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Telecom stocks bounce back on buzz spectrum auction enters final phase

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Last Updated : Mar 10 2015 | 3:01 PM IST

After languishing in positive zone in early afternoon trade, key benchmark indices reversed direction in afternoon trade. The decline in the 50-unit CNX Nifty in percentage terms was higher than the decline in the barometer index -- the S&P BSE Sensex. The Sensex was currently off 16.86 points or 0.06% at 28,827.92. The Nifty was off 21.50 points or 0.25% at 8,735.25. The market breadth indicating the overall health of the market was positive.

Telecom stocks staged a strong intraday rebound on buzz the auction of telecom spectrum has reached the final stage. FMCG major Hindustan Unilever (HUL) fell on profit booking. GAIL (India) extended recent losses.

Meanwhile, Minister of Parliamentary Affairs M.Venkaiah Naidu said in the Lok Sabha yesterday, 9 March 2015, that the government is willing to consider some further amendments to ensure minimum land acquisition based on the views and suggestion of the opposition parties.

Foreign portfolio investors (FPIs) bought shares worth a net Rs 838.30 crore yesterday, 9 March 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) sold shares worth a net Rs 35.31 crore yesterday, 9 March 2015, as per provisional data.

Earlier, a bout of volatility was witnessed as the Sensex hit its lowest level in almost two weeks and the 50-unit CNX Nifty hit 1-1/2-week low in morning trade.

In the foreign exchange market, the rupee edged lower against the dollar.

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Brent crude oil futures lower in volatile trade as investors awaited this week's energy agency reports for a fresh assessment of global oil supply and demand balances. Global crude oil prices have witnessed high volatility recently after a steep slide in prices during the second half of calendar year 2014. Deregulation of diesel price announced by the Indian government in October 2014 and a decline in global crude oil prices will help reduce the government's fuel subsidy burden and help contain its fiscal deficit. The slide in global crude oil prices will also help India in containing its current account deficit and fuel price inflation. However, a weakness in rupee against the dollar will restrict the benefit of falling global crude oil prices to that extent. A weak rupee raises the cost of imports. India imports 80% of its crude oil requirement.

In overseas markets, Asian stocks declined after the latest data showed China's factory prices extended their prolonged fall amid a slowing economy. US stocks closed higher yesterday, 9 March 2015, recovering from a sharp decline registered during the preceding trading session as investors took a more positive outlook on the strong February job report.

At 13:17 IST, the S&P BSE Sensex was down 16.86 points or 0.06% at 28,827.92. The index fell 96.49 points at the day's low of 28,748.29 in morning trade, its lowest level since 26 February 2015. The index jumped 104.33 points at the day's high of 28,949.11 in early trade.

The Nifty was down 21.50 points or 0.25% at 8,735.25. The index hit a low of 8,724.10 in intraday trade, its lowest level since 27 February 2015. The index hit a high of 8,778 in intraday trade.

The BSE Mid-Cap index was up 31.74 points or 0.29% at 10,932.98. The BSE Small-Cap index was up 68.41 points or 0.6% at 11,420.35. Both these indices outperformed the Sensex.

The market breadth indicating the overall health of the market was positive. On BSE, 1,359 shares rose and 1,244 shares fell. A total of 129 shares were unchanged.

Telecom stocks staged a strong intraday rebound on buzz the auction of telecom spectrum has reached the final stage.

Bharti Airtel was up 10% at Rs 377.90. The stock hit a high of Rs 379.70 and a low of Rs 341.50 so far during the day.

Idea Cellular was up 8.18% at Rs 161.35. The stock hit a high of Rs 161.60 and a low of Rs 145.40 so far during the day.

Tata Teleservices (Maharashtra) was up 5.39% at Rs 8.99. The stock hit a high of Rs 9.24 and a low of Rs 8.40 so far during the day.

Reliance Communications was up 5.25% at Rs 66.20. The stock hit a high of Rs 66.95 and a low of Rs 61.70 so far during the day.

At the end of day five of telecom spectrum auction yesterday, 9 March 2015, a value of approximately Rs 94000 crore was committed by bidders in respect of provisionally won spectrum, according to a statement from the Ministry of Communications & Information Technology issued late yesterday, 9 March 2015. There is still spectrum, which is yet to be sold, the ministry said. The bidding will recommence on Tuesday, 10 March 2015, the ministry said.

FMCG major Hindustan Unilever (HUL) fell 2.37% to Rs 951.25 on profit booking. The stock had jumped 6.34% in the preceding two trading sessions to settle at Rs 974.30 yesterday, 9 March 2015, from a recent low of Rs 916.20 on 4 March 2015.

Tech Mahindra was up 0.85%. The company during trading hours today, 10 March 2015, announced the opening of the first Center of Excellence (CoE) for Google tools at Tech Mahindra's Global Solutions Center in Malaysia. The CoE aims to be the hub for innovation within the region and to focus on nurturing and building solutions with the best combination of products and technologies, Tech Mahindra said in a statement.

GAIL (India) extended recent losses. The stock was off 1.52% at Rs 379.90. The company last week announced that the Ministry of Petroleum & Natural Gas, Government of India vide letter dated 3 March 2015, informed the company that under recovery burden on GAIL (India) for the financial year 2014-15 is provisionally fixed at Rs 1000 crore. GAIL has been exempted from sharing of under recovery of oil marketing companies (OMCs) for the third and fourth quarter of 2014-15. For the financial year 2015-16, the share of GAIL towards under recovery of OMCs would be reviewed again based on its sales realization, cost of production and under recovery of OMCs on quarterly basis.

In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 62.625, compared with its close of 62.55 during the previous trading session yesterday, 9 March 2015.

Brent crude oil futures lower in volatile trade as investors awaited this week's energy agency reports for a fresh assessment of global oil supply and demand balances. Brent for April settlement was down 23 cents at $58.30 a barrel. The contract had declined $1.20 a barrel or 2% to settle at $58.53 a barrel during the previous trading session.

Meanwhile, Minister of Parliamentary Affairs M.Venkaiah Naidu said in the Lok Sabha yesterday, 9 March 2015, that the government is willing to consider some further amendments to ensure minimum land acquisition based on the views and suggestion of the opposition parties. He said so while intervening in the debate on the proposed Right to Fair Remuneration and Transparency in Rehabilitation and Resettlement (Amendment) Bill, 2015 in the Lok Sabha. Naidu said that the government could consider deleting social infrastructure projects from the exempted categories, states coming out with land banks of vacant lands for acquisition for development projects, hassle free mechanism for redressal of grievances of land losers, mandatory employment for losers of livelihoods on account of land acquisition etc. He said that the Minister of Rural Development Birendra Chowdhary, who is a farmer himself, would come forward with official amendments in this regard.

Naidu asserted that the government's decision to issue an Ordinance on land acquisition was not unilateral one but was based on the suggestions and views of all the states, reflecting their collective yearning for an enabling legislation that will not stifle development. Naidu said that without compromising on the remuneration of four times the market value to be paid to land owners against acquisition of their land, the government has proposed some amendments to the Land Act of 2013 to facilitate development by adding only five more categories like defence and national security, infrastructure including rural infrastructure, housing for the poor and affordable housing, industrial corridors including PPP projects where the land ownership will be with the government to be exempted from the provisions of the Act of 2013. He further said that 13 more categories have been brought under the purview of the new Bill which would immensely benefit the farmers.

Reacting to the suggestion of Mallikharjuna Kharge of the Congress to refer the Bill to the Standing Committee, Naidu said that so much time is not available since the Land Ordinance lapses by 5 April 2015 and the Ordinance is to be replaced by an Act of Parliament by 20 March 2015 when the Parliament will be adjourned for a month.

On the macro front, the government will unveil industrial production data for January 2015 on Thursday, 12 March 2015. The government will release the combined consumer price index (CPI) data (rural/urban) for February 2015 on the same day.

In overseas markets, Asian stocks declined today, 10 March 2015, after the latest data showed China's factory prices extended their prolonged fall amid a slowing economy. Key indices in China, Hong Kong, South Korea, Japan and Taiwan were off 0.28% to 0.89%. Key indices in Indonesia and Singapore were up 0.03% to 0.39%.

China's annual consumer inflation recovered in February, exceeding expectations, but producer prices continued to slide, underscoring deepening weakness in the economy and intensifying pressure on policymakers to find new ways to support growth. The consumer price index (CPI) rose 1.4% in February. The producer price index (PPI) declined 4.8% in February, the National Bureau of Statistics said today, 10 March 2015, extending factory deflation to nearly three years.

Trading in US index futures indicated that the Dow could fall 41 points at the opening bell today, 10 March 2015. US stocks closed higher yesterday, 9 March 2015, recovering from Friday's sharp decline as investors took a more positive outlook on the strong February jobs report.

In Europe, euro zone ministers warned Greece it had "no time to lose" and agreed technical talks between finance experts from Athens and its international creditors would start tomorrow, 11 March 2015, with the aim of unlocking further funding.

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First Published: Mar 10 2015 | 1:13 PM IST

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