Benchmarks edge higher in late morning trade

Benchmarks edged higher in late morning trade on hopes that the US Federal Reserve will continue with its loose monetary policy. Encouraging second quarter earnings announced by some companies and further recovery in the rupee against the dollar also lifted the market. Investors’ sentiments got some support after RBI Governor Raghuram Rajan’s statement that the current account deficit (CAD) in the current fiscal will come down to $56 billion, less than 3 percent of GDP, and lower than the government estimate of $70 billion and $88 billion reported last year. Though, he said that the 2 percent industrial growth in September is disappointing, but hoped that the economic situation would improve in the second half of the fiscal on the back of good monsoon and exports.

On the global front, All the Asian markets are trading in green, rejoicing the testimony of Janet Yellen, the likely next chairwoman of the Federal Reserve, defending quantitative easing that signaled stimulus will be maintained until the US economy improves. Chinese market recovered from last session’s fall in a negative reaction to the unclear communique issued by China's Communist Party following the completion of the Third Plenum meeting. Back home, traders were buying, Bankex, Capital Goods and Auto. The rate sensitive sector edged higher after RBI Governor Raghuram Rajan said that any change in benchmark interest rate in its next month's monetary policy review will depend upon the price situation and other macro-economic factors.

The market breadth on BSE remains positive with advances to declines in the ratio of 1252: 489. BSE Sensex and NSE Nifty were comfortably trading near their psychological 20,500 and 6,050 levels respectively. The BSE Sensex is currently trading at 20537.74, up by 343.34 points or 1.70% after trading in a range of 20547.11 and 20348.27. There were 27 stocks advancing against 3 declines on the index. The broader indices were trading in green; the BSE Mid cap index was up by 1.45% and Small cap index gained 1.34%

The top gaining sectoral indices on the BSE were, Bankex up by 3.03%, Capital Goods up by 2.88%, Auto up by 2.82%, Realty up by 2.57% and Power up by 1.69%. While there was no loser on BSE

The top gainers on the Sensex were Tata Motors up by 5.19%, ICICI Bank up by 3.94%, L&T up by 3.73%, Bharti Airtel up by 3.55%, Tata Steel up by 3.23%. On the flip side, Coal India down by 2.61%, Cipla down by 1.16%, and TCS down by 0.36%, were the top losers on the Sensex.

Meanwhile, the much awaited merger and acquisition (M&A) guidelines for the telecom sector, after being deferred for a week, will be unveiled after the Empowered Group of Ministers (EGOM) deliberates upon the matter at its meeting scheduled on November 22. Telecom Minister, Kapil Sibal, underscored that EGOM besides deciding on the pricing issue will also take up spectrum related issues, to quantify how much spectrum should be retained by the new entity, among other things

Meanwhile, inter-ministerial panel Telecom Commission on November 6 approved the guidelines which will allow telecom companies to acquire operators in a manner that market share of the resultant entity does not exceed 50%.

Thus, with this M&A policy in place, country’s telecom sector, which has 13 mobile service providers, could witness some consolidation as this would provide loss making operators with huge debts and opportunity to exit the market.Vodafone India, which has around 17.8%, along with Bharti India already have expressed their interest to acquire another firm in India, once a clear M&A policy is in place.

The CNX Nifty is currently trading at 6,094.60 up by 105.00 points or 1.75% after trading in a range of 6,097.00 and 6,036.65. There were 45 stocks advancing against 5 declines on the index.

The top gainers of the Nifty were Axis Bank up by 5.32%, Tata Motors up by 5.02%, JP Associates up by 4.40%, BPCL up by 4.40%, and ICICI Bank up by 3.90%. On the flip side, Coal India down by 2.74%, HCL Technologies down by 1.11%, Cipla down by 0.68%, Cairn India down by 0.57%, and TCS down by 0.34% were the top losers on the index.

All the Asian equity indices were trading in green; Shanghai Composite up by 9.44 points or 0.45% at 2,097.38, Nikkei 225 up by 381.06 points or 2.62% at 14,948.22, Seoul Composite up by 14.77 points or 0.75% at 1,978.33, Taiwan Weighted up by 44.36 points or 0.55% at trade at 8,148.62, Hang Seng up by 196.61 points or 0.88% at 22,660.44, KLSE Composite up by 5.17 points or 0.29% at 1,787.66, Jakarta Composite was up by 68.98 points or 1.60% at 4,370.87, and Straits Times was up by 27.30 points or 0.86% at 3,194.04.