Barometer gauges escalate to intra-day’s high on rate cut hopes

Gaining momentum, benchmark equity indices have escalated to intra-day’s high level thanks to sustained buying in rate sensitive’s realty, auto and bankex counters, mainly on account of rate cut hopes, which would be first in nine months. Despite mixed global cues, markets appear on the way of registering third positive close out of five, with Sensex and Nifty, currently trading above the mental 20,000 and 6000 respective bastion. Broader indices too, witnessing some traction, have added ground.

On the global front, Asian pacific shares are staging mixed trend, hurt by a drop in regional technology stocks and on caution ahead of the corporate earnings season, nevertheless gains in Japan and Australia limited overall losses for equities. Upbeat manufacturing reports from the United States, Germany and China underpinned sentiment for other assets.

Closer home, up move of telecom stocks, too are fuelling the uptrend of barometer gauges, with major beneficiaries being shares of Bharti Airtel and Reliance Communication stocks. Giving relief to leading mobile players, the Bombay High Court has issued a stay order on the government’s decision to collect a one-time fee for excess spectrum. However, stocks from Metal and Oil & Gas counters are the only weak link of the trade. The overall market breadth on BSE is in the favour of declines which have thumped advances in the ratio of 1269:1180, while 125 shares remained unchanged.

The BSE Sensex is currently trading at 20005.72, up by 81.94 points or 0.41% after trading in a range of 20018.98 and 19928.11. There were 20 stocks advancing against 10 declines on the index.

The broader indices too added some ground; the BSE Mid cap and Small cap indices were trading higher by 0.94% and 0.36% respectively.

The top gaining sectoral indices on the BSE were Realty up by 1.52%, Consumer Durables up by 1.27%, Auto up by 1.02%, Health Care up by 0.92% and FMCG up by 0.79%. While, Metal down by 0.06% and Oil & Gas down by 0.01% were the losers on the index.

The top gainers on the Sensex were Tata Motors up by 2.18%, M&M up by 1.88%, Cipla up by 1.65%, Dr Reddys Lab up by 1.29% and Maruti Suzuki up by 1.27%.

On the flip side, Tata Power was down by 0.98%, Hero Moto Corp down by 0.74%, RIL down by 0.54%, Jindal Steel down by 0.48% and Tata Steel down by 0.32% were the top losers on the Sensex.

Meanwhile, giving relief to leading mobile players, the Bombay High Court has issued a stay order on the government’s decision to collect a one-time fee for excess spectrum. Based on a petition filed by Idea Cellular challenging the Department of Telecom (DoT) order to pay the one-time fee, the High court has issued the stay order on the DoT, restricting it to take any coercive action until March 1.

With this, Idea Cellular got immediate relief; other operators are expected to follow the same by filing a petition and seeking a stay on the DoT order. Further, mobile operators also said that the government’s decision to collect the one time spectrum fee was illegal as the spectrum with the operators has been allocated by the government under policies prevalent at that time.

 Earlier, the government had decided that all GSM operators with more than 4.4 Mhz spectrum will have to pay a one-time fee for the remaining period of their 20-year licence and operators using CDMA technology will have to pay for all spectrum over 2.5 Mhz. However, this was done after the Government was criticized for giving away additional spectrum on subscriber-linked criteria without paying any additional charge.

As per the government, the surcharges for long-established telecom players are aimed at creating a balanced level between old and new operators. 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. But now the mobile operators have two months before the court takes a final decision

The S&P CNX Nifty is currently trading at 6,039.75, up by 20.40 points or 0.34% after trading in a range of 6,041.75 and 6,014.45. There were 28 stocks advancing against 21 declines on the index and one remained unchanged.

The top gainers of the Nifty were Bank of Baroda up by 3.86%, JP Associate up by 3.80%, Tata Motors up by 2.18%, PNB up by 2.08% and M&M up by 1.77%.

On the flip side, ACC down by 2.58%, UltraTech Cement down by 2.00%, Tata Power down by 1.44%, Ambuja Cement down by 1.19% and Cairn India down by 0.92% and were the major losers on the index.

Asian equity indices were trading mixed; Shanghai Composite declined 0.38%, Hang Seng dipped 0.39%, KOSPI Composite tumbled 0.91% and Taiwan Weighted dropped 0.30%.

On the flip side, Jakarta Composite rose 0.22%, KLSE Composite added 0.09%, Nikkei 225 surged 2.88% and Straits Times was up by 0.36%.