Benchmarks consolidate early gains; Telecom stocks sustain uptrend

Indian equity markets continue to be in consolidation mode, with benchmark equity indices currently sustaining previous held gains, as market-participants await cues from proceedings in the Parliament during the winter session. 30 share barometer index, Sensex, despite gaining close to quarter percentage, continue to trade sub 18500 psychological level, while 50 share barometer index, Nifty, trading around the neutral line, is oscillating above the crucial 5600 mark. The broader indices too are trading in fine contour. However, overall subdued global set-up, mainly are capping the up-move of local barometer gauges. European stock index futures are signaling a slightly lower opening on Friday as investors positioned for a tough start to budget talks in the United States and Europe's poor economic prospects. Meanwhile, Asian markets continue to stage mixed trend on Friday, as concerns over the U.S. fiscal cliff still weighed on sentiment, while Japanese stocks continued to benefit from a weaker yen.

Back home, in sector specific activities, telecom stocks such as Bharti Airtel, Idea Cellular and Reliance Communications, registered gains in a choppy market for third day in a row after the failed auction forced government to make a reference to TRAI for fresh recommendation on pricing. On BSE sectoral front, Technology, Information Technology (IT) and Heath Care (HC) counters, were among the top gainers. Short-Covering activities after previous session’s nasty laceration mainly lifted up the stocks of Information Technology counter.

On the flip side, Auto, Consumer Durable and Bankex counters emerged as the spoil sport. Banking stocks, which were trading downbeat from the start of the trade, magnified losses after Central bank governor Duvvuri Subbarao, said that India's inflation rate of 7.5 percent is still high, thereby dousing the rate cut hopes anytime soon. The overall market breadth on BSE is in the favour of advances which have piped declines in the ratio of 1350:1217, while 112 shares remained unchanged

The BSE Sensex is currently trading at 18494.92 up by 23.55 points or 0.13% after trading in a range of 18545.58 and 18468.27. There were 14 stocks advancing against 16 declines on the index.

The broader indices continued to trade in fine contour; the BSE Mid cap index was up by 0.48% and Small cap index was up by 0.11%.

The top gaining sectoral indices on the BSE were, TECk up by 1.20%, IT up by 1.12%, HC up by 0.47%, PSU up by 0.43% and Metal up by 0.41%. While, Auto down by 0.80%, CD down by 0.32%, Bankex down by 0.28% and Power down 0.18% were the top losers on the index.

The top gainers on the Sensex were Bharti Airtel up by 3.26%, Infosys up by 2.52%, Jindal Steel up by 2.10%, ONGC up by 1.58%, and Dr Reddy’s up by 1.26%. On the flip side, HDFC was down by 1.26%, Cipla was down by 1.19%, Gail India was down by 1.06%, Bajaj auto down by 1.02% and ICICI Bank was down by 0.91% were the top losers on the Sensex.

Meanwhile, Finance Minister P Chidambaram has asked the Reserve Bank of India (RBI) to finalise guidelines for new bank licences and start accepting applications for the same in anticipation of the amendment in the Banking Regulation Act. The draft norms have pegged the minimum required capital for promoting bank at Rs 500 crore and limit foreign shareholding at 49% for the first 5 years.

As per the RBI's draft norms released in August 2011, private sector firms or groups owned and controlled by Indian promoters, with diversified ownership, sound credentials and integrity, and having successful track record of at least 10 years, would be eligible to promote banks.

The Minister further said the power or the authority which the RBI wants is already available in the other provisions of the law and with the central bank's own regulations and guidelines for new banking licenses.

Further, if RBI proceeds to receive application and process them, even then the first banking licence is not likely to be issued in the next six or eight months. Hence, with the time the licence is issued and the banks come to existence and the banks begin to function, the banks regulation act would have been amended, the Minister added.

Meanwhile, SEBI, in order to encourage growth of the corporate bond market, has also decided that the base of eligible securities may be expanded for mutual funds to participate in repo in corporate debt securities, from ‘AAA’ rated to ‘AA ‘and above rated corporate debt securities.

The S&P CNX Nifty is currently trading at 5,629.30, down by 1.70 points or 0.03% after trading in a range of 5,646.70 and 5,621.95. There were 18 stocks advancing against 32 declines on the index.

The top gainers of the Nifty were Bharti Airtel up by 3.46%, Infosys up by 2.34%, Jindal Steel up by 2.20%, Dr Reddy up by 1.58% and ONGC up by 1.46%. On the flip side, HDFC down by 1.73%, Cipla down by 1.47%, Ambuja Cement down by 1.23%, Hindalco down by 1.21%and Bajaj Auto down by 1.10%, were the major losers on the index.

Most of the Asian equity indices were trading in the red; Kospi Composite down by 0.53%, KLSE Composite declined 0.27%, Taiwan Weighted slid 0.19% and Shanghai Composite dropped 0.85%. While Nikkei 225 up by 2.20%, Straits Times up by 0.05% and Hang Seng up by 0.19% were the gainers. Jakarta Composite remained closed.