Benchmarks trade firm; Nifty hovering around 5,600 mark

Indian equity indices continue to trade firm in a narrow range as investors showed unrelenting buying interests across the bourses. Market participants were seen piling up the positions in FMCG, Metal and Power while, selling was witnessed among Oil & Gas and PSU counters. Despite the recent indication of slowdown in economic expansion because of inflation and increased interest rates by  the Reserve Bank of India to curb inflation, Indian economy is expected to grow by 9 to 9.5% in the next five year plan. The Planning commission Deputy Chairman Montek Singh Ahluwalia said India is in a strong position to achieve 9-9.5 percent growth during the 12th Five-Year Plan (2012-17). On the global front Asian markets were trading in green barring Shanghai Composite and Hang Seng, the European markets too are trading in green on an optimistic note. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 5,500 and 18,600 levels, respectively. The market breadth on the BSE was in favor of advances in the ratio of 1764:988 while, 108 scrips remained unchanged.

Moreover, the Empowered Group of Ministers (EGoM) on food yesterday decided to permit the export of five lakh tonne of sugar as the country's production is estimated to outstrip demand after a gap of two years. After the report sugar stocks were seen rallying on the bourses with Shree Renuka Sugar, EID Parry, Bajaj Hindustan, Balrampur Chini, Triveni, Rana Sugars up by 7.51%, 6.77%, 4.12%, 3.77%, 3.58% and 8.14% respectively. According to the Coffee Board's post-monsoon forecast, India's coffee production is likely to remain steady at 3 lakh tonnes in the 2011-12 season starting October this year. Tata Coffee was up 4.99% at 861.00. Shriram Transport Finance Company was up more than 1.5%. The company's secured non convertible debenture (NCD) issue will close today with effect from the close of banking hours. The NCD issue, which opened for subscription on 27 June 2011, was originally supposed to close on 9 July 2011. The NCD issue was worth Rs 500 crore with an option to accept oversubscription to the extent of Rs 500 crore. Also, Supreme Court directed West Bengal government not to return the lands to the farmers till further orders from the Calcutta High Court. Tata Motors on Tuesday had approached the Supreme Court challenging the Calcutta High Court order refusing its plea to restrain West Bengal government from distributing land to farmers in Singur.

The BSE Sensex is currently trading at 18,659.09 up by 166.64 points or 0.90% after trading as high as 18,703.05 and as low as 18,552.19. There were 24 stocks advancing against 6 declines on the index.

The broader indices were trading on a positive note; the BSE Mid cap and Small cap indices advanced by 0.67% and 0.83% respectively. 

On the BSE sectoral space, FMCG up 2.53%, Metal up 1.26%, Power up 0.86%, Consumer Durables up 0.86% and Bankex up 0.74% were the major gainers, while Oil & Gas down 0.17% and PSU down 0.09% were the only losers on the index.

The top gainers on the Sensex were HUL up by 2.66%, ITC up by 2.66%, Sterlite up by 2.61%, Tata Motors up 2.21% and BHEL up 1.97%. On the flip side, ONGC down by 2.41%, JP Associates down by 1.59%, Bajaj Auto down 1.32%, DLF down 0.31% and RCom down by 0.26% were the top losers on the index.

Meanwhile, the government is likely to give permission for the sharing of spectrum by two or more service providers in the New Telecom Policy 2011, this decision will help to improve the quality of services accrued because of huge spectrum shortage. The official involved in framing the New Telecom Policy 2011, said, the government is likely to allow sharing of radio-waves by two or more service providers. However, ruled out trading in the 2G spectrum as it was never auctioned.

As per the internal department of telecom communication, 'Even, TRAI (Telecom Regulatory Authority of India) had recommended spectrum sharing. Spectrum trading was not recommended due to the fact that 2G spectrum price was not determined by the market as it was bundled with the license and further allocation was made based on the subscriber base.'

The radio-waves sharing will help to improve the quality and reduce the shortage in the telecom sector as it will enable mobile service providers to lease their surplus spectrums to other mobile service providers on commercial terms. Many service providers were not able to acquire sufficient subscribers so as to utilize the spectrum allotted to them, especially by the new operators.

Telecom Minister Kapil Sibal has announced that the government will bring the New Telecom Policy by the end of this year to address various problems faced by the telecom sector. As per the note, the stakeholders have proposed adequate funding mechanism for the service providers, sharing of active infrastructure for better efficiency and easier mergers and acquisitions. On the issues of spectrum, the stakeholders are of the opinion that the spectrum should be allotted on the bases of technology neutrality, service flexibility, timely allocation and reconciliation and enhance transparency. 

Last year in May, the TRAI released the recommendation, under the 'Spectrum Management and Licensing Framework', to review the spectrum requirement of the operators as per the circle and to decide the pricing and allocation of 2G spectrums for optimizing the spectral efficiency of the telecom industry.

Considering the large number of service providers in each service area, and the position relating to the availability of spectrum, TRAI had given recommendations on mergers and acquisitions, sharing of radio-waves and trading. The TRAI has suggested that the radio waves sharing should be allowed between the two mobile operators given that each of them does not have more than 4.4 MHz/2.5 MHz of spectrums (GSM/CDMA). Leasing of spectrum should not be permitted, it had added. TRAI has also recommended against the radio waves trading in the Indian market as the 2G spectrum has been either given along with license or given based on the Subscriber Linked Criteria, without any additional charges of the spectrum.

The S&P CNX Nifty is currently trading at 5,590.45, higher by 45.15 points or 0.81% after trading as high as 5,604.65 and as low as 5,566.50. There were 34 stocks advancing against 15 declines on the index.

The top gainers of the Nifty were IDFC up by 3.72%, Sterlite up by 2.89%, ITC up by 2.71%, HUL up by 2.69% and Ranbaxy up by 2.42%. On the flip side, ONGC down by 2.56%, BPCL down by 2.00%, R Power down by 1.52%, JP Associates down by 1.52% and Axis Bank down 0.98% were the major losers on the index.

Asian markets are exhibiting positive trends as KLSE Composite rose 0.32%, Nikkei 225 climbed 1.54%, Straits Times increased 1.01%, Seoul Composite soared 1.53% and Taiwan Weighted jumped 1.11%. On the flipside, Shanghai Composite slipped 1.11% and Hang Seng declined 0.01%.

Stock markets in Indonesia remained closed on account of a public holiday.

The European markets were trading in green with, France's CAC 40 added 1.05%, Germany's DAX advance 1.19% and London's FTSE rose 1.07%.

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