Markets trade firm; IT unable to recover

The Indian equity market seems stable at this hour of trade with strong buying mainly in oil & gas sector, with state-run oil companies among the big gainers after the government raised state-controlled fuel prices, giving them an earnings boost. The government increased diesel prices by about 9% late on Friday after months of delay. Government also scrapped customs duty on crude oil and petroleum products by 5%. It reduced excise duty on diesel by Rs 2.6/liter while additional excise duty has not been cut. Back on street all sectoral indices are trading in green except IT. Global cues are showing negative trend as Asian markets are trading in red as euro zone debt worries weighed on markets before a crucial parliamentary vote in Greece due this week and after a sharp fall in overseas banking shares. Back home, market breadth continues to remain strong; there were 1,518 shares on the gaining side against 915 shares on the losing side while 127 shares remained unchanged.

The BSE Sensex is currently trading at 18,393.67, up by 152.99 points or 0.84%. The index has touched a high and low of 18,432.67 and 18,132.70 respectively. There were 24 stocks advancing against just 5 declines on the index and one remained unchanged.

The broader indices are following the benchmark; the BSE Mid cap and Small cap indices were up by 0.76% and 0.85% respectively.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.92%, Auto up by 1.81%, PSU up by 1.77%, Metal up by 1.22% and Power up by 0.95%, while IT down by 0.28% was the lone loser.

The top gainer on the Sensex were ONGC up by 4.93%, M&M up by 3.69%, Bajaj Auto up by 3.57%, HDFC up by 1.96% and Tata Steel up by 1.74%.

On the other hand, ITC down by 0.77%, Hero Honda down by 0.68%, R Infra down by 0.59%, HUL down by 0.54% and Wipro down by 0.47% were the only losers on the Sensex.

Meanwhile,the Ministry of Telecom is mulling significant policy changes in the telecom sector on the recommendations made by the Telecom Regulatory Authority of India (TRAI). The Ministry is likely to propose policy changes on pricing of excess spectrum and delinking of spectrum from license, these expected changes in policy will be sent to Cabinet for final decision.

The Telecom Commission, the highest decision making body of the Department of Telecommunications (DoT), was expected to meet next month to consider the recommendations of the Telecom Regulatory Authority of India (TRAI) on spectrum management and other licensing issues. However, after the deliberations in the Telecom Commission on all the issues, the main policy changes would be referred to the Cabinet for a final decision.

The telecom commission has members from the various ministries and governmental bodies related to the sector. "The major proposed policy changes such as revising the structure of the unified access service licence and delinking of spectrum from licence and pricing of excess spectrum will be taken to the Cabinet since these decisions were earlier taken by the Cabinet under the aegis of the National Telecom Policy, 1999. Any change in the letter and spirit of this policy on licence and spectrum issues has to be subjected to the scrutiny of the Cabinet and Parliament," the department said in a note for Telecom Commission.

The DoT has acknowledged in principle a majority of the suggestions of TRAI, including a one-time fee on operation for holding spectrum beyond contractual limits and mergers and acquisitions rules, under which a combined entity after merger will have a total market share of 30 % and not more than 14.4/10 MHz of spectrum.

The suggestions made by Telecom Regulatory Authority of India have became important inthe wake of increasing need for consolidation in the telecom industry, which has been observing low tariffs and reducing revenues due to increased players in the sector. After the entry of new plays in the telecom sector in late 2008, the average revenue per user with the profits of the operators has started falling due to low tariffs. If Department of Telecom, accepts the suggestions of TRAI on pricing spectrum will increase exchequer's revenue realization.

The S&P CNX Nifty is currently trading at 5,518.00, up by 46.75 points or 0.85%. The index has touched a high and low of 5,532.45 and 5,434.25 respectively. There were 41 stocks advancing against 9 declines on the index.

The top gainers of the Nifty were BPCL up by 5.01%, ONGC up by 4.88%, M&M up by 3.76%, Bajaj Auto was up by 3.39% and Power Grid was up by 3.14%.

On the other hand, R Infra down by 1.31%, HCL Tech down by 0.97%, ITC down by 0.95%, Wipro down by 0.70% and Hero Honda down by 0.64% were the top losers.

All the Asian markets barring Shanghai Composite are trading in the red; Hang Seng was down by 0.70%, Jakarta Composite was down by 0.72%, KLSE Composite was down by 0.07%, Nikkei 225 was lower by 0.97%, Straits Times was down by 0.66%, Seoul Composite has plunged by 0.91% and Taiwan Weighted was down by 0.38%.

On the other hand, Shanghai Composite was trading higher by 0.32%.

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