Benchmarks magnify losses; Telecom stocks ring loud

Benchmark equity indices have magnified their losses on account of the rub-off effect of pessimistic global environment, which has triggered growing risk aversion amongst Indian equity markets too. After showcasing some recovery, benchmarks have now slipped to intra-day’s low on account of persistent profit-booking in Capital Goods, Power and Bankex counters, which currently languishing at the bottom are trading with deep cuts of over 0.50%. On the flip side, Auto and Fast moving Consumer Goods stocks are trying to cut short the losses. 30 share index, Sensex, plummeting over century of points, is trading below 18800 level, while 50 share index, Nifty, losing over quarter of points, trading below the psychological 5750 level. Meanwhile, broader indices too have capitulated to selling pressure.

On the global front, Asian shares have extended losses on Thursday as investors remain worried about the fiscal crisis in the United States and the European economy's further deterioration, underpinning the safe-haven dollar and yen as well as US Treasuries on safety bids.

Back home, telecom stocks such as Idea Cellular, Bharti Airtel and Reliance Communication rang loud, after Union Cabinet headed by Prime Minister Manmohan Singh, accepting the recommendations of Empowered Group of Ministers, approved levy of one-time spectrum charge on all existing telecom operators. Earlier, the EGoM had proposed that GSM-based telecom companies pay for their entire 2G spectrum holding beyond 4.4 MHz, while CDMA players were to pay the levy beyond 2.5 MHz holding prospectively for the remaining period of their licences. The overall market breadth on BSE is in the favour of declines which have thumped advances in the ratio of 1396:1081, while 134 shares remained unchanged.

The BSE Sensex is currently trading at 18798.31, down by 104.10 points or 0.55% after trading in a range of 18865.21 and 18736.45. There were 6 stocks advancing against 24 declines on the index.

The broader indices too edged lower; the BSE Mid cap and Small cap indices were trading lower by 0.29% and 0.15% respectively.

The few gaining sectoral indices on the BSE were, Auto up by 0.87% and FMCG up by 0.06%. On the flip side, CG down by 1.56%, Power down by 0.96%, Bankex down by 0.91%, Oil & Gas down by 0.86% and Realty down by 0.84% were the top losers on the index.

The top gainers on the Sensex were Tata Motors up by 4.36%, Bharti Airtel up by 1.44%, Sun Pharma up by 1.04%, Wipro up by 0.68% and Coal India up by 0.46%.

On the flip side, GAIL India down by 2.39%, Tata Power down by 2.12%, L&T down by 2.07%, ICICI Bank down by 1.59% and Infosys was down by 1.26% were the top losers on the Sensex.

Meanwhile, amid stringent availability of fuel, the Planning Commission deputy chairman Montek Singh Ahluwalia has urged for a speedy resolution on pooling price of domestic and imported coal and gas to avail the feed stock for power plants at a reasonable rate.

The directive will average out the domestic fuel prices with expensive imported fuel to make it reasonable for the fuel-starved power plants in India. He also noted that the biggest problem in the short term or 2-3 years is fuel supply and stressed on the need to garner more investments into the power sector.

Montek stressed that the non-performance of power sector has a ripple effect on banks and financial institutions, while noting that the financing by banks in either generation or transmission requires having viability of the operation on the basis of the quality of the entrepreneur on project management skills to avoid the risk born by the institution.

He also pitched for proper implementation of Electricity Regulation Act and urged to promote larger number of consumers of power to enter into purchase agreements to trigger the sector.

The S&P CNX Nifty is currently trading at 5,724.45, down by 35.65 points or 0.62% after trading in a range of 5,742.30 and 5,693.95. There were 10 stocks advancing against 40 declines on the index.

The top gainers of the Nifty were Tata Motors up by 4.38%, Bharti Airtel up by 1.59%, Sun Pharma up by 1.33%, Asian Paints up by 1.29% and BPCL up by 0.59%.

On the flip side, GAIL down by 2.73%, L&T down by 2.21%, Tata Power down by 2.02%, Reliance Infra down by 1.95% and JP Associates down by 1.92% were the major losers on the index.

All the Asian equity indices were trading in the red; Kospi Composite plunged 1.21%, Taiwan Weighted lost 0.61%, Jakarta Composite declined by 0.87%, Straits Times plunged 1.20%, KLSE Composite slid 0.52%, Hang Seng plummeted 1.93%, Nikkei 225 descended 1.51% and Shanghai Composite shed 1.53%.