Sensex, Nifty continue lackluster trade; Metals, Capital Goods drags

Indian benchmarks- Sensex, Nifty, continued to trade in the red in the late morning session amid a weak trend in global markets. On the global front, most of the Asian equity indices were trading in the red at this point of time with Japanese market losing the most as yen strengthened for the second straight day putting pressure on the exporters. Back home, the traders were seen piling up position in HealthCare, Auto and FMCG while selling was seen in Metal, Capital Goods and Consumer Durables. In scrip specific development, Marico soared as the company's board has approved plans to demerge its Kaya Skin Care Solutions business and list it separately as Marico Kaya Enterprises. Kingfisher Airlines was trading under pressure after reporting that the lenders have decided to take legal action against the airline company for its failure to repay over Rs 7,000-crore debt despite repeated reminders. GMR Infrastructure was trading in red after the company stated that its unit has terminated a contract with National Highways Authority of India for six-laning of the ambitious Kishangarh-Udaipur-Ahmedabad highway. United Spirits edged lower on reporting that the UK-based Diageo plc's proposed open offer to buy up to 26% additional stake in United Spirits from January 07, 2013 has been postponed. The NSE Nifty and BSE Sensex were managing to hold their psychological 5950 and 19600 levels respectively. The market breadth on BSE was positive, in the ratio of 1128:989.

The BSE Sensex is currently trading at 19657.21 down by 34.21 points or 0.17% after trading in a range of 19710.74 and 19652.82. There were 12 stocks advancing against 18 declines on the index.

The broader indices were trading in mixed; the BSE Mid cap index was down by 0.10% and Small cap index was up by 0.01%.

The top gaining sectoral indices on the BSE were, HealthCare up by 0.78%, Auto up by 0.31% and FMCG up by 0.01% while, Metal down by 1.28%, Capital Goods down by 1.12%, Consumer Durables down by 0.66%, PSU down by 0.44%, and Oil & Gas down by 0.41% were the top losers on the index.

The top gainers on the Sensex were Sun Pharma up by 1.58%, Dr Reddys Lab up by 1.30%, TCS up by 0.73%, Bajaj Auto up by 0.73% and Mahindra & Mahindra up by 0.47%.

On the flip side, Sterlite Industries was down by 1.83% , L&T was down by 1.74%, Hindalco Industries was down by 1.71% , Tata Steel was down by 1.71% and Infosys was down by 1.26% were the top losers on the Sensex.

Meanwhile, the Empowered Group of Ministers (EGoM) on telecom headed Finance Minister P Chidambaram decided to slash the reserve price for the 800MHz radiowaves used by CDMA mobile operators by either 30 percent or 50 percent in the second round of auction planned to begin on March 11 to raise a minimum of Rs 45,000 crore. Auction for 800-MHz spectrum will be conducted after the GSM auctions of 1800-MHz and 900-MHz bands from March 11.

The EGoM on January 7 finalized the schedule for auction of unsold GSM spectrum for the first round along with 900 MHz spectrum and 800 MHz band airwaves used for offering CDMA-based mobile services. Due to high reserve price about 70 percent of the airwaves went unsold in November auction that raised only Rs 9,410 crore, which was less than 25 percent of the amount the government was targeting to raise from spectrum sale for this fiscal. While, EGoM recommended in last month a 30 percent cut in reserve or base price for the second-generation spectrum that wasn't sold in the auction.

If the government reduce the CDMA spectrum price by 30 percent, then the auction of 800 MHz together with 900 MHz and 1800 MHz airwaves would get up to Rs 48,000 crore and if reserve price reduction is 50 percent, it will get about Rs 45,000 crore at the base price.

Moreover, the auction will start with the unsold spectrum in 1800 MHz band at a reserve price which is 30 percent lower than the previous round of auction held in November, 2012. As per the Telecom Minister Kapil Sibal the auction for the 1,800 MHz second-generation phone spectrum will start on March 11 in four cities including New Delhi and Mumbai that remained unsold in the November 2012 auction. Minister added that the Cabinet may decide this month on the minimum price for the 800 MHz sale.

In previous auction, reserve price for CDMA spectrum was 11 times high than the amount telecom operators paid in 2008 and 1.3 times than the GSM spectrum in 1800 MHz band and at that rate, each block of 800 MHz band would have cost Rs 4,550 crore, and Rs 18,200 for 5 MHz, pan-India and thus did not receive any bids. Since CDMA technology has few takers, EGoM felt that it may attract no bidders; hence it will recommend option of 50 percent price cut as well.      

The S&P CNX Nifty is currently trading at 5,970.55 down by 17.85 points or 0.30% after trading in a range of 5,990.65 and 5,970.20. There were 19 stocks advancing against 31 declines on the index.

The top gainers of the Nifty were Sun Pharma up by 1.63%, Dr Reddy’s Lab up by 1.35%, ACC up by 0.93%, Bajaj-Auto up by 0.71% and HCL Tech up by 0.66%.

On the flip side, IDFC down by 1.98%, Tata Steel down by 1.86%, L&T down by 1.68%, Hindalco down by 1.64%, and Sesa Goa down by 1.58%, were the major losers on the index.

Most of the Asian equity indices were trading in the red; Shanghai Composite dipped 1.57 points or 0.07% to 2,283.80, Hang Seng declined 134.47 points or 0.58% to 23,195.28, KLSE Composite dropped 5.57 points or 0.33% to 1,688.59, Nikkei 225 tumbled 117.13 points or 1.11% to 10,481.36, Straits Times slipped 4.27 points or 0.13% to 3,213.87, KOSPI Composite decreased 9.99 points or 0.50% to 2,001.26 and Taiwan Weighted was down by 52.54 points or 0.68% to 7,702.55.

On the flip side, Jakarta Composite was up by 14.83 points or 0.34% to 4,407.20.