan-India bidding at Rs 442 crore for 2G spectrum in the 1,800 Mhz band across the country, while the base price pegged for acquiring pan-India spectrum was fixed at Rs 14,000 crore for 5 Mhz in the 1,800 Mhz band and 1.3 times higher for the 800 Mhz band.

The S&P CNX Nifty is currently trading at 5,338.05, down by 12.20 points or 0.23% after trading in a range of 5,359.25 and 5,331.80. There were 16 stocks advancing against 34 declines on the index.

The top gainers on the Nifty were Tata Power up by 2.43%, TCS up by 1.53%, Infosys up by 1.39%, NTPC up by 1.07% and Wipro up by 0.98%. While, Jindal Steel by 4.36%, Sterlite Industries down by 4.13%, Sesa Goa down by 2.88%, Tata Steel down by 2.53% and Hindalco Industries down by 2.18% were the top losers on the index.

Asian indices were mostly trading in the red zone; Nikkei 225 declined 0.57%, KLSE Composite lost 0.05%, Taiwan Weighted plunged1.42%, Jakarta Composite shed 0.08% and Kospi Composite Index down by 0.08%,, while Hang Seng index gained 0.10%, Straits Times rose 0.03% ad Shanghai Composite added 1.26% were few gainers.

European shares got off to a negative start; CAC 40 declined 0.78%, DAX slid 0.62% and FTSE 100 slid 0.23%.