Sensex, Nifty holds early gains; Nifty above 5,650 level

After opening on a firm note this morning, Indian equity markets remained fairly up in positive territory amid sustained buying at several counters. Better than expected quarterly results of some corporate and better sales data from leading automobile manufacturers are adding to the firm trend in the market. In currency markets, rupee appreciated against dollar on increased capital inflow. On sectoral front, capital goods, auto, IT, metal and realty stocks were trading in green, while consumer durables and oil stocks were trading in red. In global markets, Asian shares advanced with returning risk appetite on Friday as overnight data suggested some stabilization in the global recovery trend. Back home, the market breadth favoring positive trend; there were 1,526 shares on the gaining side against 908 shares on the losing side while 120 shares remain unchanged.

The BSE Sensex is currently trading at 18,710.16 up by 148.46 points or 0.80% after trading in a range of 18,749.07 and 18,687.93. There were 24 stocks advancing against 5 declines and one remains unchanged on the index.

The broader indices were also trading in green; the BSE Mid cap index was up by 0.58% and Small cap index was up by 0.74%.

The top gaining sectoral indices on the BSE were, CG up by 1.75%, IT up by 1.38%, TECk up by 1.14%, Auto up by 0.96%, and Metal up by 0.91%, while, CD down 0.04% and Oil & Gas down 0.01% were top losers on the sectoral space.

The top gainers on the Sensex were Bajaj Auto up by 2.33%, L&T up by 2.26%, M&M up by 1.89%, Hero MotoCorp was up by 1.88% and Infosys up by 1.57% while, Bharti Airtel down by 1.16%, HUL down by 0.74%, Sun Pharma down by 0.34%, Reliance down 0.33% and Tata Motors down by 0.26% were top losers on the Sensex.

Meanwhile, in an big respite to incumbent GSM operators, the empowered group of ministers (EGoM) led by finance minister P Chidambaram on November 1 decided to permit partial spectrum re-farming, wherein operators will be allowed to retain 2.5 mega hertz (MHz) through an administrative allotment by paying an auction-determined price. However, the companies after this move would have to pay a price either way, at a rate to be determined after the auctions, which will get over only mid-next year.

The decision, which is based on the recommendation of the Department of Telecommunications (DOT) and is yet to travel to the Cabinet for final clearance, has seen opposition from the association of operators representing Bharti Airtel, Vodafone and Idea Cellular.

Telecom minister Kapil Sibal on Oct 31 informed that decision on the issue will be taken before the auction for the spectrum gets operational by November 12. Meanwhile, the 1800 MHz spectrum auction commences on November 12, while the process for the 900 MHz auction starts in March and gets over in June next year. Further, clearing the air on partial spectrum re-farming, Sibal underscored that as per the decision taken, companies with 5 MHz spectrum will vacate the space. ‘Operators can keep 2.5 MHz spectrum.’ Sibal further added that market price applies for 2.5 MHz and spectrum acquisition will be via auction. ‘Auctions will be 18 months before expiry of licence.’

However, this decision is expected to benefit the companies operating with 900 Mhz band will, which is based on the recommendation of the Telecom Commission, which differed from an earlier plan by the government to ask for an altogether migration of the telecom operators to the new 1,800 MHz band. Now these companies can retain 2.5 MHz and will have to buy at least another 2.5 MHz from an auction, next year. The base price for that auction will be determined from the price arrived at in the upcoming auction for 1,800 Mhz band. Nevertheless, the GSM industry is opposed to refarming as an additional cost of at least Rs 100,000 crore for replacement airwaves and changing gear would have to borne by them.

The S&P CNX Nifty is currently trading at 5,684.85, up by 39.80 points or 0.71% after trading in a range of 5,697.70 and 5,682.55. There were 43 stocks advancing against 7 declines on the index.

The top gainers of the Nifty were Bajaj-Auto up by 2.39%, Ambuja Cement up by 2.10%, L&T up by 2.06%, M&M up by 1.92% and Hero MotoCorp up by 1.62%.

On the flip side, Bharti Airtel down by 1.32%, HUL down by 0.76%, Sun Pharma down by 0.71%, Tata Motors down by 0.56%, and Reliance down by 0.41% were the top losers on the index.

Asian equity indices were trading mostly in the green; Kospi Composite was up by 1.07%, Nikkei 225 up by 1.17%, Taiwan Weighted up by 0.43%, Straits Times was up by 0.65%, Shanghai Composite was up by 0.64% and Hang Seng was up by 1.46%, while Jakarta Composite down by 0.03% and KLSE Composite down by 0.72% were the losers.