PROFIT BOOKING CONTINUES

Indian frontline equity indices are trading near intraday low levels in the afternoon session as investors continue to book their profit after European counterparts opened on a subdued note with a cut of over two and a half percent while, most of the Asian indices were trading in the negative terrain at this point of time. Moreover the sentiments remained somber after the US jobs data on Friday showed employment growth stalled last month, sparking fears about the health of the world's largest economy. On the domestic front, monsoon has been good over the past couple of weeks. However, inflation remains stubbornly high, probably prompting the Reserve Bank of India (RBI) to go for at least one more hike on September 16. On the sectoral front, software, oil and gas and technology pivotals continued to see maximum unwinding of positions from traders. The broader indices, however, were trading flat while the market breadth on the BSE was negative; there were 1346 shares on the losing side against 1176 shares on the gaining side and 85 shares remain unchanged.
The BSE Sensex is currently trading at 16,610.03 down by 211.43 points or 1.26% after trading as high as 16,700.64 and as low as 16,580.97. There were 7 stocks advancing against 23 declines on the index.
The broader indices were trading mixed; the BSE Mid cap index gained 0.07% while Small cap lost 0.14%.
On the BSE sectoral space, Consumer Durables up 1.25%, Auto up 0.46% and Realty up by 0.27% were the only gainers while IT down 2.26%, Oil and Gas down 1.94%, TECk down 1.79%, Power down 0.91% and HC down 0.85% were the top losers on the index.
Hero Motocorp up 3.67%, Jindal Steel up 1.07%, Jaiprakash Associates up 0.97%, Bajaj Auto up 0.89%  and Tata Steel up 0.38% were the major gainers on the Sensex, while Infosys down by 2.77%, ONGC down 2.69%, Hindalco down 2.40%, RIL down 2.32% and HDFC down 2.20% were the major losers on the index.
Meanwhile, The Telecom Commission, country's apex policy making body in telecom sector, has asked the Department of Telecom (DoT) to make an exit policy for the mobile operators. This move of the Telecom Commission is expected to provide relief to several telecom companies battling dual threats of market viability and licenses cancellation following the 2G scam.
During 2003, Indian government has permitted telecom companies to migrate from limited mobility to full mobility. This move of the Telecom Commission is expected to have similar effect on the sector. This will be first exit policy and it will also set an example of future exit from any government concession agreement-based business. The outline of exit policy is not clear however, it will examine and deal with all loopholes, including labour laws. The exit policy may allow firms to sell out or surrender their licenses.

The likelihood of a government bailout for telecom sector, which has been in growing under various problems since 2008, is not surprising. The exit process is likely to be observed considering its wide implications on the competitive landscape, mergers and acquisition, investment into sector, bank loan and overall development in the telecom sector in India. On the exit policy, experts have the opinion that the new entrants will have loot at the exit option with great interest. The Loop Telecom, which is new player in sector, has already informed the Supreme Court of its desire to give up its license. On the exit policy, experts have the opinion that the new entrants will have look at the exit option with great interest. The Loop Telecom, which is new player in sector, has already informed the Supreme Court of its desire to give up license.

Incase the government decides to go ahead with the exit policy, the huge amount of spectrum will be returned to DoT. In this case, established telecom companies such as, Vodafone, Tata and Bharti, will be gainers as they are looking for additional spectrum to serve their increasing customer base. If spectrum becomes available in large quantity, then the demand-supply equation will reduce the price of spectrum even if it is allocated through transparent auction process. 
The S&P CNX Nifty is currently trading at 4,976.40, lower by 63.60 points or 1.26% after trading as high as 4,999.80 and as low as 4,970.10. There were 16 stocks advancing against 34 declines on the index.
The top gainers of the Nifty were Hindalco up 3.61%, RCom up by 2.72%, RCapital up 1.74%, Axis Bank up 1.17%, and SAIL up 1.10%.
Cairn down 3.97%, HCL Tech down 3.12%, Infosys down 2.94%, ONGC down 2.80% and Hindalco down 2.62% were the major losers on the index.
Most of the Asian counterparts were trading in the red; Shanghai Composite was down 43.31 points or 1.71% to 2,484.97, Hang Seng was down 538.91 points or 2.67% to 19,674.00, KLSE Composite was down 5.12 points or 0.35% to 1,468.97, Nikkei 225 was down 166.28 points or 1.86% to 8,784.46, Straits Times was down 82.22 points or 2.89% to 2,760.87, Seoul Composite was down 81.92 points or 4.39% to 1,785.83 and Taiwan Weighted was down by 205.49 points or 2.65% to 7,551.57.
On the flip side, Jakarta Composite remained the lone gainer surged 46.59 points or 1.21% to 3,888.32.