Benchmark’s slip to intra-day’s low; broader indices too trim gains

Benchmark equity indices losing strength are currently languishing near intra-day’s low level in absence of any major positive catalyst in domestic equity markets. Although Asian counterparts continue to trade from strength to strength, but drubbing of heavy blue chip stocks, viz., ITC, Infosys and L&T are mainly keeping the sentiment negative for Indian equity markets.  30 share index, Sensex, is currently trading with loss of over quarter points at 19300 crucial level, while 50 share index, Nifty, too is gyrating around pre-closing levels, which is below 5900 psychological mark. However, broader indices although have pared some gains, but continue to trade in green territory. Asian shares extended gains for a seventh day on Thursday, after the US Federal Reserve took new stimulus steps to bolster the economy, pressuring the yen with expectations the Japanese central bank will follow suit with more easing next week. The Fed said it will buy $45 billion in Treasuries each month on top of the $40 billion per month of mortgage-backed bonds it started buying in September. Meanwhile, European stock future indices pointed to a flat to lower open on Thursday, as investors balanced a new monetary boost from the U.S. Federal Reserve with lingering concerns that austerity measures could derail the world's largest economy.

Closer home, stocks from Fast Moving Consumer Goods, Consumer Durables and Capital Goods counters, are mainly endorsing the underlying weakness of the bourses, while stocks from interest sensitive, Auto, Bankex and Realty counters are keeping the bears under check. Banking shares continued to be on buyer’s radar on hopes of approval of banking amendment Bill. The prospect of the banking amendment Bill gaining legislative approval brightened after key leaders of the principal opposition Bharatiya Janata Party (BJP) signaled their support. Once passed, the law will pave the way for the Reserve Bank of India (RBI) to issue new bank licences and give shareholders greater say in both private and state-owned banks. The overall market breadth on BSE is in the favour of advances which thumped declines in the ratio of 1359:1234 shares remained unchanged.

The BSE Sensex is currently trading at 19325.80, down by 29.46 points or 0.15% after trading in a range of 19421.72 and 19322.35. There were 16 stocks advancing against 13 declines on the index, while 1 stock remained unchanged.

The broader indices too trimmed gains; the BSE Mid cap and Small cap indices were trading up by 0.40% and 0.29% respectively.

The top gaining sectoral indices on the BSE were, Auto up by 1.65%, Bankex up by 0.74%, Realty up by 0.73%, Health Care up by 0.35% and PSU up by 0.29%. On the other hand, FMCG down by 2.46%, Consumer Durables down by 0.84% and Capital Goods down by 0.35% were the top losers on the Sensex.

The top gainers on the Sensex were Tata Motors up by 4.56%, Bajaj Auto up by 1.74%, ICICI Bank up by 1.54%, Jindal Steel up by 1.25% and SBI up by 0.88%.

On the flip side, ITC down by 4.28%, HUL down by 1.24%, L&T down by 0.82%, NTPC down by 0.78% and Hindalco Industries down by 0.63% were the top loser on the Sensex.

Meanwhile, given the quiet response to the recently completed 2G spectrum auctions, the government is expected to discuss on December 13, recommendations made by the Empowered Group of Ministers (EGoM) on pricing of spectrum that was unsold in the recently conducted auction on November 14, 2012.

The EGoM on telecom headed by Finance Minister P Chidambaram is expected to have recommended a 30 percent reduction in reserve price for airwaves in the 1,800 Mhz band in four circles, namely Delhi, Mumbai, Karnataka and Rajasthan, that remained unsold in last auction, a move that could fetch Rs 6,200 crore to exchequer. However, at the old rates, the government would have earned a minimum of Rs 8,843.55 crore if the 5 Mhz each in these four circles were sold out.

Further, EGoM in its meet on December 7 also suggested auctioning spectrum in 900 MHz band in Delhi, Mumbai and Kolkata simultaneously with the sale of radio waves in 1800 Mhz in these four circles. Moreover, the EGoM also reportedly has decided to recommend to Cabinet that reserve price for premium 900 Mhz band, being used currently by Bharti Airtel, Idea Cellular and Vodafone in Delhi and Mumbai service area, be twice the reserve price for 1800 Mhz band.

The last 2G mobile phone spectrum auction emerged as damp squib with government managing to garner bids worth just Rs 9,407 crore as against a minimum target of Rs 28,000 crore, as there were no takers in the November auction for 1800 megahertz (MHz) radio waves on offer in the key telecom zones, or circles, of Delhi and Mumbai - the nation’s biggest telecom markets and Karnataka and Rajasthan. The government had put on auction a substantial part of the spectrum that was freed from Supreme Court in February this year cancelling 122 mobile permits issued by the then Telecom minister A Raja to nine telecom players in 2008.

The failure of spectrum auction could be highly attributed to the high reserve price fixed by government. The government had fixed around 8 times high reserve price for GSM spectrum and 11 times high price for CDMA spectrum compared to the amount on which companies were allocated pan-India permits till 2008.

The S&P CNX Nifty is currently trading at 5,884.75, down by 3.25 points or 0.06% after trading in a range of 5,907.45 and 5,882.80. There were 29 stocks advancing against 21 declines on the index.

The top gainers of the Nifty were Tata Motors up by 4.30%, Siemens up by 1.81%, Bajaj Auto up by 1.72%, PNB up by 1.72%, ICICI Bank up by 1.50%.

On the flip side, ITC down by 3.91%, Hindustan Unilever down by 1.42%, Hindalco Industries down by 0.93%, Kotak Bank down by 0.84%, Sun Pharma down by 0.80% were the top losers on the index.

Asian markets were trading mixed; KLSE Composite gained 0.03%, Nikkei 225 surged by 1.68%, Straits Times added 0.42%, Seoul Composite spurts 1.38% and Taiwan Weighted advanced 0.87%.

On the other hand, Shanghai Composite declined 0.90%, Jakarta Composite slid 0.75% and Hang Seng lost 0.20%.