PROFIT BOOKING

After exhibiting four continuous days of gains, key domestic benchmarks have made a sluggish start on Friday's morning trade on the back of profit booking amid weak global cues. Global markets were down on the back of disappointing US economic data and fears of French downgrade. While, most of the Asian counters too were witnessing choppy trade at this point of time. Back home, Sensex lost its crucial 17,500 mark in initial trade led by profit booking as the Sensex rallied more than 400 points in previous four sessions. Banking, metal and capital goods stocks remained under pressure while consumer durables, software and technology stocks were on buyers' radar. Meanwhile, Ambuja Cements and ACC lost 1.5-3 percent post quarterly earnings. Both the companies reported weak earnings on the back of one-time higher depreciation. Stocks of Aviation industry like, Kingfisher Airlines, Jet Air India and Spicejet rose as the finance ministry on Thursday announced policy changes for the airline industry, allowing them to raise additional low-cost capital through external commercial borrowings. ECBs will help cash-strapped private carriers, like Kingfisher Airlines and other companies to raise working capital from abroad. Moreover, Index heavyweight Reliance Industries (RIL), India's biggest company by market capitalisation, trading lower on likely to reporting a second consecutive quarter of lower profits in Q4. The broader indices were outperforming benchmarks. The market breadth on the BSE was positive; there were 817 shares on the gaining side against 759 shares on the losing side while 77 shares remained unchanged.

The BSE Sensex opened at 17,459.72; about 44 points lower compared to its previous closing of 17,503.71, and has touched a high and a low of 17,485.60 and 17,442.23 respectively.

The index is currently trading at 17,457.02, down by 46.69 points or 0.27%. There were 13 stocks advancing against 17 declines on the index.

The overall market breadth has made a positive start with 49.43% stocks advancing against 45.92% declines. The broader indices were outperforming benchmarks; the BSE Mid cap and Small cap indices rose 0.10% and 0.16% respectively.

The top gaining sectoral indices on the BSE were, CD up by 1.09%, IT up by 0.48%, TECk up by 0.41%, HC up by 0.15% and Auto up by 0.07%. While, Bankex down by 0.55%, Metal down by 0.51%, CG down by 0.42%, Realty down by 0.39% and Oil and Gas down by 0.38% were the top losers on the index.

The top gainers on the Sensex were M&M up by 1.24%, Cipla up by 0.91%, Maruti Suzuki up by 0.91%, Infosys up by 0.78% and Wipro up by 0.63%.

On the flip side, Coal India was down by 1.31%, RIL was down by 1.19%, Tata Motors was down by 1.17%, Tata Power was down by 1.12% and Hindalco was down by 0.98% were the top losers on the Sensex.

Meanwhile, Telecom Regulatory Authority of India (TRAI) reiterated that licence fee will continue to be non-refundable to mobile service providers if they lose or surrender permits, while adding that a separate exit policy was not required for mobile phone companies who wanted to quit the business. TRAI's commendations will facilitate the government to save about Rs 10,000 crore, which was paid by the 122 licences that were quashed by the Supreme Court in its February 2, 2012 orders.

The regulator's recommendations, if accepted, will also result in dismissal of requests from companies like Loop, S Tel and Telenor that had demanded repayment of their licence fee from the government. Unitech Wireless or Uninor, majority owned by Norway's Telenor, has sought a reimbursement of Rs 1,659 crore paid as licence fee to the government when it acquired mobile permits while Loop wants around Rs 3,800 crore back from licence fee and damages.

Many players are willing to exit the telecom space due to stiff competition and lower profits but are unable to do so. They want clear guidelines on mergers and acquisitions (M&As) and exit policy. But, last month, TRAI had said it was not in favour of an exit policy for telcos since the Supreme Court, on February 2, 2012, had already cancelled all 122 telecommunication licenses issued to various operators in India's 22 service areas under the 2G spectrum sale by the government in January 2008 allegedly at very low prices favoring some companies, and thereby causing a loss of Rs 1.76 trillion (as per Comptroller and Auditor General report) to the exchequer.

But prior to the SC's orders in February 2, the telecom department had asked the regulator to exercise an exit-policy to allow some operators that had not even started operations, and others who wanted to wind down to exit the sector, as it felt that this was a better option compared to canceling the licences, as recommended by TRAI. While the regulator's recommendations are not binding on the government, TRAI has restated its suggestions from the draft proposal last month, which advises the government to continue with its present rules that allow a Telco to give up permits by giving a notice of 60 days.

In a separate development, the telecoms secretary R Chandrasekhar said the government was awaiting regulations on spectrum auction by TRAI that would give clarity on the next set of steps to be taken. He added that telcos seeking fresh licences need not wait for the National Telecom Policy, slated to be out by June, and could get permits after guidelines for unified licences are finalised by DoT.

The S&P CNX Nifty opened at 5,313.95; about 19 points lower compared to its previous closing of 5,332.40, and has touched a high and a low of 5,327.50 and 5,310.55 respectively.

The index is currently trading at 5,314.30, down by 18.10 points or 0.34%. There were 16 stocks advancing against 34 declines on the index.

The top gainers of the Nifty were Ranbaxy up by 1.17%, M&M up by 1.09%, Cairn up by 0.87%, Cipla up by 0.69% and Infosys up by 0.67%.

On the flip side, ACC down by 2.96%, Ambuja Cement down by 1.67%, Coal India down by 1.47%, Reliance Infra down by 1.34% and Tata Power down by 1.16%, were the major losers on the index.

Most of the Asian equity indices were trading in the green; Hang Seng was down 50.87 points or 0.24% to 20,944.14, KLSE Composite was down 1.12 points or 0.07% to 1,595.50, Nikkei 225 was down 34.75 points or 0.36% to 9,553.63, Straits Times was down 6.21 points or 0.21% to 3,002.00, Seoul Composite was down 24.51 points or 1.23% to 1,975.35 and Taiwan Weighted was down by 57.99 points or 0.76% to 7,564.70.

On the flip side, Shanghai Composite was up 14.29 points or 0.60% to 2,392.92 and Jakarta Composite was up by 2.01 points or 0.05% to 4,165.72.