Benchmarks trade lower in morning deals; rate sensitives weigh

Indian equity indices, after making a positive start, have pared their initial gains and turned into red with investors booking profit at higher levels. The downfall were mainly supported by selling in rate sensitives like realty, auto and banking counters ahead of Reserve Bank of India’s (RBI) third quarter review monetary policy meeting on January 29, 2013. The beleaguered aviation sector too remained under pressure and stocks of Kingfisher Airlines, Jet Air India and Spicejet edged lower as the Supreme Court has  restrained the Federation of Indian Airlines from levying a transaction fee, in any form or in any name, while booking tickets and has directed the Directorate-General of Civil Aviation to examine the tariff structure of the airlines in view of the wide range of their base prices.

However, supportive cues from US markets provided the much needed support to local markets initially. Investors’ morale got buttressed on the back of stronger-than-expected profits from IBM and Google which eased investor concerns about the technology sector. But, weakness in Asian counters took their toll on domestic sentiments dragging the Indian bourses below the psychological 6,050 (Nifty) and 20,000 (Sensex) levels. However, losses in the regional markets remain capped as Japanese Nikkei edged higher by over a percent despite yen paring gains after country’s exports fell more than forecast and the annual trade deficit swelled to a record. Moreover, China reported that its manufacturing expanded at the fastest rate in two years.

Back home, software witnessed the maximum gain in trade followed by technology and fast moving consumer goods while, auto, realty and metal remained the top losers on the BSE sectoral space. The broader indices too were struggling to get some traction while, the market breadth on the BSE was negative; there were 563 shares on the gaining side against 1,252 shares on the losing side while 92 shares remain unchanged.

The BSE Sensex opened at 20,017.20; about 9 points lower as compared to its previous closing of 20,026.61, and has touched a high and a low of 20,072.28 and 19,963.98 respectively.

The index is currently trading at 19,986.28, up by 40.33 points or 0.20%. There were 10 stocks advancing against 20 declines on the index.

The overall market breadth has made a positive start with 29.52% stocks advancing against 65.65% declines. The BSE Mid cap and Small cap indices declines 1.26% and 0.79% respectively.

The top gaining sectoral indices on the BSE were IT up by 1.04%, TECk up by 0.56%, FMCG up by 0.47% and Oil & Gas up by 0.15%. While, Auto down by 3.03%, Realty down by 2.36%, Metal down by 0.90% , Power down by 0.77%  and Capital Goods down by 0.59% were the only losers on the index.

The top gainers on the Sensex were ONGC up by 3.27%, TCS up by 1.67%, Infosys up by 1.08%, Wipro up by 1.02% and Hindustan Unilever up by 0.90%.

On the flip side, Tata Motors was down by 6.99%, Gail India was down by 2.76%, Mahindra & Mahindra was down by 2.40%, Sterlite Industries was down by 2.04% and Hindalco was down by 1.78% were the top losers on the Sensex.

Meanwhile, the government has issued guidelines for the second round of spectrum auction which is expected to fetch around Rs 45,000 crore to exchequer from airwaves sale. However, the guidelines did not mention the timeline for starting auction and related dates.

In the second round of auction, the government will put unsold GSM spectrum in 1800 MHz band, CDMA spectrum in 800 MHz and airwaves held by telecom licences in 900 MHz band that is coming for renewal starting 2014 onwards. As per the auction guidelines, spectrum auction for 1800 MHz and 900 MHz band, currently being used for GSM services, will be conducted simultaneously and auction of 800 MHz band, being used for CDMA services, in 21 out of 22 service area will be conducted separately.

Meanwhile, the government approved a 50 per cent reduction in the reserve price of CDMA spectrum for the auction to be scheduled in March. In the previous auction, reserve price for CDMA spectrum was 11 times higher than the amount telecom operators paid in 2008. The government also slashed the base price of unsold GSM spectrum by 30 per cent, while the price of spectrum in 900 MHz has been fixed at two times the price of airwaves in 1800 MHz.

The S&P CNX Nifty opened at 6,046.20; about 8 points lower as compared to its previous closing of 6,054.30 and has touched a high and a low of 6,065.30 and 6,033.85 respectively.

The index is currently trading at 6,038.00, down by 16.30 points or 0.27%. There were 12 stocks advancing against 38 declines on the index.

The top gainers of the Nifty were ONGC up by 3.33%, TCS up by 1.67%, Infosys up by 1.06%, Hindustan Unilever up by 0.88% and ITC up by 0.79%.

On the flip side, Tata Motors down by 7.35%, GAIL down by 3.01%, JP Associate down by 2.34%, Mahindra & Mahindra down by 2.32% and Sesa Goa down by 2.14%, were the major losers on the index.

Most of the Asian equity indices were trading in the red; Shanghai Composite slipped 1.73 points or 0.07% to 2,319.18, Hang Seng dipped 35.77 points or 0.15% to 23,599.33, KOSPI Composite declined 5.89 points or 0.30% to 1,974.52 and Taiwan Weighted was down by 32.29 points or 0.42% to 7,711.89.

On the flip side, Nikkei 225 surged 115.22 points or 1.10% to 10,602.21 and Straits Times was up by 11.44 points or 0.35% to 3,242.67.

Stock markets in Indonesia and Malaysia remained close for the trade today.