Benchmarks witness consolidation ahead of Infosys’ Q3 numbers

Reversing all their initial gains, key domestic benchmarks witnessed consolidation on Thursday with both the gauges snapping the session on a flat note with negative bias as investors booked profit ahead of the Infosys’ third quarter performance which is likely to set the tone of earnings season for the Oct-Dec quarter. Infosys, the bellwether stock of Information Technology index, will unveil its third quarter performance on Jan 11 amid fear that software maker may cut its revenue guidance for the fiscal year. The bourses traded in fine fettle during the first half buoyed by firm global cues. But, investors turned nervous on Prime Minister Manmohan Singh’s comment that the high international price of oil was putting a big strain on the economy and effort should be made for reducing the transport sector’s dependence on oil.

Supportive cues from US markets provided the much needed support to local markets in first half. Investors’ morale got buttressed after most of the Asian markets shut shop in the green on the back of better-than-expected Chinese trade data. The nation’s exports rose 14.1 percent in December from a year earlier compared to a markets expectation of closer to 4 percent while imports gained 6 percent indicating stronger domestic demand.

However, disappointing cues from European market took their toll on domestic sentiments in second half and dragged the frontline gauges below the psychological 6,000 (Nifty) and 19,700 (Sensex) levels. Investors mainly resorted to profit booking following the decline in European markets. European markets traded mixed in early deals ahead of the European Central Bank meeting later in the day where the central bank is expected to keep interest rates steady.

Back home, cautiousness in the markets crept in after HSBC slashed India’s growth forecast for this fiscal year and next fiscal to 5.2% and 6.2% from 5.7% and 6.9% respective projections earlier. In its report, HSBC also underscored more time for reforms process and another three years for Indian economy to return to 8% growth on a sustained basis. Selling got intensified in late trade as sentiments got impacted after shares of select Power companies, namely Indiabulls Power and Bharat Heavy Electricals, dropped after Barclays Capital and Citigroup warned two thermal power projects, of the two companies were involved with, could have been held up for financial irregularities.

However, the benchmark indices pared almost all of their losses in late trade after government’s announcement that public sector banks, reeling under asset quality issues, be re-capitalized. After a crucial meet of Cabinet Committee on Economic Affair, finance minister P Chidambaram reported that about 9-10 banks will be infused with Rs 12,200 crore. State Bank of India (SBI) scooped up gains of close to half a percent, while, Punjab National Bank (PNB) too ended in green zone. Sentiments also got some support after ONGC and Oil India edged higher in anticipation of lower subsidy burden triggered by reports the government is mulling fuel price hike.

The NSE’s 50-share broadly followed index Nifty declined by just two points to end below the psychological 6,000 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex declined by about three points to finish well below the psychological 19,700 mark. However, broader markets butchered badly and snapped the session with a cut of about half a percent.

The overall volumes stood above Rs 1.60 lakh crore, which remained on the lower side as compared to that on Thursday. The market breadth remained in favor of declines as there were 1,183 shares on the gaining side against 1,797 shares on the losing side while 124 shares remain unchanged.

Finally, the BSE Sensex lost 3.04 points or 0.02% to settle at 19,663.55, while the S&P CNX Nifty declined by 2.85 points or 0.05% to end at 5,968.65.

The BSE Sensex touched a high and a low of 19,783.75 and 19,596.38, respectively. The BSE Mid-cap index was down by 0.49% and Small-cap index ended lower by 0.54%.

The top gainers on the Sensex were, ONGC up by 3.41%, Tata Motors up by 2.07%, HDFC Bank up by 1.24%, SBI up by 0.70% and Coal India up by 0.49%, while, BHEL down by 2.19%, Hindalco down by 1.52%, TCS down by 1.35%, Sterlite Industries down 1.28% and Sun Pharma down by 0.99% were the top losers on the index.

The top gainers on the BSE Sectoral space were Bankex up by 0.62%, Oil & Gas up by 0.47%, PSU up by 0.32%, Auto up by 0.31% and Realty up by 0.04%, while Power down 0.93%, Health Care (HC) down 0.70%, Metal down 0.63%, Capital Goods (CG) down 0.62% and TECk down 0.37% were top losers on the sectoral space.

Meanwhile, the government is expected to get over Rs 23,000 crore from levy of one-time spectrum fee on existing operators for holding radiowaves beyond a prescribed limit. The government in this regard has issued notices to telecom companies including Bharti Airtel, Vodafone and BSNL, MTNL, Aircel and Reliance Communications for the excess spectrum they hold beyond the prescribed limit. 

To be more precise, the government is expected to get Rs 4,251.83 crore from retrospective charges, Rs 18,925.82 crore from prospective charges. In all Rs 23,977.65 crore is expected from levy of one-time spectrum fee.

State-owned BSNL will have to pay around Rs 6,912 crore, Bharti Airtel - Rs 5,201 crore, Vodafone - Rs 3,599 crore, MTNL - Rs 3,205 crore, Idea Cellular - Rs 2,113 crore (includes Rs 231.5 crore of Spice), Aircel - Rs 1,365 crore (includes Rs 14 crore of Dishnet), Loop Mobile - Rs 606 crore and Reliance Communications - Rs 173 crore.

Earlier, for pan-India operations, telecom firms were given 4.4 MHz spectrum with license for Rs 1,658 crore and later were permitted to get another 1.8 MHz on fulfillment of certain subscriber-base criteria. However, in November, the government decided that the telecom operators will have to pay charges for holding spectrum above 6.2 MHz retrospectively, for the period of July 2008 to January 1, 2013. For spectrum above 4.4 MHz, they would have to pay for the remaining period of their licences starting January 1, 2013.

The S&P CNX Nifty touched a high and a low of 6,005.15 and 5,947.30 respectively.

The top gainers on the Nifty were ONGC up by 3.70%, Tata Motors up by 1.97%, Bank of Baroda up by 1.47%, Axis Bank up by 1.44% and HDFC Bank up by 0.97%.

The top losers of the index were Ultra Tech Cement down by 3.18%, Ambuja Cement down by 2.84%, BHEL down by 2.28%, Hindalco down by 2.01% and Sesa Goa down by 1.85%.

The European markets were trading mixed, France’s CAC 40 down by 0.11%, Germany’s DAX up by 0.27% and the United Kingdom’s FTSE 100 up by 0.15%.

Asian markets ended mostly higher on Thursday on the back of stronger-than-expected Chinese trade data, which raised the hopes for recovery in the world’s second-largest economy. Chinese shares closed higher as its exports grew 14.1% in December from a year ago, while imports grew 6% on the year, double the forecast, boosting the country’s trade surplus to $31.6 billion, from a surplus of $19.6 billion in November and sharply above a forecast of $19.7 billion. Moreover, Hang Seng and South Korea's Kospi Composite also turned positive after the trade data. Japan's Nikkei extended early sessions’ gains and went home with green mark as the yen resumed its weakening trend.