Markets made a gap-down start; Sensex breaches 18,900 level

The Indian equity markets have made a gap-down start and are trading in red tracking weak global indices. The US markets suffered sharp cut overnight, though the earnings report were mixed but the traders took note of profit decline by Goldman Sachs amid report of lower than expected housing starts data, while all the Asian equity indices were trading in the negative terrain at this point of time, indicating somber investors' sentiments. Back home, selling pressure was witnessed in the key heavyweight and broader indices in the early which led the BSE's Sensex below its crucial 18,900 level as investors remained cautious over inflation worries after Finance Minister Pranab Mukherjee announced that high food inflation is being driven by supply bottlenecks and rising incomes. On the sectoral front, healthcare and software were the top gainers in trade; on the other hand oil and gas, banking and auto were the major losers on the BSE sectoral space. The broader indices too were feeling some selling pressure. However, C Mahendra Exports, the new listing got a good response from the investors and trading with a gain of over four and a half percent. The market breadth on the BSE was negative; there were 683 shares on the gaining side against 1,032 shares on the losing side while 69 shares remained unchanged.

The BSE Sensex opened at 18,892.43; about 86 points lower compared to its previous closing of 18,978.32, and has touched a low of 18,824.22 while high remained its opening. The index is currently trading at 18,872.72, down by 105.32 points or 105.60%. There were 8 stocks advancing against 22 declines on the index.

The overall market breadth has made a positive start with 38.28% stocks advancing against 57.85% declines. The broader indices too were feeling some selling pressure; the BSE Mid cap and Small cap indices were down by 0.17% and 0.25% respectively.

The top gaining sectoral indices on the BSE were, HC up by 0.12% and IT up by 0.02%. While, Oil and Gas down by 1.07%, Bankex down by 0.85%, Auto down by 0.73%, Metal down by 0.73% and FMCG down by 0.63%, were the major losers on the index.

The top gainers on the Sensex were Hero Honda up by 0.71%, L&T up by 0.67%, Wipro up by 0.61%, TCS up by 0.46% and M&M was up by 0.39%.

Tata Motors down by 2.31%, Sterlite Industries down by 2.03%, Maruti Suzuki down by 1.75%, SBI down by 1.34% and RCom down by 1.30% were the top losers on the index.

Meanwhile, the Telecom Regulatory Authority of India (TRAI) said on Tuesday that it will come up shortly with the new proposals on pricing of excess second generation (2G) mobile spectrum held by incumbent operators in various circles. Chairman of the regulatory body J S Sarma said that TRAI will make an announcement "in the next few days" on the issue of 2G pricing. The regulator would also be coming out with a consultation paper on 4G towards the middle of the year.

TRAI's original recommendation on 2G pricing issued in May last year had maintained that operators should pay a one-off fee for holding more than 6.2MHz of 2G spectrum. The prices for such spectrum were recommended to be computed from the prices discovered in the 3G auction which was severely contended by telecom players. Along with some other recommendations on the 2G spectrum, the TRAI report issuing these was dubbed biased and regressive by some of the biggest telecom players in the country and no final call on the matter has yet been taken. 

It is not yet clear if the regulator will put forward a similar approach this time around. When asked by media persons if the 2G pricing will be linked to that of 3G in the new proposals as well, Sarma said "I do not know", indicating some new thinking was perhaps going on in the regulator to take the telecom players on board. Perhaps TRAI may look to choose a price which in middle of original prices paid by telcos and the price discovered in 3G.

This seems to be a significant diversion from TRAI's earlier stand where it stated that the price for spectrum in the 900 MHz band be fixed at 1.5 times the price for the 1800 MHz band. "In the section related to spectrum pricing, we clearly stated that the 2001 price did not hold good in 2010, that price needs to be revised. However, we feel that pending further deliberations, the government may adopt that (earlier) price," said Sarma, explaining the need for revised recommendations.

Sarma, who was addressing an Assocham meeting on mobile value added services (MVAS), also stated that the regulatory body would be releasing a consultation paper on 4G towards the middle of the year. The 4G would provide for much close integration of telecom networks and much faster data speeds than what is possible with the 3G. India has been late in adapting to the 3G but hopes to catch up with the rest of the world by reducing the time in moving from 3G to 4G. The S&P CNX Nifty opened at 5,656.00; about 36 points lower compared to its previous closing of 5,691.05, and has touched a high and a low of 5,663.25 and 5,644.40 respectively. The index is currently trading at 5,656.95, down by 34.10 points or 0.60%. There were 14 stocks advancing against 35 declines while one stock remained unchanged on the index.

The top gainers of the Nifty were Kotak Bank up by 1.02%, L&T up by 0.70%, Hero Honda up by 0.66%, TCS up by 0.54% and Wipro up by 0.45%.

The top losers of the index were Tata Motors down by 2.24%, Sterlite Industries down by 2.17%, Maruti Suzuki down by 2.17%, GAIL down by 2.09% and HCL Technologies was down by 1.91%.

All the Asian markets were trading in the red; Shanghai Composite was down 36.31 points or 1.32% to 2,721.79, Hang Seng was down 321.81 points or 1.32% to 24,097.81, Jakarta Composite was down 59.29 points or 1.69% to 3,457.98, Nikkei 225 was down 125.05 points or 1.18% to 10,432.05, Straits Times was down 24.36 points or 0.75% to 3,217.60, Seoul Composite was down 9.68 points or 0.46% to 2,106.01 and Taiwan Weighted was down by 24.82 points or 0.27% to 9,036.13.

Unit-8, 3rd Floor, First Mall, The Mall, Ludhiana-141001, Punjab (INDIA).

To unsubscribe or change subscriber options visit: http://www.aweber.com/z/r/?TJzsLEwstCyc7OysHMyctEa0HBysDAwsnA==