Benchmarks trade flat with a negative bias

The Indian equity markets have made a dismal start and have hit their lowest levels in 2-1/2 weeks in early trade on growth concerns spurred by a 5.1 percent contraction in industrial output in October, extending their losing streak for the fourth straight day amid a weakening overseas trend. However, the markets managed to recover most of their early losses soon, as investors went for the beaten down fundamentally strong stocks. The fall in the global markets has been induced with the reports that European Union may face downgrade from rating agencies. S&P chief economist said time has been running out for EU members to resolve its debt problems. Moreover, the Indian rupee crossed the 53 to the dollar today - fresh all-time low too dampened the sentiments. It was trading at 53.17 to the dollar, down 33 paise. It fell 82 paise to 70.19 an euro. Selling was widespread, with capital goods, metal, bank and oil and gas stocks leading the fall, dragging the market down. The broader indices were bleeding badly with small cap and mid cap indices were down by 0.31 and 0.56 percent respectively. The market breadth on the BSE was negative; there were 488 shares on the gaining side against 884 shares on the losing side while 89 shares remained unchanged.

The BSE Sensex opened at 15,778.62; about 92 points lower compared to its previous closing of 15,870.35, and has touched a high and a low of 15,892.92 and 15,771.59 respectively.

The index is currently trading at 15,873.40, up by 3.05 points or 0.02%. There were 16 stocks advancing against 14 declines on the index.

The overall market breadth has made a negative start with 33.40% stocks advancing against 60.51% declines. The broader indices were bleeding badly; the BSE Mid cap and Small cap indices declined 0.56% and 0.31% respectively.

The few gaining sectoral indices on the BSE were, IT up by 0.84%, TECk up by 0.55%, Auto up by 0.22% and FMCG was up by 0.09%. While, CG down by 1.39%, CD down by 0.81%, Bankex down by 0.64%, PSU down by 0.62% and Power down by 0.52% were the top losers on the index.

The top gainers on the Sensex were Tata Power up by 1.07%, M&M up by 0.99%, Bajaj Auto up by 0.96%, TCS up by 0.94% and Hindalco was up by 0.85%.

On the flip side, BHEL was down by 1.88%, L&T was down by 1.82%, ICICI Bank was down by 1.41%, Tata Steel was down by 0.97% and Jaiprakash Associates was down by 0.66% were the top losers on the Sensex.

Meanwhile, the telecom ministry is expected to act against telecom service providers who have entered into roaming agreements for 3G services, as the agreements violate license terms and conditions.

'The broad view that is emerging is that it is impermissible, ' said Telecom Secretary R Chandrashekhar whilst commenting that the concerned ministry had received the views of the law ministry among others on the issue. Chandrashekhar also stated that the ministry will soon take action however, declined any further details. The Department of Telecom (DoT) had asked a legal opinion on this matter and the law ministry had also supported the DoT’s view.

The matter is related to the agreement between major service providers, which includes Bharti Airtel, Vodafone Essar and Idea Cellular, for giving a 3G roaming network on a pan-India basis. Other service providers such as Tata Teleservices and Aircel, also had entered into a similar agreement to offer service in the six circles.

In an internal note, the DoT had said the roaming agreement among telecom companies for 3G services would to a significant loss of revenue for the government. There may also be an impact on revenue from spectrum usage charges collected from operators.

Prime Minister Manmohan Singh’s was asked to intervene by the chiefs of three leading telecom companies i.e. Bharti, Idea and Vodafone, failing which they said they would surrender spectrum. PM had assured them that government will look into their concerns and formulate forward-looking policies to sustain growth in the telecom sector.

The S&P CNX Nifty opened at 4,733.60; about 31 points lower compared to its previous closing of 4,764.60, and has touched a high and a low of 4,767.30 and 4,728.50 respectively.

The index is currently trading at 4,759.00, down by 5.60 points or 0.12%. There were 21 stocks advancing against 29 declines on the index.

The top gainers of the Nifty were Tata Power up by 1.75%, HCL Tech up by 1.43%, Hindalco up by 1.25%, Dr Reddy up by 1.13% and M&M up by 1.11%.

On the flip side, BHELdown by 2.13%, L&T down by 1.81%, Ranbaxy down by 1.43%, ICICI Bank down by 1.42% and PNB down by 1.28%, were the major losers on the index.

Asian equity indices were trading on dismal note; Shanghai Composite was down 30.40 points or 1.33% to 2,261.15, Hang Seng was down 162.14 points or 0.87% to 18,413.52, Jakarta Composite was down 44.32 points or 1.17% to 3,747.83, Nikkei 225 was down 86.53 points or 1.00% to 8,567.29, Straits Times was down 14.24 points or 0.53% to 2,687.48, Seoul Composite was down 26.22 points or 1.38% to 1,873.54 and Taiwan Weighted was down by 78.16 points or 1.12% to 6,870.88.