Benchmarks gathering steam escalate to intra-day high level; Nifty surges near month high level

Benchmark equity indices gaining steam steadily have now escalated to intra-day high level tracing across the globe cheer with Barack Obama winning a second term in the White House, overcoming a stiff initial challenge from his Republican challenger Mitt Romney. Indian equity markets, after gaining for four straight sessions, look set for clocking fifth consecutive session of gains given the bolstered risk appetite. Benchmark 30 share index, Sensex, spurting over century of points, was cruising past the psychological 18900 mark. Similarly, widely followed 50 share index, Nifty, too nudging higher to a month high level, was trading past its 5750 psychological mark. Broader indices too have, puffed up over 3/4 percent.

On the global front, Asian pacific shares warmed to the re-election of Barack Obama as U.S. President. However, with the presidential race out of the way, investors will next focus on the forthcoming U.S. fiscal cliff, a wrenching set of decisions over tax and spending issues.

Closer home, stocks from rate sensitive’s Realty, Bankex and Auto counters mainly have emerged as the shining stars of the trade, which have rallied in the range of 0.90%-2.50%, on hopes of improved buying on account of festive season. On the other end, Fast Moving Consumer Goods and Oil & Gas counters too have emerged as the losers on BSE sectoral front. The overall market breadth on BSE is in the favour of advances which have thumped declines in the ratio of 1589:928, while 123 shares remained unchanged.

The BSE Sensex is currently trading at 18935.33, up by 117.95 points or 0.63% after trading in a range of 18940.49 and 18786.14. There were 23 stocks advancing against 7 declines on the index.

The broader indices were trading in green; the BSE Mid cap and Small cap indices were trading up by 1.10% and 0.80% respectively.

The top gaining sectoral indices on the BSE were, Realty up by 2.87%, Bankex up by 1.10%, Metal up by 1.10%, Auto up by 0.90% and HC up by 0.87%while, FMCG down 0.14% and Oil & Gas down by 0.06% were the only losers on the index.

The top gainers on the Sensex were SBI up by 2.30%, HDFC up by 1.86%, Jindal Steel up by 1.77%, BHEL up by 1.63% and Sterlite Industries up by 1.62%.

On the flip side, Tata Power down by 1.50%, Bharti Airtel down by 0.93 %, HUL down by 0.69%, ITC down by 0.26% and Reliance was down by 0.20% were the top losers on the Sensex.

Meanwhile, the government’s revenue generation target from 2G spectrum auctions may have haywire due to the collapse of the CDMA auction, but it hopes to make up the loss by levying a one-time fee on incumbent telcos. As per Department of Telecommunications (DoT) estimates, the government can mop as much as Rs 30,927 crore by imposing a one-time licence fee on telecom operators, a decision that was taken by an empowered group of ministers (EGoM) on spectrum last month.

However out of the total amount, one third of this fee, which sums up to be Rs 11,818 crore, will fall on state run Bharat Sanchar Nigam (BSNL) and Mahanagar Telephone Nigam (MTNL), where in both the companies have already requested the government to pay the fee for them, leaving them with revenue of Rs 19,109 crore.

However, based on the government calculation, it will get only Rs 10,205 crore from the one-time payment. Out of which, also the exchequer may get only a third of the amount (DOT estimated 19,109) this fiscal, or about Rs 6,000 crore, as telcos have been granted with an option of making staggered payment towards this one-time levy.

Last month, the EGoM headed by finance minister P Chidambaram decided that all existing operators would have to pay a one-time spectrum charge. This one-time spectrum fee is divided into two components. First, telcom companies have to pay for all their 2G spectrum holdings beyond 4.4 MHz and 2.5 MHz in the case of CDMA players prospectively for the remaining period of their licences.

This charge will be linked to the spectrum price in the upcoming auctions scheduled to begin on November 12. Meanwhile, the second component is that incumbent GSM operators such as Bharti, Vodafone, Idea and BSNL will be charged a one-time fee retrospectively for all 2G airwaves they hold beyond the 6.2 MHz mark from July 2008 to December 2012.

The S&P CNX Nifty is currently trading at 5,764.60, up by 40.20 points or 0.70% after trading in a range of 5,767.05 and 5,711.40. There were 39 stocks advancing against 11 declines on the index.

The top gainers of the Nifty were JP Associates up by 5.69%, Reliance Infra up by 2.66%, Bank of Baroda up by 2.52%, DLF up by 2.52% and SBI up by 2.47%.

On the flip side, Tata Power down by 1.60%, Bharti Airtel down by 1.06%, Siemens down by 1.01%, Lupin down by 0.82% and HUL down by 0.73% were the major losers on the index.

Asian markets were trading mostly in the green; Kospi Composite advanced 0.49%, Taiwan Weighted soared 0.70%, Jakarta Composite gained 0.64%, Straits Times gained 0.55%, KLSE Composite edged up by 0.08% and Hang Seng was up by 0.24%. While, Shanghai Composite and Nikkei 225 down by 0.03% and 0.05% were only losers amongst Asian pack.