MARKETS STRUGGELING

Domestic equity indices after tumbling substantially in opening trade have calmed down and are now witnessing some arrested selling pressure at the brink of breaching the crucial level. The 30 share index--Sensex--tumbled over 300 points in opening trade as panicky fund managers and retail investors resorted to selling for the fourth consecutive session prompted by weak global cues of unrest in Egypt. Asian stocks too were trading lower following sharp losses registered in the US market due to concerns over the protests in Egypt. However, the US future indices were trading in green today. Back home, though the barometer indices are still trading substantially lower but some lost ground has been recovered on the back of some buying interest garnered by a few front line stocks at lower levels. Besides a number of large cap stocks, scores of midcap and smallcap stocks are also languishing in the red with sharp losses as mounting concerns about a possible slowdown in global economic growth, fears of another round of rate hike by the apex bank to tame inflation and a likely fall in earnings of top notch companies in the last quarter of fiscal 2011, all contributing to the sell-off in equal measure. The overall market breadth on BSE remains weak, in the favour of declines which have outperformed advances in the ratio of 1789: 690, while, 80 shares remained unchanged.

The BSE Sensex is currently trading at 18,118.07, down by 277.90 points or 1.51%.There were 4 stocks advancing against 26 declines on the index.

The broader indices too were bleeding; the BSE Mid cap and Small cap indices lost by 1.71% and 1.86% respectively.

All sectoral indices on the BSE were trading down; TECk down by 2.45%, Realty down by 2.43%, IT down by 2.41%, Metal down by 2.03% and Auto down by 1.83% were the major losers on the index, while, CG up by 0.58%, Oil & Gas up by 0.47% and Power up by 0.09% were the gaining sectoral indices.

The stock that gained momentum on the 30 share index--Sensex--were ONGC up by 3.02%, RIL up by 0.42%, M&M up by 0.22%, HUL up by 0.09% and BHEL up by 0.08%.

The stocks that tumbled the most on the index included TCS down by 4.36%, Bharti Airtel down by 3.97%, HDFC down by 3.78%, Sterlite Industries down by 3.02% and Bajaj Auto down by 2.98%.

Meanwhile, the government on Saturday announced a major step towards changing the policy regime of scam hit telecom industry when it declared that in future, telecom spectrum, the radio waves required to provide all kinds of voice and data services by operators, would be provided at some market based prices and not through first come first serve policy of subscriber based policy hitherto applicable.

"It is necessary to ensure a level-playing field for all players. Going forward, any new policy on pricing would need to be applied equally to all players," said the Minister of communications and IT Kapil Sibal, ruling out first-cum-first-serve basis. "In future, the spectrum will not be bundled with licence. In the event, the licence holder would like to offer wireless services, it will have to obtain spectrum through a market driven process," he said at a press conference.

What the new policy would mean is that the old operators like Bharti Airtel, Vodafone Essar and Idea etc will have to pay for spectrum over and above 6.2 MHz in each circle and new operators like Etisalat DB, Uninor, RCOM and Tata Teleservices will have to pay for spectrum held over and above the threshold of 4.4 MHz. The pricing will be determined through some kind of market mechanism not decided upon yet.

The idea is nothing new, though for the first time it reflects recognition on part of the government to bring more transparency in the telecom industry. Last year, the telecom regulatory authority of India (TRAI) had also floated the proposal for delinking the 2G spectrum from the license and making telecos get the spectrum at market prices. The proposal was to link the 2G prices with that discovered in the 3G radio wave rates and included levying one-time charge on operators (incumbent ones) holding excess 2G spectrum beyond 6.2 MHz.

The Department of Telecommunications (DoT) is also showing a lot of enthusiasm now to meet targets in the 100 days agenda set by Telecom Minister Kapil Sibal. It is already understood to be almost ready with the draft of the new National Telecom Policy and expects to send the same for the Cabinet approval in the first week of February. Once the Cabinet Committee on Economic Affairs (CCEA) approves the same, telecom ministry hopes to implement the policy by start of the new fiscal. Some announcement in this connection might also be made in the Budget for FY12.  

The S&P CNX Nifty is currently trading at 5451.30, down by 60.85 points or 1.10%. There were just 10 stocks advancing against 40 declines on the index.

The top gainers of the Nifty were Siemens up by 15.11%, ONGC up by 3.48%, GAIL up by 3.42%, Dr Reddy up by 2.35% and RIL up by 4.70%.

The top losers of the index were TCS down by 4.11%, Bharti Airtel down by 3.77%, BPCL down by 3.71%, HDFC down by 3.59% and Bajaj Auto down by 3.57%.

All the Asian markets barring Shanghai Composite were trading in the red; Hang Seng was down by 1.12%, Jakarta Composite plunged 2.40%, KLSE Composite dropped 0.32%, Nikkei 225 lost 0.41%, Straits Times tumbled 1.27% and Seoul Composite declined by 1.21%.

 

On the flip side, Shanghai Composite was up by 1% was the sole gainer in the Asian pack.