Post session - Quick review

Indian equity markets managed to sneak out gains for second straight session, as investors went on shopping spree on optimism that government will accelerate the pace of economic reforms after the Presidential poll, where in the win of UPA’s presidential candidate Pranab Mukherjee’s looked imminent. The range bound, high volume session of trade, although did not witness spectacular gains, but decent enough to sustain the up-trend of the Indian equity markets. 30 scrip sensitive index Sensex, of BSE , managed to accumulate  over century of points to shut shop above the 17250 crucial level, while the widely followed 50 share index of NSE- Nifty, despite managing to accumulate around half a percent, failed to reclaim the 5250 level, which emerged as strong resistance level. The broader indices, too witnessed gains in smaller proportion in comparison to frontline indices.

Positive global cues and surge of the Index heavyweight, Reliance Industries ahead of its Q1 results tomorrow, compensated for the slew of disappointing earnings reported by the Hero Motocorp, DR. Reddy’S Laboratories and Kotak Mahindra Bank. Drug maker Dr Reddy's Laboratories lost over a percent after its net profit rose less than expected by 27.8% year-on-year to Rs 336 crore in the first quarter of FY13. Meanwhile, private sector lender Kotak Mahindra Bank, too pummeled over two percent on NPA concerns despite reporting a better than expected Q1 earnings. Consolidated net profit of the bank rose by 6.5% year-on-year to Rs 443 crore in the first quarter of FY13, while its Consolidated gross non-performing assets (NPAs) increased at 1.34% during the quarter as against 1.31% in previous quarter.

However, the case was little different for two-wheeler giant Hero MotoCorp, which recouped substantial losses after reporting its Q1 earnings, although the stocks lost close to a percent on reporting lower than expected net profit of Rs 615 crore for the first quarter of FY13 ended June 30, 2012, but was able to post much in line EBITDA margin for the April-June quarter at 15%, leding to its recovery. Spirit of European markets, which hit an 11 week high level, also got the markets going. European markets were trading in rapture even in the light of Euro zone situation in background on upbeat earnings from companies like Electrolux. Meanwhile, strong corporate earnings as well as better-than expected housing data from US pushed Asian stocks higher on Thursday, with the Australian market enjoying its largest percentage gain in six months.

Back on the home turf, sector wise, Information Technology, Consumer Durable and Oil & Gas, on BSE, featured in the best list of performers. On the flip side, Auto and Fast Moving Consumer Goods counters emerged as the weak link in the trade. Even telecom stocks, like Idea Cellular, Tata Communication and Reliance Communication, took a hit in the range 1.5-2.5%, ahead of the deferred EGOM meet on the contentious spectrum pricing issue. High volume session of trade, managed to witness turnover of 1.80 lac crore, with the market breadth on the BSE ending largely positive in the favour of advances which piped declines in a ratio of 1494:1308 while 147 scrips remained unchanged. (Provisional)

The BSE Sensex gained 87.60 points or 0.51% and settled at 17,272.61. The index touched a high and a low of 17,318.93 and 17,244.76 respectively. 20 stocks were seen advancing against 10 declining ones on the index (Provisional)

The BSE Mid-cap index gained 0.14% while Small-cap index was up 0.39%. (Provisional)

On the BSE Sectoral front, IT up 1.62%, Consumer Durable up 1.32%, Oil & Gas up 1.21%, Power up 0.94% and Metal up 0.91% were the top gainers while, Auto down 0.39% was the sole loser.

The top gainers on the Sensex were Infosys up 2.81%, Sterlite Industries up 2.47%, BHEL up 2.29%, Tata Power up 2.13% and Bajaj Auto up 1.82% while, Maruti Suzuki down 8.93%, Bharti Airtel down 2.57%, SBI down 1.32%, Hero MotoCorp down 0.78% and Dr. Reddy’s Lab down 0.71% were the top losers in the index. (Provisional)

Meanwhile, the much awaited meet of the Empowered Group of Ministers (EGoM) on Telecom for the contentious issue of a reserve price for the re-auction of 2G spectrum, was yet again deferred to Friday. Crucial aspects like pricing of spectrum, one-time fee, roll-out obligations, terms of payment and the timeline for selecting the auctioneer, were expected to be taken on board for discussion on Tuesday, by the EGoM under the chairmanship of Union Home Minister P Chidambaram who was asked to lead the EGoM on spectrum auction after Agriculture Minister Sharad Pawar declined the job, apprehending controversy.

However, the ministerial panel, staying mum on rest of the issues, did manage to pencil down stricter roll-out obligations for successful bidders. Besides, the ministerial panel also mandated Department of Telecommunications (DoT) to sketch a fresh matrix on the impact of the reserve price chosen on government revenue and operators’ rates.

As per the new roll-out obligation, successful bidders will have to cover 10% of DHQs (district headquarters) by the third year, 20% of DHQs in the fourth year and 30% of DHQs by the fifth year. However, earlier the Telecom Regulatory Authority of India (Trai) had recommended the operators that win spectrum would have to cover 50% of villages, in three years, and 100% coverage of the country in four years.

With the industry crying foul, the Trai has proposed a near 10-fold rise in the auction’s starting price compared to what carriers paid in 2008. The regulator recommended 2G spectrum reserve price at Rs 3,622 crore per unit of spectrum in the 1800 MHz band, which translates to an amount of over Rs 18,000 crore for pan-India license, i.e. 13x of current base price of 2G and equivalent to 3G spectrum cost, where radio airwaves were vacated following the Supreme Court’s verdict on February 2 cancelling all the 122 spectrum licenses allotted in 2008 during the tenure of the former telecom minister A Raja.India VIX, a gauge for market’s short term expectation of volatility lost 6.07% at 16.38 from its previous close of 17.44 on Wednesday. (Provisional)

The S&P CNX Nifty gained 25.85 points or 0.50% to settle at 5,242.15. The index touched high and low of 5,257.75 and 5,233.15 respectively. 34 stocks advanced against 16 declining ones on the index. (Provisional)

The top gainers on the Nifty were Cairn India up 3.02%, BPCL up 2.99%, Infosys up 2.80%, IDFC up 2.56% and BHEL up 2.47%. On the other hand, Maruti Suzuki down 9.19%, Bank of Baroda down 3.05%, Kotak Bank down 2.96%, Bharti Airtel down 2.56% and SBI down 1.28% were the top losers. (Provisional)

The European markets were trading in green, with France's CAC 40 up 0.25%, Germany's DAX up 0.46% and Britain’s FTSE 100 up 0.21%.

Asian shares ended higher on Thursday as enhanced corporate profits from U.S. bellwethers relieved worries of a slowdown in earnings, mainly for the besieged tech sector. However Korea's KOSPI rebounded sharply from losses in the previous session nearly despite a fall in banking shares that were hit by news that local banks were being probed by authorities investigating how a key interest rate has been set. Meanwhile Japan's Nikkei erased some of its gains as investors were cautious that a firmer yen would pressure exporters such as car makers and electronics manufacturers. Shanghai shares ended higher for the third consecutive day, boosted by strength in China's two biggest insurers as bourse volume jumped to the second-highest since June 4.