Benchmarks pare gains; September IIP number exhibit 0.4% contraction

After making a decent start, Indian equities pared gains but continued firm trade in green in the late morning session. While, most of the Asian markets were trading in the red after Japan’s economy shrank at the fastest pace since last year’s earthquake. Back home, India's annual industrial output growth measured by index of industrial production (IIP), witnessed contraction of 0.4% at 163.6 for the month of September 2012 against the growth figure of 2.7% in the previous month, which later got revised downwards to 2.3%. The cumulative growth for the period April-September 2012-13 over the corresponding period of the previous year stands at 0.1%. The indices of industrial production for the mining, manufacturing and electricity sectors for the month of September 2012 stand at 114.8, 174.7 and 149.7 respectively. Traders were seen piling up position in FMCG, TECk and IT sector while selling was witnessed in Oil &Gas, Metal and Auto sector. Hindustan Unilever, United Spirits, Colgate-Palmolive (India), Godrej Consumer Products, from FMCG pack were seen trading in green. While, Infosys, TCS, Wipro, HCL Tech, Oracle Financial Services Software and Tech Mahindra from IT pack were in green. However Metal stocks - Tata Steel, Coal India, Jindal Steel, and Hindalco Industries were capping the markets’ gains. Oil & Gas majors RIL, Oil and Natural Gas Corporation, Cairn India, Bharat Petroleum Corporation, Indian Oil Corp and Petronet LNG were pressurizing the markets.

In the scrip specific development, Ashok Leyland jumped on launching range of Haulage trucks.  TTK Healthcare gained on plan of investing about Rs 40 crore in next two years.  Jain Irrigation Systems rose on reporting three fold jumps in Q2 net profit. TCPL Packaging soared on inking technical collaboration agreement with AR Packaging Group. DQE zoomed on entering into exclusive licensing deal with ABC. Four Soft surged on inking pact with TL Logicom.

 The NSE Nifty and BSE Sensex were managing to hold their psychological 5,650 and 18700 levels. The market breadth on BSE was positive, in the ratio of 1161:911.

The BSE Sensex is currently trading at 18715.61 up by 31.93 points or 0.17% after trading in a range of 18750.92 and 18687.08. There were 12 stocks advancing against 18 declines on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.47% and Small cap index was up by 0.45%.

The top gaining sectoral indices on the BSE were FMCG up by 0.86%, TECk up by 0.80%, IT up by 0.74%, CD up by 0.65%, Bankex up by 0.52% and. While, Oil &Gas down by 0.27%, Metal down by 0.24% and Auto down by 0.18% were the losers on the index.

The top gainers on the Sensex were Bharti Airtel up by 1.73%, TCS up by 1.44%, Sterlite Industries up by 0.80%, GAIL up by 0.77% and HDFC Bank up by 0.74%.

On the flip side, Tata Steel was down by 1.43%, Maruti Suzuki was down by 1.00%, Coal India was down by 0.98%, Bajaj Auto  was down by 0.60% and Hero MotoCorp was down by 0.59% were the top losers on the Sensex.

Meanwhile, the government will start 2G auction, the most ambitious one to garner Rs 40,000 crore revenue target it seeks to achieve by selling spectrum. The auction of the 2G spectrum freed from cancellation of 122 telecom licences by the Supreme Court in February will start at 9 am on Monday. The final price will then determine the amount that government will get from onetime levy on spectrum held by existing operators beyond 4.4 MHz.

Last week, the government has pushed through the proposal to refarm spectrum in the 900-MHz band to 1,800 MHz, allowing incumbent operators to keep only 2.5 MHz and has imposed a one-time spectrum charge on incumbent GSM operators for spectrum they hold beyond 4.4 MHz and 2.5 MHz for CDMA players. An auction base price has been fixed at Rs 14,000 crore for five MHz in the 1,800-MHz band, which is around seven times more than the price of Rs 1,658 crore at which telecom companies were allotted licences permits between 2001 and 2008.

The department of telecommunications (DoT) will only auction 370 MHz instead of the entire spectrum of 431 MHz freed from cancellation of licences, which belonged to eight telecom players, in a bid to attract high price. Though some telcos concern that the Supreme Court has asked the government to immediately explain why it is restricting the sale of airwaves in the upcoming auctions, and not selling all spectrum vacated by the 122 licences whose permits were cancelled earlier this year.  

The S&P CNX Nifty is currently trading at 5,698.25, up by 12.00 points or 0.21% after trading in a range of 5,718.90 and 5,688.15. There were 33 stocks advancing against 16 declines while 1 stock remains unchanged on the index.

The top gainers of the Nifty were TCS up by 1.58, Bharti Airtel up by 1.58%, HCL Tech up by 1.19%, IDFC up by 1.10% and GAIL up by 1.00%.

On the flip side, DLF down by 1.66%, Tata Steel down by 1.50%, Coal India down by 1.00%, Maruti Suzuki down by 0.91% and Hero MotoCorp down by 0.71%, were the major losers on the index.

Most of the Asian equity indices were trading in the red; Kospi Composite down by 0.07%, Jakarta Composite down by 0.26%, Straits Times down by 0.06%, KLSE Composite down by 0.09%, Nikkei 225 down by 0.61% and Taiwan Weighted  down by 0.16%  while Shanghai Composite was up by 0.13% and Hang Seng up  by 0.24% were the gainers.