Sensex holding early gains; Nifty above 5,250 level

Indian equity markets holding early gains and consistently trading with over a percent gain, following Asian markets rally amid stronger-than-expected US jobs data. The 50-share NSE Nifty continued to hold the 5,200 level, while, BSE Sensex rallied 200 points. However, investors were still cautious on persistent worries about weak rainfalls during the monsoon season as well as uncertainty about policy reforms ahead of the start of the parliament session on August 8. In currency markets, Indian rupee strengthened to its highest level in a week against American currency, as dollar weakened against other regional currencies. On sectoral front, all were trading in green. On the global front, Asian markets were trading strong amid emerging optimism for European action on the debt crisis too improved the sentiment. Back home, the market breadth favoring positive trend; there were 1,614 shares on the gaining side against 803 shares on the losing side while 101 shares remained unchanged.

The BSE Sensex is currently trading at 17,419.05 up by 221.12 points or 1.29% after touching a high of 17,448.42 and a low of 17,313.05. There were 25 stocks advancing against 4 declines on the index, while one remained unchanged.

The broader indices were trading on a positive note; the BSE Mid cap index was up 1.08%, while Small cap index was up 1.26%.

The top gainers on the BSE sectoral space were, Oil & Gas up by 2.74%, Realty up by .70%, Auto up by 1.63%, Bankex up by 1.52% and Capital Goods up by 1.50%, while there was no loser on the index.

RIL up by 4.72%, Tata Motors up by 3.21%, Tata Steel up by 2.28%, GAIL up by 1.95% and L&T up by 1.94% were major gainers on the Sensex, while TCS down by 0.61%, Dr Reddys Lab down by 0.48%, Coal India down by 0.42% and Hindustan Unilever down by 0.14% were major losers on the index.

Meanwhile, the Empowered Group of Ministers (EGoM) on telecom headed by finance minister P Chidambaram will be meeting today to consider a revised timeline for the spectrum auctions, as the government may not be able to finish the sale process by August 31, as was directed by the Supreme Court.

The Department of Telecom (DoT) has told the panel of ministers last month that the information memorandum containing all details of the sale will only be released on August 27, making it impossible for the government to meet deadline, while going through a bidding process by August 31. After the conditions of DoT, the government is left with just three days to conduct the pre-bid conference, issue clarifications, invite applications for the sale process, check compliance and carry out the bidding process, making it almost impossible. During last auction in 2010, the period between release of the information and the completion of the 3G auctions was about four months.

So the panel will decide if the government should approach the apex court seeking an extension of the August 31 deadline. Meanwhile, all other issues have been resolved by the panel and the reserve price for auction of second-generation or 2G licenses has been reduced by almost a quarter from the recommended, at Rs 14,000 crore ($2.5 billion) or at about 7.4 times the 2008 price, for five units of airwaves in the 1800 MHz band for all of India's 22 telecoms zones, or around Rs 2,800 crore per MHz.

The Cabinet approved the recommendations of the panel of ministers on spectrum to keep the reserve price of the 800 MHz band (used by telcos on the CDMA platform) at 1.3 times that of the 1800 MHz band. It had also decided to continue with the existing annual airwave usage slab of between 3 and 8 percent of companies’ revenue, higher than a flat 3 percent rate suggested by the sector regulator.

The S&P CNX Nifty is currently trading at 5,283.90, up by 68.20 points or 1.31% after trading in a range of 5,291.35 and 5,260.85. There were 43 stocks advancing against 7 declines on the index.

The top gainers on the Nifty were Reliance up by 4.83%, JP Associates up by 3.27%, Tata Motors up by 3.26%, Reliance Infra up by 3.13% and SAIL up by 3.01%. While, BPCL down by 0.96%, Dr Reddy down by 0.62%, Asian Paints down by 0.49%, TCS down by 0.49% and Coal India down by 0.48% were top losers on the index.

All the Asian indices were trading in green; Kospi Composite Index up 2.01%, Jakarta Composite up by 0.59%, Hang Seng index up by 1.84%, Straits Times up by 0.96%, KLSE Composite up by 0.23%, Taiwan Weighted up by 0.95%, Nikkei 225 up 2.00%, Shanghai Composite was up by 0.74%.