Post session - Quick review

Indian equities after getting a strong start ended equally well as trader’s appeared to be in shopping mood on Dhanteras, which in turn resulted into sparkling gains at Dalal Street. Domestic barometer gauges tracing positive cues from jaunty global equities, stood tall in trade on European leaders’ assurances of an upcoming rescue deal for the region’s lingering debt problem. The sentiment also got underpinned after China’s data countered fears that the world’s second-biggest economy faced a “hard landing”. In addition, risk appetite revisited Dalal Street as worries about the global economy somewhat receded following better than expected US data which started a few weeks ago  with a stronger-than-forecast jobs numbers and continued with last Thursday’s release of an improving Philly Fed factory activity survey. However, trader’s also added riskier assets to their portfolio ahead of the important day tomorrow that  could witness volatility play at its fore owing to the two big events lined up i.e. F&O expiry and RBI’s quarterly policy review. The Reserve Bank of India will reviewing its monetary policy on Tuesday and is widely expected to deliver one final interest rate increase and then pause until the end of the fiscal year in March.

On the global front, the S&P 500 posted its third straight week of gains on Friday, lifted by optimism before this weekend's summit of European leaders and strong earnings from blue-chip stocks. US stocks rose in a broad rally to their highest levels since early August after a volatile week. Meanwhile, Asian shares too settled in green for second straight day underpinned by positive export figures from Japan that pointed a recovery from a devastating tsunami earlier this year, which besides fuelling a rally in Japan's Nikkei 225 index also buoyed the sentiment across the region. Japan's Finance Ministry said early on Monday that exports rose 2.4% in September compared with a year earlier, marking the second consecutive month of growth. The rise followed a five-month decline in the wake of the March 11 earthquake and tsunami that devastated northeast Japan.

The European shares rose on Monday, on optimism that policymakers were closer to an agreement on measures to tackle the euro zone sovereign debt crisis, and with miners lifted by strong manufacturing data in China. European Union leaders made some progress towards a strategy to fight the debt crisis on Sunday, though final decisions were deferred until a second summit on Wednesday. Meanwhile, China's vast manufacturing sector expanded moderately in October to snap three months of contraction, reflecting the resilience of robust domestic demand that is likely to soothe fears of an abrupt slowdown in the world's second-largest economy.

Back home, traders added position on the first trading day of Diwali week driven by bullish sentiments across the global markets and also as they expected a less hawkish tone from RBI in its upcoming mid-quarterly monetary policy review.  However, stocks from Capital Goods and Bankex remained the tribulations. Banking shares were abandoned as the investor’s anticipating the immense volatility that could face in the next trading session. However, most of the earning reported by biggies came as a pleasant surprise as stocks of Cigarette major ITC surged over 1.5% after the company reported 21.46% growth in its Q2 FY12 net profit at Rs 1514.31 crore as compared to Rs 1246.74 crore for the corresponding quarter of the previous year. Meanwhile, Suzlon Energy also staged a good show as the stock rose over 1% after the company pruned its net loss for the second quarter of the current fiscal at Rs 19.39 crore whereas the same was Rs 89.05 crore for the quarter ended September 30, 2010.  Additionally, Grasim Industries shot up 3% on reporting 23.32% growth in its Q2 FY12 net profit at Rs 344.84 crore as compared to Rs 279.62 crore for the quarter ended September 30, 2010. However, stocks of Union Bank of India came as the big disappointment and the stock tumbled over 11% after the state run lender reported a forecast-lagging net profit growth at Rs 352.52 crore as compared to Rs 303.39 crore for the quarter ended September 30, 2010. The bank’s Gross NPA shot up at 3.49% for the quarter under review whereas the same was at Rs 2.79% for the September quarter of the previous Fiscal.

30 share barometer gauge BSE-Sensex- lost some ground in the dying hours of the trade, which led to index settle below its 17k level. Meanwhile, broadly followed 50 share index NSE-Nifty-gaining close to 50 points settled off 5100 level. However, the broader indices gave up to selling pressure as they settled with a cut of over 0.25%. The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 1270:1525 while 123 scrips remained unchanged.

The BSE Sensex gained 150.55 points or 0.90% and settled at 16,936.19. The index touched a high and a low of 17,104.88 and 16,898.60 respectively. 22 stocks advanced against 8 declining ones on the index (Provisional)

The BSE Mid-cap index lost 0.35% while Small-cap index was down 0.32%. (Provisional)

On the BSE Sectoral front, IT up 1.92%, Auto up 1.83%, TECk up 1.65%, Oil & Gas up 1.60% and FMCG up 1.46% were the top gainers while Capital Goods down 1.86%, Bankex down 0.37% and PSU down 0.01% were the only losers.

The top gainers on the Sensex were Tata Motors up 4.58%, ONGC up 4.14%, HUL up 3.28%, Bajaj Auto up 3.11% and TCS up 2.84%.

On the flip side, L&T down 3.24%, SBI down 1.95%, Coal India down 1.64%, Sun Pharma down 1.41% and Jindal Steel down 0.70% were the top losers on the index. (Provisional)

Meanwhile, the Department of Telecom (DoT) expects to start the distribution of second generation spectrum to the operators shortly after its decision on pricing of radio waves and priority list. The DoT is expected to finalize it in next 2-3 months.

The Telecom Secretary R Chandrashekhar said 'we will like certainly do it (spectrum allocation) as quickly as possible but there are two things that are required for all spectrums to be allocated to any of the company.' 'One is the pricing for which already there is a process and we hope over next two to three months that will come to close. Second is sequence and the priority in which it has to be given,' he added.

The Telecom Regulatory Authority of India (TRAI) has made certain recommendations and the DoT has written to TRAI seeking extra inputs and explanation on some of the points that were recommended by the TRAI. 'Once we receive response from the (TRAI) we will have closure on that. I expect that once these two issues are decided then the part is cleared,' telecom secretary said.

The department on October 10, wrote TRAI asking clarification on many points on its suggestions made for spectrum management and licensing framework. The clarifications include TRAI rationale behind fixing prescribed limit of 6.2 Mhz for GSM and 5 Mhz for CDMA for which current price of spectrum must not be charged from the existing telecom companies during their license period.

TRAI has said that current price is charged for excess spectrum allocated to telecom operators beyond prescribed limit. However, DoT is also not clear on 'applicable date'- the date after which telecom players need to pay for additional spectrum allocated to them beyond prescribed limit.

On February 8, 2011, TRAI suggested April 1, 2010 as applicable for charging the current price for spectrum allocation to GSM players in 1800 Mhz band and CDMA players in 800 Mhz and 900 Mhz (GSM) frequency band. Afterwards on May 3, TRAI said that the current price may be charged from the date of allocation in 2008-09 but subject to the outcome of various court cases.

The DoT expects TRAI to send its reply by October 25, after that the final view of DOT will be referred to Telecom Commission, the apex decision making body of the DoT. 'After approval of Telecom Commission and a decision on it, we will start allocating spectrum. Pricing and priority both would be decided in two to three months time,' Chandrashekar added.