Indian equities trim losses; CG, IT down

After making a gap-down opening in early trade, Sensex, Nifty have trimmed losses but continued to trade in red in the late morning session. On the global front, all the Asian equity indices were trading in the red at this point of time as investors are worried about the fiscal crisis in the United States. Moreover, there was concern regarding China’s Communist Party meet to pick a new leader and as Japan’s machinery orders fell more than expected in September.

Back home, traders were seen piling up position in Auto, HC and CD sector while selling was witnessed in CG, IT and Power sector. Tata Motors, Mahindra & Mahindra, Bosch and Cummins India from Auto pack were seen trading in green. However IT stocks - Infosys, TCS, Wipro, HCL Tech, Oracle Financial Services Software, Tech Mahindra and Mphasis edged lower on concerns about upcoming fiscal challenges for the United States and Obama’s anti-outsourcing stance. Power majors NTPC, Power Grid Corp, Tata Power, Reliance Infra, Siemens, and Reliance Power were pressurizing the markets.

In the scrip specific development, Magma Fincorp jumped on inking definitive agreements for acquisition of GEMHF and GEMFSPL. Jubilant FoodWorks’ edged higher as Dunkin’ Donuts launched Premium ‘Giftin Pack’. Gujarat State Petronet rose on reporting marginal rise in Q2 net profit. Tata Motors zoomed on reporting over 8-fold rise in Q2 net profit. Emami trades soared on reporting 20.55% rise in Q2 net profit

The NSE Nifty and BSE Sensex were managing to hold their psychological 5,700 and 18800 levels. The market breadth on BSE was negative, in the ratio of 936:1086. The BSE Sensex is currently trading at 18826.00 down by 76.41 points or 0.40% after trading in a range of 18846.72 and 18736.45. There were 5 stocks advancing against 25 declines on the index.

The broader indices were trading on a mixed note; the BSE Mid cap index was down by 0.16% and Small cap index was up by 0.07%.

The few gaining sectoral indices on the BSE were, Auto up by 1.13% HC up by 0.30 and CD up by 0.10%. While, CG down by 0.96%, IT down by 0.92%, Power down by 0.82%, TECk down by 0.65% and Bankex down by 0.60% were the top losers on the index.

The top gainers on the Sensex were Tata Motors up by 4.29%, Sun Pharma up by 1.38%, Mahindra & Mahindra up by 0.31%, Bharti Airtel up by 0.24% and Coal India up by 0.04%.

On the flip side, Tata Power was down by 2.21%, GAIL was down by 1.70%, L&T was down by 1.58%, Infosys was down by 1.43%, and ICICI Bank was down by 1.39% were the top losers on the Sensex.

Meanwhile, the Cabinet is likely to discuss the issue of levying one-time fee of around Rs 31,000 crore for the spectrum that incumbent telecom companies hold, in its meeting on November 8, 2012. Further, the cabinet is also likely to deliberate upon the issue of funding for Rs 20,000 crore for National Optical Fibre Network that aims to connect 2.5 lakh village panchayats with broadband internet.

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.

Although 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. However out of the total amount, one which sums up to be Rs 11,818 crore, will fall on state run Bharat Sanchar Nigam (BSNL) and Mahanagar Telephone Nigam (MTNL), thereby leaving the government with revenue of Rs 19,109 crore.

The S&P CNX Nifty is currently trading at 5,729.10, down by 31.00 points or 0.54% after trading in a range of 5,738.05 and 5,693.95. There were 9 stocks advancing against 41 declines on the index.

The top gainers of the Nifty were Tata Motors up by 4.33%, Sun Pharma up by 1.53%, Ranbaxy up by 1.34%, BPCL up by 0.82% and Asian Paint up by 0.74%.

On the flip side, Tata Power down by 2.17%, GAIL down by 2.03%, Siemens down by 1.87%, L&T down by 1.57%, and Infosys down by 1.56% were the major losers on the index.

All the Asian equity indices were trading in the red; Kospi Composite  down by 1.45%, Taiwan Weighted   down by 1.02%, Jakarta Composite  down by 0.86%, Straits Times  down by 1.02%, KLSE Composite down by 0.72%, Hang Seng  down by 1.40%, Nikkei 225 down by 1.69%, Shanghai Composite was down by 1.02%.