Markets make gap up start on supportive global cues

Key domestic bourses have made a gap up opening on Tuesday following positive cues from the US. Sentiments in global markets turned bullish on the back of better-than-expected US housing data and hopes that the US fiscal cliff problem would be contained. Existing-home sales rose 2.1% in October to a seasonally adjusted annual rate of 4.79 million from a downwardly revised rate of 4.69 million in September. Moreover, all the Asian equity indices were trading in the green at this point of time on positive cues from the US markets. The Japanese market has gained for the fifth consecutive day ahead of the Bank of Japan’s meeting on Nov 20.

Back home, sustained buying in mostly all the key heavyweights along with broader indices supported BSE’s -- Sensex -- to regain their crucial 18,400 mark while, NSE’s -- Nifty -- were trading near its psychological 5,600 mark. The sentiments also remained higher on statement from C Rangarajan, chairman of Prime Minister’s Economic Advisory Council that government will strive to rein in the fiscal deficit within the revised target of 5.3% of GDP for 2012. Rally in Metal stocks too aided the sentiments as stocks like Sterlite Industries, Hindalco, JSW Steel, Tata Steel and Sesa Goa edged higher after LMEX, a gauge of six metals traded on the London Metal Exchange jumped 2.25% on November 19, 2012.

All the sectoral indices were trading in the green. The top gainers in the opening trades were Realty and Consumer Durables indices up about a percent each. Auto, FMCG, Capital Goods and Metal indices up by over half a percent were the other sectoral gainers. The broader indices were trading in-line with benchmarks while, market breadth on the BSE was strong; there were 1,158 shares on the gaining side against 699 shares on the losing side while 95 shares remain unchanged.

The BSE Sensex opened at 18,422.69; about 83.69 points higher compared to its previous closing of 18,339.00, and has touched a high of 18,467.91 while low of 18,402.54.

The index is currently trading at 18422.87, up by 83.87 points or 0.46%. There were 24 stocks advancing against only 6 declines on the index.

The overall market breadth has made a strong start with 59.59% stocks advancing against 35.52% declines. The broader indices too were trading on a firm note; the BSE Mid cap and Small cap indices rose 0.47% and 0.57% respectively.

Buying was witnessed across the board, the prominent gaining sectoral indices on the BSE were, CD up by 0.91%, Realty up by 0.72%, Auto up by 0.63%, FMCG and CG were up by 0.60% each. While, there were no losers on the index.

The top gainers on the Sensex were HDFC up by 2.10%, Tata Motors up by 1.67%, Tata Power up by 1.19%, Gail India up by 0.99% and TCS up by 0.93%. While, Sun Pharma down by 0.79%, Infosys down by 0.51%, Cipla down by 0.24%, Bharti Airtel down by 0.18% and Coal India down by 0.17% were the top losers on the Sensex.

Meanwhile, Department of Telecommunications (DoT) has again sought legal opinion on the matter of refunding entry fee to telecom operators whose licenses were quashed by the Supreme Court, after an EGoM decided to adjust fees of only those companies who win spectrum in the auction. This dilemma arises in light of several telecom operators such as Etisalat DB, Sistema Shyam, ByCell, S Tel, and Loop Telecom sending notices to the government and seeking protection of their investment.

According to reports, DoT has asked for the Attorney General’s opinion on “whether entry fee, paid by licensees whose licenses have been ordered to be quashed by the Supreme Court needs to be refunded/released/adjusted to all the licencees, as requested by them, whether participating in auction or not.” The Supreme Court cancelled 122 telecom licences belonging to eight telecom operators in the 2G scam in February this year. However, Attorney General in August 2012 ruled out the need to refund licence fee paid by operators affected by SC judgment, stating none of its need arising at this stage.

Further, it remains important to be noted that, of eight companies whose licenses were cancelled, only three companies -Idea Cellular, Videocon and Telenor (majority stakeholder in Uninor), participated and won spectrum in the auction held last week. Meanwhile, the story was far worse with regard to another 60 blocks with Bharti and Vodafone being the only bidders as the other telecom companies - annoyed over an exorbitantly high reserve price of Rs 13,850 crore for all 22 circles set at the auction-- remained at the bay.

The S&P CNX Nifty opened at 5,604.80; about 33 points higher compared to its previous closing of 5,571.40, and has touched a high and a low of 5,613.70 and 5,592.40 respectively.

The index is currently trading at 5,597.60, higher by 26.20 points or 0.47%. There were 37 stocks advancing against 12 declines, while 1 stock remains unchanged on the index.

The top gainers of the Nifty were HDFC up by 2.16%, Tata Motors up by 1.80%, IDFC up by 1.46%, Gail India up by 1.04% and Sesa Goa up by 0.99%. On the flip side, Sun Pharmaceuticals down by 0.69%, BPCL down by 0.58%, Infosys and Cairn were down by 0.57% each and Punjab National Bank down by 0.44% remained top losers on the index.

All the Asian equity indices were trading in the green; Shanghai Composite was up by 1.29 points or 0.06% to 2,016.57, Hang Seng surged by 190.27 points or 0.89% to 21,452.33, Jakarta Composite gained 14.72 points or 0.35% to 4,330.79, KLSE Composite was up by 2.56 points or 0.16% to 1,626.01, Nikkei 225 gained 8.88 points or 0.10% to 9,162.08, Straits Times was up by 14.53 points or 0.51% to 2,965.37, Seoul Composite gained 10.80 points or 0.57% to 1 1,888.46 and Taiwan Weighted gained 27.63 points or 0.39% to 7,157.06.