Benchmarks continue to languish in red; broader indices too lose additional ground

Losing additional ground, local equity markets continued to languish into red territory due to bout of strong selling pressure mainly on account of negative global set-up. Succumbing to selling pressure, barring Information Technology (IT), the 12 sectoral indices have dipped their head into red. Depreciation of Indian currency on account of global risk off sentiment has mainly strengthened Information Technology stocks. Stocks from Realty, Oil & Gas and Auto counters are leading the pack of losers on BSE sectoral front. After gap down opening, 30 share barometer index, Sensex, despite trading lower with cut of century points, is oscillating above 19300 level. Similarly, widely followed index, Nifty, too loosing 3/4 percent is hovering above 5850 bastion. Broader indices, however, have slipped thick and fast into the red zone and are currently trading with loss of over half a percent.

On the global front, Asian pacific shares continued to trade depressed after a Republican proposal to avert a U.S. fiscal crunch failed to get enough support, deepening uncertainty over prospects for the negotiations to avert automatic spending cuts and tax increases set to start in January. Meanwhile, European stock index futures pointed to a drop on Friday, with shares set to trim recent lofty gains after a proposal from Republican leader John Boehner to avoid the 'fiscal cliff' failed to get support from his party.

Closer home, the BSE Sensex is currently trading at 19315.63 down by 138.29 points or 0.71% after trading in a range of 19394.55 and 19290.50. There were 4 stocks advancing against 26 declines on the index. Meanwhile, the market breadth on BSE is in the favour of declines which have thumped advances in the ratio of 1693:906, while 122 shares remained unchanged.

The broader indices were trading in red; the BSE Mid cap index was down by 0.87% and Small cap index was down by 0.69%.

The only gaining sectoral indices on the BSE was, IT up by 0.05%. While, Realty down by 2.21%, Oil & Gas down by 1.22%, CD down by 1.20%, Auto down by 0.17%, and Power down by 0.14% were top losers on the index.

The few gainers on the Sensex were Hindustan Unilever up by 0.74%, TCS up by 0.62%, Cipla up by 0.18% and Infosys up by 0.15%.

On the flip side, Bharti Airtel was down by 2.60%, Tata Motors was down by 1.75%, Hindalco was down by 1.66%, BHEL was down by 1.59%, and Jindal Steel was down by 1.55% were the top losers on the Sensex.

Meanwhile, the government is expected to have started preparing fresh plans to auction telecom spectrum that can fetch around Rs 39,895 crore. As per the projected plan, the government may get around Rs 25,316 crore from the auction of spectrum in premium 900 Mhz GSM band and Rs 14,579 crore from auction of unsold spectrum in 1800 Mhz band.  For the premium 900 Mhz band, government is learnt to have fixed minimum price of Rs 970.30 crore per block for Delhi, Rs 949.84 crore per block for Mumbai and Rs 227.44 crore per block for Kolkata circle.

Further, the Department of Telecommunications (DoT), they may sell more airwaves in Delhi, Mumbai, Karnataka and Rajasthan as compared to the quantum of spectrum it has earlier put for bids in recent auction which ended November 14, 2012. DoT is expected to put 15 Mhz of spectrum in 1800 Mhz band which is used for 2G GSM services amounting to 12 blocks in Delhi and Mumbai for auction at reserve price of Rs 485.15 crore and Rs 474.92 crore per block.

The government in previous auction had put only 10 Mhz for auction divided in 8 blocks of 1.25 Mhz each for Rs 693.06 crore in Delhi and Rs 678.45 crore in Mumbai which attracted no bidders due to the high bid price. Meanwhile in Rajasthan and Karnataka, it will auction same quantity of 11 blocks spectrum at reserve price of Rs 46.96 crore and Rs 231.08 crore, respectively.

Further, according to the draft plan, new players may be required to bid for minimum of 4 blocks in both 1800 Mhz and 900 Mhz band in Delhi and Mumbai. New entrants may have to bid for 4 blocks in Rajasthan and Karnataka where 1800 Mhz band will be put for auction. But for auction of 900 Mhz in Kolkata, new players may be required to bid for minimum of 1 block only. Moreover, existing players will be allowed to bid for airwaves but it will subject to new rule of spectrum capping.

The S&P CNX Nifty is currently trading at 5,870.80 down by 45.60 points or 0.77% after trading in a range of 5,888.00 and 5,860.70. There were 5 stocks advancing against 45 declines on the index.

The top gainers of the Nifty were Axis Bank up by 1.07%, TCS up by 0.34%, Cipla up by 0.27%, HUL up by 0.22% and Infosys up by 0.19%.

On the flip side, JP Associates down by 2.81%, IDFC down by 2.80%, Cairn down by 2.66%, Bharti Airtel down by 2.38% and Lupin down by 2.22%, were the major losers on the index.

All the Asian equity indices were trading in red; Shanghai Composite declined 0.64%, Hang Seng dropped 0.78%, Jakarta Composite slipped 0.14%, KLSE Composite contracted 0.36%, Nikkei 225 dipped 0.99%, KOSPI Composite crumbled 0.41%, Taiwan Weighted slumped 0.95% and Straits Times was down by 0.99%.