Benchmarks recover from intra-day’s low; oscillate around neutral line

After recovering from its intra-day low level, benchmark equity indices oscillating around its neutral line with slender gains, are keeping Indian equity markets in positive territory. Positive opening of European markets combined with mostly positive regional counterparts, are mainly preventing the downside chances of Indian equity markets, which after getting a gap-up opening, seem set for a positive close. Amid alternate bouts of buying and selling, 30 share index, Sensex on BSE, is currently trading off its 18600 mark, while 50 share index, Nifty, on NSE too hanging with slender gains, is trading below the 5650 crucial level. Additionally, broader indices trading listlessly, too are staging mixed trend.

On the global front, Asian shares surged to their highest in over five months on Wednesday as strong U.S. earnings reports lifted investor mood, and also as Spain retained an investment-grade debt rating. Meanwhile, European shares got a positive start as two German lawmakers said the country is open to Spain seeking a precautionary credit line from Europe’s rescue fund, and German investor confidence advanced more than expected in October. German investor sentiment improved for a second month in October.

Closer home, stocks from Consumer Durable, HealthCare and Fast Moving Consumer Goods were the bright spots of the trade, while stocks from Oil & Gas, Metal and Realty, provided a ceiling to the gains of bourses. In stock-specific activities, HCL Technologies gained 0.15 percent after posting a bigger-than-expected surge in July-Sept earnings, while Maruti Suzuki extended Tuesday's gains on hopes for the sales potential of its revamped Alto model. The overall market breadth on BSE was in the favour of declines which thrashed advances in the ratio of 1318:1221, while 133 shares remained unchanged.

The BSE Sensex is currently trading at 18582.59, up by 4.89 points or 0.03% after trading in a range of 18705.19 and 18561.02. There were 18 stocks advancing against 12 declines on the index.

The broader indices were showcasing mixed trend; the BSE Mid cap index was down by 0.14% and Small cap index was up by 0.16%.

The top gainers on the BSE sectoral space were, CD up by 0.67%, HC up by 0.51%, FMCG up by 0.28%, Auto up by 0.25% and Power up by 0.04%. While, Oil & Gas down by 0.58%, Metal down by 0.43%, Realty down by 0.28%, IT down by 0.19% and PSU down by 0.10%, were the top losers on the sectoral space.

The major gainers on the Sensex were Tata Power up by 1.87%, Maruti Suzuki up by 1.01%, HDFC and ITC were up by 0.89% and ICICI bank up by 0.59%. On the other hand, GAIL India down by 1.74%, TCS down by 1.20%, Reliance down by 1.19%, Hero MotoCorp down by 0.51% and Sterlite down by 0.50% were the major losers on the Sensex.   

Meanwhile, standing firm on earlier opinion, Attorney General (AG) has refused to give any fresh opinion on the inter-ministerial panel's decision of charging one-time fee for existing second-generation (2G) airwaves that would match the upcoming auction-determined price.

Highest law official in the country, Attorney-General Goolam E Vahanvati, earlier opined that only incumbent GSM operators such as Bharti, Idea, BSNL and Vodafone should be charged the auction-determined fee for excess airwaves they hold beyond the 6.2 MHz limit that too with a retrospective basis from July 2008.

The Empowered Group of Ministers (EGOM), however in the last week dismissing Attorney General's opinion, decided to charge all GSM operators prospectively a one-time fee for the remaining period of their 20-year licence for spectrums beyond 4.4 Mhz and CDMA operators to pay for all spectrum beyond 2.5 Mhz.

A day before the EGoM's meeting, Montek Singh Ahluwalia, casting its support in the favour of AG’s decision, averred that mobile phone companies should not be charged for airwaves up to the 6.2-MHz limit, as this was the contracted spectrum, and also squabbled that telcos made investments and built a market strategy on getting this quantum of airwaves, while adding that imposing a charge at this point would amount to unilaterally rewriting the contract.

The EGOM, however, was of the view that certain facts which the AG may not have taken into consideration for charging for spectrum above 6.2 MHz  is that the telecom department may be forced to give additional spectrum free to all those telcos who till now only have 4.4 MHz.

Further, the EGoM also felt that this will be against the spirit of the Supreme Court's order and therefore wanted a fresh opinion from the AG, which would be placed before the Union Cabinet, scheduled to meet on October 18 to decide on the EGoM’s recommendations. However, it remains important to be noted, that the industry will have to shell out a minimum of Rs 27,000 crore if the Union Cabinet clears the proposal in its meeting tomorrow.

The S&P CNX Nifty is currently trading at 5,648.55, up by 0.55 points or 0.01% after trading in a range of 5,684.35 and 5,640.45. There were 30 stocks advancing against 20 declines on the index.

The top gainers of the Nifty were Tata Power up by 1.87%, Lupin up by 1.70%, Cairn up by 1.60%, PNB up by 1.45%, and Grasim Industries up by 1.20%. While, Ambuja Cement down by 2.65%, GAIL down by 1.84%, DLF down by 1.80%, ACC down by 1.59% and TCS down by 1.33% were top losers on the index

Asian equity indices were trading mostly in the green; Kospi Composite advanced 0.70%, Shanghai Composite added 0.43%, Hang Seng spurted 0.97%, KLSE Composite rose 0.30%, Nikkei 225 surged 1.21% and Straits Times gained 0.33% while Taiwan Weighted down by 0.09% and Jakarta Composite down by 0.05% were the losers amongst Asian pack.

European markets got off to a positive start; with CAC 40 adding 0.40%, DAX adding 1.58% and FTSE 100 rallying by 1.12%.